Question

Vicky Volare fell in love with motor scooters on her vacation trip to Aruba. "They're a blast!" Vicky said. "They are convenient, safe, inexpensive, and fun to ride." Now she is planning to buy 30 Vespa Scooters to provide scooter rental in Vail, Colorado. Vicky will need four employees, in addition to her own services. She has completed a business plan, except for determining what types and amounts of insurance coverage she should have. As soon as she completes the insurance planning, she can complete the financial section of her business plan. Vicky will invest $50,000 of her own funds and is borrowing $230,000. $180,000 of the loan will be secured with the 30 scooters. The other $50,000 is a personal note to her from her bank. She hopes to start her business within 90 days, to catch the beginning of the summer.

a. What risks will vicky face because she is hiring four people?

Answer 1

Vicky Volare's primary risks while hiring four employees include employment liability for workplace issues, the need for workers' compensation insurance for job-related injuries, professional liability for employee errors, necessary property and casualty insurance to cover business assets, and disability insurance for long-term absences.

Step-by-step explanation:

Vicky Volare will face several risks associated with hiring four employees for her scooter rental business. These risks include employment liability, which encompasses potential lawsuits related to wrongful termination, discrimination, or work-related injuries. Additionally, Vicky must consider the cost of workers' compensation insurance, which is mandatory in most states and covers medical expenses and lost wages for employees injured on the job.

Professional liability insurance, also known as errors and omissions insurance, may be necessary if an employee's error or oversight leads to a customer's loss. Finally, Vicky should ensure that she has adequate property and casualty insurance to protect against damages to scooters and other business assets, as well as disability insurance for employees in case they are unable to work for an extended period due to illness or injury.