Forum Post #1
Ocean marine insurance is made up of four main components: hull insurance, cargo insurance, freight insurance, and protection and indemnity insurance. Hull insurance covers damage to the boat itself; cargo insurance protects the shipper from losses. P&I insurance protects the ship’s owner for damages caused by the ship to other people or its crew. “Freight insurance indemnifies the ship owner for the loss of earnings if the goods are damaged or not delivered” (Jared, 2011). Three assumptions are made when making an ocean marine insurance contract: the ship is seaworthy, no deviations from the planned route, and the ship is being used for legal purposes (Jared, 2011). For example, a vessel shipping cars across the Atlantic Ocean, assuming no illegal activities, damages a dock. That would be covered under the P&I insurance.
Equipment breakdown insurance covers losses that are the direct result of an accidental breakdown of covered equipment. A few types of items that are covered are refrigeration and freezer units and manufacturing machinery (Jared, 2011). There are many types of coverage that can be included in an equipment breakdown insurance contract like expediting expenses, spoilage damage, and newly acquired premises. An example of expediting expenses coverage would be needing to overnight a new part to fix a machine which would be covered by the insurance company. Losses due to a freezer breaking down in a butcher’s shop would also be covered.
Builders risk insurance covers building that are under construction at the time of the contract. It can be purchased by the building owner, contractor, or subcontractor (Jared, 2011). The coverage of the building under construction is equal to the value of the building upon completion. For example, if a hospital is building a new surgical center and a fire starts because of a faulty outlet, the loss is covered by the insurance company.
Forum Post #2
Briefly describe three of the following commercial property insurance coverage. Provide an example of each.
Builders Risk: Buildings that are covered is ones that are under construction at the time of the contract. It can be purchased by the owner that owns the building or even the contractor. The coverage that is for the building under construction and it is equal to the building when it is completed (Reread, 2011). An example would be if a new school is being built and a plug starts a fire, the loss can be covered by the insurance company because the building was in the process of being built.
Inland Marine: This grew out of the ocean marine. It was developed in the 1920’s to help cover the property being transported over land, means of transportation such as bridges and tunnels, and a property of a mobile nature (Reread, 2011). The major classes of the inland marine is domestic goods in transit, property held by baileys, mobile equipment, property of certain dealers, and instrumentality of transportation and communication (Reread, 2011).
Domestic goods in transit are shipped by trucking companies, railroad, and airlines. The damages to these can be caused by fire, lightening, flood, and even earthquake. Also from derailment, collision, and overturn of the vehicle. These can be insured by the inland marine policy (Rejada, 2011).
Property held by baileys, baileys is someone who has temporary possession of a property that belongs to someone else. Examples include dry cleaners and television repair shops. Under the common law the baileys are legally responsible for damages to customers’ property only if they or the employees are negligent (Reread, 2011).
Mobile equipment is that floaters can be used to cover property that is frequently moved from one location to another. Examples is tractor, crane, and even bulldozers (Reread, 2011).
Property of certain dealers is also used to insure the property of certain dealers. Inland marine or inland marine “block” policies are used to insure property of jewelers, dealers in diamonds, fine art, and even musical instruments (Reread, 2011).
Instrumentality of transportation and communication refers to a property that is at a fixed location (Reread, 2011).
Ocean Marine: This is made up of hull insurance, cargo insurance, freight insurance, and even protection and indemnity insurance.
Hull insurance is damages that are done to the boat itself (Reread, 2011).
Cargo insurance protects the shipper from the losses that have happened (Reread, 2011).
Freight insurance indemnifies the ship owner for the loss of earnings if the goods are damaged or not delivered (Reread, 2011).
Protection and indemnity insurance protects the ship’s owner for damages caused by the ship to other people or the crew (Reread, 2011).
Reread, G.E. (2011). Principles of risk management and insurance (11th ed.). Boston, MA: Pearson Prentice Hall. ISBN: 9780136117025
Forum Post 3
Both the clerk and the owner of the business would be covered from losses. Under the liability section, any injuries to customers would be covered by the insurance company. Since the clerk is acting within the scope of his employment he is also covered.
Customer injuries are covered under the medical expenses section of the business owners policy. “The medical expenses are paid without regard to legal liability up to the medical expense limit” (Jared, 2011). The insurance company covers the legal fees as well.
Under the business liability section of the business owners policy, any lawsuit for false arrest is covered. Any losses from the lawsuit would be covered by the insurance company (Jared, 2011). The legal fees are also covered by the insurance company.
Reidar, G. E. (2011). Principles of risk management and insurance (11th ed.). Boston, MA: Pearson Prentice Hall.
Forum Post #4
A store is insured for liability coverage under a business owner’s policy. Explain whether the following situations are covered under the business owner’s policy. Treat each situation separately.
A clerk accidentally injures a customer with a shopping cart. Both business owner and the clerk are sued.
In this situation the clerk and owner would be covered from the losses and under the liability section if the customer has injuries it would be covered by the insurance company. Since the clerk is working in the business when it happens then he is also covered (Reread, 2011).
A customer slips on a wet floor and breaks a leg.
Under the business owner’s policy the customer’s injuries are covered under the medical expenses section. The expenses are paid without the liability, up to the medical limit. The legal expenses/fees will also be covered (Reread, 20110.
The business owners have a customer arrested for shoplifting. The customer is innocent and sues for damages.
The section called business liability is that any lawsuit for false arrest is also covered within this section. The losses from the lawsuit will also be covered by the insurance company and also within this like the example above the legal expenses/fees will also be covered (Reread, 2011).
Reread, G.E. (2011). Principles of risk management and insurance (11th ed.). Boston, MA: Pearson Prentice Hall. ISBN: 9780136117025.
Forum Post #5
When the coefficient is less than1, demand is said to be inelastic; the percent
Changes in quantity demanded are less than the percent change in price. When the
Coefficient is greater than 1, the quantity demanded changes relatively more than the price and the demand are thus described as elastic. Of course, there are degrees
Of responsiveness. The larger the coefficient, the greater the responsiveness.
The price elasticity of demand depends on either if the coefficient is greater (elastic) or less (inelastic) than one of the relative percentage price.
A bottled of water is one of the most important commodity in the nation, because water is about 60% – 75% of the body and it is needed and used for just about everything from cooking to cleaning and most of all its sustain our way of life. The price of water can be a little of nothing to quite a bit in the third world country. For this water is Inelastic.
A tub of toothpaste is apart of our personal hygiene. It comes in many flavor, size and shapes. This item would be purchase regardless of the price, because of an individual preference and for this reason it would be consider inelastic.
Cookie dough ice cream is something of a want and not a necessity. Only people who like cookie dough would pay whatever the price for it, but if the price get out of budget then it would stay on the shelf and another flavor would be choosing and this would be consider a elastic.
Fresh green beans is like cookie dough ice cream, because everyone don’t eat green beans, so if the price rise or fall it will not affect the relative percentage price, so I think this is elastic.
Gasoline is one of the necessities of our way of life. We need it for transportation and all types of equipment. If the price goes up we, we might gripe and fuss, but we will pay for it. Now this is surely inelastic.
Marcher, R., & Pate, J. (2013). Microeconomics principles and policies. San Diego, CA: Bridge point Education, Inc.
Forum Post #6
Analyze the determinants of the price elasticity of demand and determine if each of the following products are elastic or inelastic:
- bottled water
- cookie dough ice cream
- fresh green beans
“Elasticity is a measure of how the dependent variable responds to changes in any one of the independent variables.”(Marcher R., $ Pate, J., 2013) When demand rises it causes changes in prices and it is called elastic. When demand is even or it drops it is considered to be inelastic.
Bottled water – This is a product that everyone needs. There is a constant need for water. Since the demand does not vary therefore the price does not vary and this is considered inelastic.
Toothpaste – Everyone uses this product. However there is a wide variety of toothpaste. There are many different brands containing many different additives such as, whiteners and cavity fighting agents. Some also contain mouthwash or hydrogen peroxide for cleaning. The price varies greatly. This would be considered elastic.
Cookie Dough Ice cream – Just about everyone loves Ice Cream. There are many flavors. Cookie Dough is only one. I like it but it is not my favorites. There is a lot of competition so therefor there are a lot of different prices. Sometimes the company name determines the price. Some people like Blue Bell, Valley Bell, Hagan Dias, or Prestige, just to name a few. This would be considered elastic.
Fresh Green Beans – Fresh green beans is affected by their availability. In the winter months they have to be grown in hot house which are limited or they are imported from a warm climate which means they are not exactly fresh. Therefore the prices increase. In the summer the prices go down. However, if we have a drought or floods during the spring, prices will increase be of supply. This is considered elastic.
Gasoline – The price of gasoline faces many factors. There are state and local taxes and the time of the year. The demand goes up during the summer months because of increased travel so prices go up. The price is also affected by OPEC. If the decide to cut the supply of oil gasoline goes up. Recently they have not been cutting the supply and prices have dropped. This is considered elastic.
Marcher, R., & Pate, J. (2013). Microeconomics principles and policies. San Diego, CA: Bridge point Education, Inc.
Forum Post #7
The text states that Externalizes can be positive or negative and positive externalizes are not so obvious (Marcher & Pate, 2013). In other words the negative externalizes is something we would know, because it impose on the public in an indirect way. For example, I live near military training area. The training is for our soldiers to become more efficient in their individual jobs, by firing different types of weapons. They might not be close but they sound like they are right out in the back yard and not just in my little town but every town that surround the training area and believe me we are not as close as it seams, but noise is loud enough to vibrate the window of the house. The positive of the externalize is that they will be able to deploy and defend our nation.
The Government needs to get involve with externalizes to bring about market efficiency to help regulate the negative externalizes that infringe on society and out world and a good example would be the one that the text indicate with the steel mill about the air quality and its not just the steel mills. In the news about the pollution where people whore mask and was recommended to stay in doors, because the emission of the automobiles.
Marcher, R., & Pate, J (2013) Microeconomics principles and policies. San Diego, CA: Bridge Education, Inc.
Forum Post #8
Explain the difference between a positive and negative externalize. In your analysis, make sure to provide an example of each type of externalize.
Externalizes the effect something has on another. “Externalizes are cost or benefits associated with consumption or production that are not incurred by the consumer or producer, and are therefore not reflected in market prices.” (Marcher, R. & Pate, J., 2013) In our local community we have a paper mill. They provide jobs and financial help for many of the local people. However, they cause a negative externalize by the pollution they produce. The air and water quality is very poor. They have been made to install filters and to monitor their out put into the local water ways.
Why does the government need to get involved with externalizes to bring about market efficiency? What solutions need to be provided for your examples?
The reason the government need to get involved is because they have authority to hold these people accountable for what they are doing. They will not listen to individuals. The government can fine them a force the to clean things up. The paper mill has been made to install filters reroute the water they release from the plant. The have to clean up the run off. They have digging new lined dump areas for the waste materials from the plant. They are continued to be monitored.
Marcher, R., & Pate, J. (2013). Microeconomics principles and policies. San Diego, CA: Bridge point Education, Inc