Celebration Extravaganza Ltd.is a mid-sized Company that manufactures fire-crackers and other fire-works display materials. In addition, from time to time, they put on displays on their premises at night for their existing and potential new customers. They have four locations across Canada. The manufacturing plant isin Ontario, with a building value of $10,000,000 is 20 years old and in good condition. CEL has older frame buildings which are warehouses within 50 ft on both sides of the plant. The other locations CEL owns are all warehouses,located in BC, Quebec and Nova Scotia. Two of these buildings are valued at $4,000,000, and one at $1,000,000 which is also 25 years old, of wood frame construction, but not in the best condition.

You are an underwriter with one of four Insurers who insure hazardous type risks. Working only with the limited Information provided, you are asked by your manager to review the risk.

a) Outline the reasons you would have to reject the risk.

 b) If in fact you chose to write the risk, name and describe the types of coverage you would provide with respect to damage to property, and/or injuries suffered to people on or off the premises from the firework displays. c) If the manufacturing plant building suffered a loss from the peril of fire, and the insured was unable to supply fireworks display products to prepaid customers, explain the coverage CEL should have in place to be able to pay for the loss. 

d) How could you share some of the building amounts (limit) of insurance, with other insurers?

 Name and briefly explain two methods that could be used to share the total limits of insurance.