QUESTION 3 (4 Marks)

REQUIRED:

What is your maximum financial loss,in dollar figures in the following situations:

a)As a sole proprietor, you keep separate business and personal bank accounts. You have $20,000 in your business account. You and your only employee have just been successfully sued for $75,000 for your employee's negligence while on the job (1 mark)

b) You are a partner in a standard partnership with two others. All partners contributed $30,000 and there is a lawsuit against all of the partners for $120,000. (1 mark)

c) You are an innocent partner in an Alberta limited liability partnership. You contributed $30,000 and there is a lawsuit for $100,000 against all of the partners based on another partner's negligence. (1 mark)

d)You are a partner in an Alberta limited liability partnership, having contributed $20,000 along with two other partners. It is not working out financially, so a decision is made to end the partnership. There is $60,000 currently owing to the bank. (1 mark)

QUESTION 4 (3 Marks)

REQUIRED:

a) What is one type of insurance you will obtain for the hypothetical business of a Yoga Studio ? (1 mark)

b) Name and briefly describe one of the four principles of insurance, providing an example in relation to the insurance you obtained above in a). (2 marks)