Essay Risk Management – Business Risks and Insurance – Management Assignment Help

Assignment Task:

Assessment overview This assessment assesses learning outcomes 2 and 3: 

• LO1: Evaluate the suitability of general insurance products, structures and options in terms of their benefits, risks, limitations, and potential non- insurance solutions. 

• LO2: Apply environmental, technical, procedural and risk management factors in a general insurance context. 

You are required to answer all tasks for Parts A, B and C. 

The topics covered in this assessment are: 

Part A – Domestic risks and insurance 

Task Topic 

Task 1 Moving house 

Task 2 Risk assessment 

Task 3 Recommending suitable general insurance products 

Task 4 Comparing the cover offered by different providers 

Task 5 Choosing a provider 

Task 6 Policy ownership 

Part B – Business risks and insurance 

Task Topic 

Task 1 Risk assessment 

Task 2 Recommending suitable general insurance products 

Task 3 Information required for underwriting 

Task 4 Policy ownership 

Part C – Application, policy review and claims 

Task Topic 

Task 1 Applying for insurance 

Task 2 Policy review 

Task 3 Claims 

Present each answer as if you were providing a written response to John and Anne. As such, each answer should be free of spelling and grammatical errors and be written in a way that the client will understand. 

For each task, we have provided a suggested word count. Note that the word count is for guidance only and you will not be penalised for being under or over the suggested word count, provided you fully address the task. 

You may use any sources you consider appropriate for completing this assessment. 

Case Study 

John and Anne West are a married couple in their 40s. They have three children; Roy, aged 18 Tom, who is 16 years of age, and William, who is 10. With the help of a recent inheritance, they have decided to move house to a better neighbourhood for the children. They are settling on the purchase in 10 days’ time. John and Anne have decided to keep their existing house, and rent it out for $520.00 per week. They have arranged finance with XYC Bank for both houses. They have decided to set up a trust for their rental property. Their solicitor friend, Peter Williams, is setting up the trust this week. The trust will be called JAW Trust, and the trustees will be John and Anne West and Peter Williams. 

John and Anne consider that they were lucky to find their home. It’s a 300 square metre, two-storey house built of brick and tile, with aluminium windows. It was built in 2000 and has extensive decks leading to the swimming pool and spa pool. It also has three-car garaging, which means John will be able to keep his beloved classic car (a 1954 Ford, worth $5,000) in storage there until he has time to work on it. They have landscaped gardens; a portion of the back of the property has retaining walls – about 15 metres. They used the Cordell calculator, and the sum insured worked out at $1.1 million. They estimate their contents to be worth $160,000. Anne has two diamond rings worth $1,500 and $4,000 respectively, and paintings she inherited from her mother – one is worth $5,000, and the total collection is worth $15,000. They are keen on sport and have three mountain bikes worth $7,000 each and some skiing equipment for the winter worth approximately $10,000. The house has an audible alarm. 

Part A: Domestic risks and insurance 

Task 1: Moving house Explain the advice you will give to John and Anne about insurance cover for the risks of moving their contents. 

Task 2: Risk management 

a. Excluding the risks associated with moving house, identify and evaluate the domestic property and liability risks that John and Anne face. 

You are required to: 

o complete a risk matrix (below): 

o justify your placings in the matrix. 

b. Identify one risk that could be retained. Give reasons for your answer. (50 words) 

Task 3: Recommending suitable domestic general insurance products Recommend, with justification, the six general insurance policies John and Anne need to cover the risks you identified in Task 2 (a). 

You are required to: 

• assume John and Anne decide not to retain the risk you identified in Task 2 (b) 

• state the six domestic general insurance policies that meet their needs 

• briefly describe what each policy covers 

• state the sum insured for each policy 

• explain the type of cover (for example; replacement, indemnity, comprehensive) you are recommending 

• explain any extensions, terms and conditions, limits, specified items or imposed terms that will apply (based on information provided in the case study). 

Task 4: Comparing the cover offered by different providers Select three of the policies you recommended in Task 3 – ensure that each one covers different risks. Choose two general insurance providers that offer these policies – ensure their products are underwritten by different insurers. Identify and explain the similarities and differences between the cover offered by the two providers in terms of the extensions, terms and conditions, limits, specified items or imposed terms you explained in Task 3. 

You are required to: 

• clearly state the name of each provider’s products and provide a URL link to the policy documents 

• for each of the three policies, identify and explain two similarities and/or differences in cover between each provider’s policies 

• select each of the following areas at least once across your range of products: 

o standard cover

o automatic benefits/extensions

o scope/flexibility of cover (as determined by the policy terms and conditions, limits or specified items)

o excesses. 

Task 5: Choosing a provider Recommend, with justification, which of the two providers’ products you discussed in Task 4 is the most suitable for John and Anne. You are required to: 

• justify your choice in terms of the features and benefits you discussed in Task 4 and at least two other relevant factors. 

Task 6: Policy ownership For each of the six policies you recommended in Task 3, recommend the most suitable policy ownership structure and accurately state how the policy owner and any interested parties will be shown on the policy schedule. 

Part B: Business risks and insurance 

Task 1: Risk management 

a. Identify and evaluate the business property and liability risks John faces. 

You are required to: 

o complete a risk matrix (below): 

o justify your placings in the matrix.  

b. Based on the information provided in the case study, evaluate, with justification, John’s business risk tolerance and business risk capacity. You are required to: 

o rate John’s business risk tolerance (for example; high, moderate, low)

o rate John’s business risk capacity (for example; high, moderate, low)

o give one example from the case study to support your assessment of John’s business risk tolerance o give one example from the case study to support your assessment of John’s business risk capacity. 

Task 2: Recommending suitable business general insurance products Recommend, with justification, the six business insurance policies John needs to cover the risks you identified in Task 1. 

You are required to: 

• state the six business general insurance policies that meet John’s needs 

• briefly describe what each policy covers 

Task 3: Required information for underwriting 

The underwriter requires a range of information about John’s business in order to assess the risk to the insurer. For each of the six policies you recommended in Task 2, identify and explain one piece of information you will need to collect from John for underwriting purposes. 

You are required to: 

• identify six different pieces of information 

• give reasons why the underwriter needs each piece of information 

• for each piece of information, explain the potential impact on the terms, conditions and price of cover. 

Task 4: Policy ownership For each of the six policies you recommended in Task 2, recommend the most suitable policy ownership structure and accurately state how the policy owner will be shown on the policy schedule. 

Part C: Application, policy review and claims 

Task 1: Applying for insurance 

a. Explain the process you would follow to obtain a quote and then ensure the required insurance is in place for John and Anne. 

b. Explain the purpose of the declaration and consent section of the application form. 

c. Explain why a certificate of currency may be required in this situation, and describe the information it provides. 

Task 2: Policy review Identify four changes in the West’s domestic circumstances and four changes in their business circumstances that would trigger a review, and determine the action to be taken in each case regarding their insurance cover. 

Task 3: Claims 

a. Nine months after taking out the policies you recommended, Anne calls you to advise that, on returning from a three-week holiday sailing in the Bay of Islands, they discovered that the floor in the bathroom is spongy under the tiles. Initial investigation confirms that a water pipe behind the vanity unit has been slowly dripping. Overtime it has caused the vanity cabinet to swell and the particle board to deteriorate. She seeks advice on the process for claiming on her policies. 

(i) Help Anne lodge her claim. 

You are required to: 

• Explain four key actions you would undertake to help Anne lodge her claim. 

(ii) Assess Anne’s claim. 

You are required to: 

• Identify and explain the type of damage that has occurred. 

• Discuss the circumstances in which, given the type of damage, her claim will be accepted and which costs will be covered. 

• Discuss the circumstances in which, given the type of damage, her claim will be declined. 

b. 18 months after taking out insurance, John’s office is broken into and equipment and stock is stolen along with a significant degree of malicious damage at his leased business premises. He lodges a claim with the insurer, who is a member of the Insurance Council of New Zealand. Because the circumstances are suspicious, the insurer appoints a loss adjuster. This delays assessing the claim and the insurer is unable to determine whether or not to accept the claim within 10 business days. 

The Open Polytechnic of New Zealand (i) Detail four activities that the loss adjuster may carry out in this situation. 

(ii) Explain the insurer’s obligations under the Fair Insurance Code regarding the delay in determining whether or not to accept the claim. 

(iii) Records show that John hadn’t ensured the security system was fully functional and operating at the time he closed the office. It transpires that the alarm hasn’t ever functioned properly since he moved into the premises. John acknowledges this oversight. He had been extremely busy and never got around to getting a technician in to fix it. Will this affect his claim? Support your decision with reference to the insured’s duty of disclosure, the Fair Insurance Code and the Insurance Law Reform Act 1977.