Question

Do you think most small manufactures adequately cover losses from dependent properties in their risk management plans? (Hint- Your answer would best be explained with a hypothetical case.)

Requirements:

post should be approximately 200 words.

Answer 1

Most small manufacturers adequately cover losses from the dependent properties in their risk management plan. Dependent property’s coverage extends to protection of insured business from businesses income losses and eliminates the suspension of business operations. There are generally 4 types of dependent properties:

1. Providers- means a manufacturing location used as dependent property is not a location owned by the insured and part of the insured chain.

2. Suppliers-it is also called contributing location. It supplies parts, services or materials to insured for manufacturing products or services.

3. Buyers: it is also called recipient location. It accepts the products or services of the insured.

4. Drivers: it is also called leader location. These include anchor stores, sports and entertainment venues that draw customers to that area where our business sell products or services.

For example-

A firm (engineering) designs a piece of equipment that is going to be used in the construction firm. The firm (engineering) does not have the facility to manufacture that piece of equipment, so for this manufacturing they contract to a specialty manufacturer. As order received, manufacturing operation starts. If manufacturing facility is damaged by fire, the firm (engineering) looses the income from the sale of equipment until the manufacturer returns to start the operation again. The firm’s (engineering) loss of income is covered by the dependent property form.