INSURANCE

Question 1
Jane Steel has a small shop in the rural town of Mavis Hill. She buys and sells a wide range of items. Some of these items are
imported by Jane Steel. In recent times there have been increased levels of crimes in the community, with several businesses
in the area being the target of robberies and arson.

(a) Distinguish between `insurance' and `assurance'. [2 marks]

(b) State THREE principles upon which insurance is based. [3 marks]
(c) Identify THREE types of insurance risks which businesses in Mavis Hill could insure against and state how businesses in
the community can benefit by insuring against those risks. [6 marks]

Question 2
Marva Save opened a new shop in the village of Caribeau.
List and discuss TWO ways in which insurance might encourage the development of business activities in the village of
Caribeau.
Joe Jon wants to take out insurance when he starts the business. However, his friend tells him that he does not have an
insurable risk in the business.
(i) Explain the term `insurable risks'. [2 marks]
(ii) Assuming Joe Jon is able to purchase insurance, identify TWO types of insurance that you would advise him to purchase.
[4 marks]
(iii) For each type of insurance identified above, discuss how it will help Joe in operating his business. [4 marks]

Question 3
Clairmont Fisheries Ltd. is a large Caribbean business with branches in five Caribbean countries. The company is in the
fishing business (canned mackerel. herrings, fish etc.) It employs one thousand (1000) persons and owns a fleet of fishing
trawlers.
(a) Identify FOUR types of insurance policies to which Clairmont Fisheries Ltd could subscribe to protect itself and its
employees.
(b) For EACH of the insurance policies identified above, explain the type of protection or coverage it offers. [8 marks]

Question 4
Dave recently opened a small appliance store. He sells radios, television sets, stoves and refrigerators. Dave was advised that
he should insure his business.
(a) List THREE principles upon which insurance is based. [3 marks]
(b) State how the principles identified above will apply to Dave's appliance store if he insures the business. [6 marks]