Question

In: Economics

Consider a firm that is forced to suspend its operations due to a flood event at...

Consider a firm that is forced to suspend its operations due to a flood event at one of its supplier's production facilities. Which of the following insurance policies would compensate the firm for lost profits during this period?

The firm's business interruption insurance

The supplier's property insurance

The supplier's business general liability insurance

The supplier's business interruption insurance

Solutions

Expert Solution

Answer:

OPTION D: The supplier's business interruption insurance

Reason: Due to some disaster like situation at the supplier's end, the firm faced loss due to halt in production caused by interruption in the supply from supplier. Such insurance will be covered under the scheme of supplier's business interruption insurance.

Rahul Sunny answered 2 years ago
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