The Principle of Indemnity Would Prevent

question 137

Multiple Choice

The principle of indemnity would prevent:

• A)the act of one person from being imputed to another.
• B)an insured from collecting more than he lost.
• C)a negligent third party from being held liable for damages if the injured party was insured.
• D)a significant amount of loss control activity.
• E)an insurer from ever waiving it's right to subrogation.

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Definitions:

Activity Variance

The difference between the actual cost incurred for an activity and the standard cost set for that same activity.

Total Expenses

The sum of all costs and expenditures that a business incurs during a given period, including operating expenses, cost of goods sold, and other charges.

Variable Cost

Costs that vary directly with the level of production or sales volume, such as materials and labor.

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity, allowing better comparisons and analysis of performance.