A.

Mr Mwewa is a Journalist who retired six (6) months ago and who now wishes to set up a home based business. The other investor is the spouse who will contribute 30% to the Business Capital and earn 45 % of profits as dividends. The business operations revolves around designing products, testing, registering, Production, launching products on the market, running, monitoring and undertaking end of period reviews. The business is predominantly cash. Required: I. Justify with five (5) reasons why the Mwewas must seek insurance protection individually. (10 Marks) II. Advise the Couple of the existence of three (3) potential losses that may arise from distributing and offering products to the Public for use or consumption. (5 Marks) III. Describe three (3) ways in which the Couple can use to deploy surplus cash using Life Insurance policies. (5 Marks)

B.

You have been appointed as a risk manager of Lusaka Insurance Company. The Couple working as Directors of their company had approached an Insurance Agent working for your company with the intention of obtaining advice on how to mitigate potential losses that may arise in the course of their managing their business. However, the business discovers they over spent on Insurance cover obtained from Lusaka Insurance Company Limited which was caused by misleading information provided to the Couple by an Insurance Agent.Required:

You are required to evaluate the situation, advise whether the Insurance Company is liable for losses suffered by the business and justify your answer by giving three (3) reasons. (5Marks) [TOTAL 25 MARKS]