Question

1. Read the following scenario and answer the question in 5-10 sentences.

You are the CEO of a Fine Furnishings, Inc., a small business that manufactures and sells custom-made, high-quality traditional wood furniture for homes and offices. Highly skilled craftsmen hand-build the furniture using a special historically-accurate process familiar to only a very few furniture experts. You know that purchasing insurance would enable you to transfer various risks to the insurance company in exchange for the premium paid. There are various types of insurance, with some insurance classifications being more useful to a small business than others. Select at least three relevant types of insurance for Fine Furnishing, Inc. and explain the implications of having these insurance policies for your business.

Answer 1

You can enroll your business and employees with the following insurance viz.

Commercial property insurance, business interruption coverage, inland marine insurance, equipment breakdown insurance, Workers compensation insurance, etc.

Step-by-step explanation:

Let us understand why insurance is required in Furnishing manufacturing company.

• Has both valuable properties as well as flammable substances
• Employees use heavy machines and sharp tools

So both the employees as well as property is at risk. So we must enroll ourselves in insurance to manage the damages.

• Commercial property insurance: To protect the building and other materials inside it.
• Business interruption coverage: This supports us to pay when the work could not be proceeded due to damage caused.
• Inland marine insurance: This is used to recover from the loss incurred when the product is shipped.
• Workers compensation benefit: To support the workers when an injury happens or sudden loss of death which happened inside the company premises.