Complete the following incident record for Northgate Electrical Wholesale. A burst pipe damaged stored lamps worth £18 000. The company had arranged insuran...
Question 1 Report
Complete the following incident record for Northgate Electrical Wholesale. A burst pipe damaged stored lamps worth £18 000. The company had arranged insurance for stock held in its warehouse. Its insurer agreed to pay the claim after checking the evidence.
(a) Complete this sentence: insurance transfers the financial risk of the damaged goods from Northgate Electrical Wholesale to the ________. [1]
(b) Identify two types of evidence the company could send with its insurance claim. [2]
(c) Give two reasons why a wholesaler needs insurance for goods kept in a warehouse. [2]
Answer Details
(a) Insurance transfers the financial risk of damaged goods from the wholesaler to the insurer or insurance company. [1]
(b) Evidence supports the claim by showing both that the damage occurred and what stock was affected. Two acceptable items are:
- photographs of the damage; [1]
- stock records or purchase invoices showing the goods and their value. [1]
- A repair report is also acceptable, as is a police or fire report where relevant.
(c) Warehouse stock can be damaged by events such as fire, flooding or theft. Insurance is needed because:
- compensation helps the wholesaler replace damaged goods; [1]
- it reduces the possible financial loss and helps the business continue supplying customers. [1]
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