QUESTION 1

A Gas filling station firm owns a machine that has a current market value of GH1,500,000.00. The current replacement value of other facilities in the firm, ie, standby generator, the delivery truck, and cost for the rent for the firms premises totals GH750,000.00. The firm spends GH200,000 for a six-month supply of electricity. The location of the company is in an area that has recently been taken over by a lot of human settlement and other business ventures including a transport terminal with accompanying petty theft.

In view of these, the company perceives a lot of risk exposures. For each of the following risks or loss exposures, you have been approached as a Risk Management Consultant to briefly explain an appropriate risk management technique that can be used to deal with them.

i. Physical damage to the gas filling station(2 marks)

ii. Liability lawsuit against the company arising out of a negligent operation(2 marks)

iii. Total loss of the companys property because of fire (2 mks)

iv. Failure to deliver home filled cylinder on demand as a result of fault with the delivery trucks(2 marks)

v. Theft of companys items and physical assault on workers by gang members who are in a park closer to the company

(2 marks)

b. What constitutes the pre-loss and post-loss objectives of the firm(4 marks)