Question

Choose a business and describe examples of situations where the business might need business income insurance

Answer 1

A production plant of shirts in Japan.

Step-by-step explanation:

The business income insurance is demanded when a disaster occurs and the business is damaged because of it. Let's suppose that an earthquake destroyed a production plant of shirts in Japan but we insured some of the activities in the plant as follows:

1. Profit insurance: the profits received if the earthquake would not have destroyed the production plant.
2. Temporary location: due to the earthquake the insurance covers the expenditures of moving the plant to a safer location.
3. Unexpected expenditures: for reparations of damaged machinery.