Observation

The question was avoided by almost of the candidates. The performance of those who attempted the question was very poor.

The expected responses to the question include:

i. Insurable risks;

ii. Uninsurable risks.

i. Insurable risks: These are risks with uncertainty of occurrence and as a result, they can be insured against. In case of loss, the level of loss can be predicted.

ii. Uninsurable risks: These are risks that cannot be insured against because the extent of damage cannot be estimated. Also, the chances of happening are high.

(b) Insurance policies that could be taken by Zenga Investment Company
i. Motor Vehicle Insurance (Comprehensive and Third Party Insurance): This is insurance that covers the vehicles, drivers and third parties who might sustain injuries during accidents.
ii. Employee Group Insurance/Employers’ Liability Insurance: These are third party insurance to cover staff in case injury or death in the course of business operations.
iii. Fidelity Guarantee Insurance: This insurance is meant to cover cashiers’ dishonesty or poor handling of cash.
iv. Property insurance: This is meant to cover the premises of the company against fire, burglary and injury to third parties.
v. Bad Debts/Credit Insurance: This is an insurance policy that protects and guarantees Zenga Investment Company against irrecoverable debts.
vi. Key person/Key man Insurance: This compensates the business for losses incurred with the loss of a key income generator to guarantee business continuity.

(c) Importance of taking up Insurance Policies by the Company
i. Uncertainty of business loss is reduced and the business will be compensated if losses occur.
ii. Business efficiency is increased. With insurance, staff will work better since they know that they will be compensated in the event of injury/death.
iii. It ensures that the business will not lose if it invests in staff to improve efficiency through Key man policy.
iv. Enhancement of credit opportunity/Collateral Security: Lenders will be ready and willing to lend if they know that the business has insurance that will compensate if unforeseen disasters occur.
v. The welfare of employees such as payment of medical bills and death benefits which the company might find big to handle could be passed on to insurance companies.
vi. Business continuity is guaranteed.