Risk Management at MS Company MS Company is a Trading Company involved in Import and export trade. With various suppliers from Europe and Asia, MS has to keep track of the activities of its suppliers and the entire supply chain. Indeed, MS has to ensure that quality standards and other production standards like occupation safety, labour and human rights are upheld. The shipment process also has its own challenges ranging from damage due to poor handling in shipment containers, loss of goods on transit due to theft or as a result of sea jettisoning practice, and delays in delivery. Considering MS’s internal operations, the company equally has challenges of managing the same. MS has both bonded warehouses and stores with a very large workforce. The employees are a responsibility of MS company. And given that they work in a risky environment and conditions, MS is vulnerable to heavy expenses in form of compensation and life cover for its employees in case these risks become issues or materialize. There’s also need to keep good up-to-date records and developing an up-to-date risk register for proper insurance interventions. In April 2021 as a result of COVID-19 lockdown measures across the world and disruption of port operations particularly in China, MS failed on its deliveries to its clients and as such the clients suffered considerable losses resulting from those delays. The clients are currently claiming compensation from MS management. On another occasion one of MS’s biggest in-land stores was gutted by a very big fire resulting from a careless employee who was smoking on site. MS’s fire extinguishers had expired and the Police fire Brigade did not arrive in time to put out the fire, something that resulted into a very big loss to the Company. MS had insured its store against fire with Jenkins Insurance Ltd. However, Jenkins Insurance Ltd has declined to pay for the loss partly claiming that the fire resulted from MS’s negligence and also because MS failed to follow the right procedure while making the claim. Question Advise on the different types of insurance that MS could have pursued in order to mitigate against risks in its nature of business. Explain how each of these the insurance types can be benefitial to MS’s business.
Risk Management at MS Company
MS Company is a Trading Company involved in Import and export trade. With various suppliers from Europe and Asia, MS has to keep track of the activities of its suppliers and the entire supply chain. Indeed, MS has to ensure that quality standards and other production standards like occupation safety, labour and human rights are upheld. The shipment process also has its own challenges ranging from damage due to poor handling in shipment containers, loss of goods on transit due to theft or as a result of sea jettisoning practice, and delays in delivery.
Considering MS’s internal operations, the company equally has challenges of managing the same. MS has both bonded warehouses and stores with a very large workforce. The employees are a responsibility of MS company. And given that they work in a risky environment and conditions, MS is vulnerable to heavy expenses in form of compensation and life cover for its employees in case these risks become issues or materialize. There’s also need to keep good up-to-date records and developing an up-to-date risk register for proper insurance interventions.
In April 2021 as a result of COVID-19 lockdown measures across the world and disruption of port operations particularly in China, MS failed on its deliveries to its clients and as such the clients suffered considerable losses resulting from those delays. The clients are currently claiming compensation from MS management.
On another occasion one of MS’s biggest in-land stores was gutted by a very big fire resulting from a careless employee who was smoking on site. MS’s fire extinguishers had expired and the Police fire Brigade did not arrive in time to put out the fire, something that resulted into a very big loss to the Company. MS had insured its store against fire with Jenkins Insurance Ltd. However, Jenkins Insurance Ltd has declined to pay for the loss partly claiming that the fire resulted from MS’s negligence and also because MS failed to follow the right procedure while making the claim.
Question
- Advise on the different types of insurance that MS could have pursued in order to mitigate against risks in its nature of business.
- Explain how each of these the insurance types can be benefitial to MS’s business.
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