Question

Ruth obtains a fire insurance policy on her house from Safety Insurance Company. Later, after she moves out and the house is empty, a fire destroys the structure. Most fire insurance policies require that at the time of a loss, the insured premises be

a. vacant and uninhabitable
b. unoccupied but habitable
c. empty
d. occupied

Lighting Concepts, Inc., a trade fixture vendor and installer, wants to insure itself against injuries to employees and others on the premises during and after work hours. This business should obtain

a. professional malpractice insurance
b. product liability insurance
c. workers' compensation insurance
d. general liability insurance

Gail, an inventor, has tools in her workshop. She has a patent on her most recent invention, a convection oven. She licenses the patent to Housewares, Inc. Her tangible personal property includes?

a. the tools
b. all of the choices
c. the patent
d. the license

Answer 1

Ans 1)

Option d. Most fire insurance policies require that at the time of a loss, the insured premises be occupied. If it is vacant or empty, then the insurance companies may deny the policyholder any compensation. All this information is mentioned in the terms and conditions of the insurer.

Ans 2)

Option d. Lighting Concepts, Inc., should obtain a general liability insurance as it protects the company from any claims of bodily damage or medical expenses to be paid. Any injury to the worker resulting from the business operations is covered under this insurance scheme.

Professional malpractice insurance protects an individual or a company from the damages caused by the negligence of a hired professional to perform a service.

Product liability insurance protects a company from any claims of injury or harm by a customer due to the usage of a product of the company.

Workers compensation insurance protects employees from any work-related injuries. It helps the injured employees to recover and come back as soon as possible without having to bear the large medical expenses.

Ans 3)

Option a. The tools of Gail in her workshop are her tangible personal property. Patents and license are intangible assets as they are not physical in nature.