Read the scenario below and answer the questions that follow. ADONISI FASHION (AF) The management of Adonisi Fashion wants to insure their stock against fire, changes in fashion and theft. They conducted research on insurable risks and understand the importance of insurance. 4.3.1 Name TWO insurable risks in the scenario above. 4.3.2 Explain the advantages of insurance for businesses.

NSC Business Studies Actions regarded as discriminatory by the Acts: Read the scenario below and answ

Read the scenario below and answer the questions that follow - NSC Business Studies - Question 4 - 2023 - Paper 2

Question 4

Read the scenario below and answer the questions that follow. ADONISI FASHION (AF) The management of Adonisi Fashion wants to insure their stock against fire, chan... show full transcript

Worked Solution & Example Answer:Read the scenario below and answer the questions that follow - NSC Business Studies - Question 4 - 2023 - Paper 2

Step 1

4.3.1 Name TWO insurable risks in the scenario above.

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Answer

Fire
Theft

Step 2

4.3.2 Explain the advantages of insurance for businesses.

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Answer

Insurance provides several crucial advantages for businesses, including:

Risk Management

Businesses can mitigate financial losses from unforeseen events such as theft or fire, thereby protecting their assets.

Financial Stability

Insurance ensures that businesses can maintain operational continuity even after a significant loss, helping in the prompt recovery and stabilization of financial health.

Legal Compliance

Certain types of insurance are mandatory, ensuring that businesses adhere to legal requirements and avoid penalties.

Increased Credibility

Having insurance boosts a business's credibility and trustworthiness in the eyes of clients and stakeholders, demonstrating reliability and responsibility.

Peace of Mind

Insurance allows business owners to focus on their core operations without the constant fear of financial ruin due to unexpected incidents.