Property and Casualty Insurance

Mark Arkanfarkar (purely fictitious name) and his wife, Mary, have some concerns about their entire insurance program, which includes their personal insurance and their home based business. They are looking for advice and suggestions, as pricing and coverage are important to them. Their entire livelihood is tied up in their home and business. They have a very nice home, valued at $ 650,000, (excluding land) located in Forest Lake, MN. Mary does not own much valuable jewelry, except for her engagement and wedding set valued at $ 9,250. They own a two cars, a 2012 Lexus and a 2009 Chevrolet Tahoe. They also own a new boat, motor and trailer used for fishing, waterskiing and other water sports. Their family business is a successful florist shop. They have a separate building for their retail florist shop which is connected to a small greenhouse, used by the insured to grow some of their own flowers, plants and herbs that they sell. The value of the shop and greenhouse was recently appraised at $ 280,000, and the business personal property was valued at another $ 200,000. Son, Matt, 15, and daughter, Molly, 12, have a dog, affectionately called, Muffin. Muffin is a Mastiff, standing 3 feet tall and weighing about a dog biscuit less than 200 lbs. Matt enjoys swimming and Molly enjoys gymnastics. There is a full size, in-ground swimming pool and professional quality trampoline in the back yard, along with Muffin's elaborate (and structurally reinforced) dog house. In addition, a large, 4 stall, detached garage houses the 2 cars, the boat and accessories, the pool equipment and the riding lawn mower and other yard maintenance equipment. The Arkanfarkars all work in the business and there is one full time and one part time employee, who help out during the busy seasons and for vacations. While the greenhouse does provide some of the products that are sold, about half the product has to be purchased from wholesalers and shipped to the shop. The florist shop is climate controlled, has special lighting, special heating and does have an automatic watering system for the flowers and plants. 3 years ago the florist shop expanded its operations, invested in a new computer system, and initiated a website and internet sales. The 2008 Ford van, owned by the business, is used for local deliveries and is driven by Mr. Arkanfarkar or one of the employees. Business is very good.

ASSIGNMENT:

Using all the risk management knowledge and information available to you during this course, please put together a comprehensive program to protect the assets of the Arkanfarkars. You may choose to report on EITHER the personal exposures of the family OR the business (commercial) exposures of the flower shop. Do Not write your report on both exposures, (pick one or the other). You should suggest as many risk management opportunities as you can that may apply. Remember to use all 6 steps of the risk management process to complete your analysis (Chapter 2). For example, if the purchase of homeowners insurance is deemed to be an appropriate method to handle that exposure, then dead bolt locks, smoke detectors and fire extinguishers would be opportunities to apply risk reduction techniques for that risk exposure. (Remember, that often more than one technique can be used for the same risk exposure, but not all techniques are appropriate for each particular exposure). Further, if it is determined that the purchase of insurance is the most appropriate response, explain which policy is designed to cover the risk involved. Please be careful to mention any important exclusion(s) in the policy of your choice that may impact policy coverage and the insured's decision to buy. If the purchase of insurance is not deemed to be the appropriate response, please explain why the alternative chosen by you is a better option and how it should be applied.