Essays on Insurance and Risk Planning, Techniques Available to Michael and Marry Case Study

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The paper 'Insurance and Risk Planning, Techniques Available to Michael and Marry " is a great example of a finance and accounting case study.   It is important to manage risk properly. This is because it is able to reduce the loss which the injured party is likely to pay in the case of a loss (Pear, 2012). In the case of Michael and Marry, it is essential to mitigate their risk by taking different insurance policies to ensure that there is a reduction in risk exposure. They are also required to take appropriate actions such as risk control and risk avoidance so that they can mitigate property, personal and liability loss. Part A 1.

Potential losses Property losses are losses which the company or a person gets as a result of risk. These losses may result from fire, accident, death and sickness (Barrett, 2012). These losses can be compensated when the person takes a policy against risks which causes such losses. These losses arise in the form of property losses, personal losses and liability losses. Property losses These are losses which arise from the damage of properties such as building, vehicle, plant and machinery. Physical Damage Michael and Marry can have property losses caused by the damage to their cars and family building.

These can result from perils like fire, windstorm and lightning. In the event of damage, the content of the house may also be lost as a result of the same event. The same accident may also cause loss of valuable materials like accounting records and other equipment which are within the premise. Loss of Use It is also possible for Michael and Marry to lose the use of their business for other reasons not damage to property (Pear, 2012).

The Government can close the business because of non-compliance of health and safety standards. It is also possible for the Government to close the business of Michael and Marry because of unsanitary condition. These are very common uninsurable losses which these couples can face. Criminal Activity Michael and Marry business can also be at risk for crimes. The assets of their business may be stolen by strangers. This may result in great loss of money which requires compensation by the insurance company. Personal losses It is also possible for Michael and Marry to get accidental death in a vehicle.

This will cause loss of life. This can happen to the couples or to their sons (Barrett, 2012). They can also suffer qualifying bodily harm from accident or sicknesses. Liability losses Since these couples are doing a partnership business. Each partner has an obligation to fulfill under the partnership agreement. It, therefore, makes each partner suffer a loss committed by the other partner and this makes all partners suffer a liability loss. 2. Evaluation of personal loss exposure In the case of disability under personal loss, the policy period will change.

Policy period in the case of disability will be within 25 years only but in the case of death, it will be from the date the policy is taken to the date the policyholder dies (Barrett, 2012). The premium paid by Michael for maintenance will not be used by beneficiaries when he is still alive but in the case of death, al the benefits go to beneficiaries. Disability insurance will only allow the insurance company to maintain Michael but when he dies there will be no compensation for death.


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Barrett, M. (2012). "Supreme Court Supports Obamacare, Bolsters Obama". BloombergBusinessweek

Hubbard, D (2009). The Failure of Risk Management: Why It's Broken and How to Fix It. John Wiley & Sons. p. 46.

Pear, R (2012). Health Law Critics Prepare to Battle Over Insurance Exchange Subsidies". New York Times

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