Question

After graduating with a Food Technology degree, Elina is planning to start a business that manufactures halal and natural food flavoring, including cake & cookies mixes. She has bought a factory in Rawang and is currently equipping it with food manufacturing machines. Elina is also in the process of hiring some production line workers, who will be trained to work using these machines.

1, To conduct her business, Elina will be managing her administrative and marketing staff in their Kuala Lumpur office, as well oversee their production operation in their Rawang factory. Elina is equipping the factory with machines and hiring production employees. In the next 3-6 months, she may also buy some lorries & hire some drivers to transport the products to her customers. Based on Elina’s business operations, advise her on the types of business insurance that she needs to consider, and their legal effect.

You are expected to provide specific and applied examples in your answe

Answer 1

If we look at the given case, it is clear that Elina has recently started a new business and she has to protect her business from any type of unforeseen circumstances as she has already invested a lot in the business.

Therefore, in my opinion, she must have the Business interruption insurance which will provide the protection to her business from any sort of interruption in the operations. As we know the business environment is quite unpredictable and we can no forecast most of the disaster or situation that can result in the interruption of the business operations. Thus in order to avoid these situations, it is important that Eina should have insurance that can protect her business from any type of unforeseen event. This type of insurance will facilitate her safety from any sudden interruption in the business which can restrict her ability to generate revenue and pay her dues.

Legally this will ensure that all the debts and due will be recovered by the insurance coverage in case the business interruption occurs that is beyond the control of the normal decision making or stand operating situations.