Honors Theses
Date of Award
2006
Document Type
Undergraduate Thesis
Department
Business Administration
First Advisor
Karen Epermanis
Relational Format
Dissertation/Thesis
Abstract
The following analysis was created upon request from Ambrosia Furniture Company in an attempt to fully identify, analyze, and address exposure to risk. In order to evaluate and identify specific areas of risk, the report takes into consideration financial records, history of losses, and reviews company policies. These areas of risk were then further examined and analyzed to determine what actions and managerial techniques would best minimize their costs and effects. With these principles in mind, this report has further delineated these exposures into five primary groups. These groups were then correlated so as to allow for a more efficient evaluation of similar areas. When discussing direct property exposures, this report is referring to that property defined as personal property, improvements and betterments, aircraft, and watercraft, along with certain other categories. Replacement values for all exposures have been calculated and included in the analysis. These values and others are used in formulating the suggested course of action for Ambrosia Furniture Company. All recommendations are made with the expressed intent of minimizing loss due to risk, while certain others are intention but in reference to other related items. Indirect and consequential loss exposures include business interruption, contingent business interruption, and extra expenses incurred to avoid such interruptions, along with a number of various smaller exposures. The associated dollar value of loss for these exposures has been estimated; Excel sheets in the appendices are included to fully explain the calculations used in this report. Along with identifying these exposures, this report has moved on to suggest both means to reduce each exposure and what, if any, insurance mechanism might best be used to minimize costs. made with the same 9 Liability exposures were also examined; the primary exposures include, but are not limited to, employer liability, employer practices, products, and the liability arising from premises and operation. Again, these exposures were examined with a purpose of minimizing costs. With that goal in mind, appropriate recommendations on loss control, changes in company policy, and other similar risk management techniques have been provided. Included in this section is an in depth examination of available insurance policies that are designed to address the above exposures. Clarification as to which policies will and will not cover an exposure is provided in this section as well. The discussion is then rounded out with the benefits of umbrella liability insurance being examined. Personal risk exposures are those exposures that include employee benefits, worker compensation, and business continuation expenses. As part of the analysis of Ambrosia Furniture Company, past worker compensation claims have been fully analyzed and included in the appendices in an attempt to aid management in discerning important trends in the data. Also discussed is an analysis of employee benefits, along with appropriate recommendations as to implementing a new employee benefits plan. Further, suggestions have been made in an attempt to mitigate the costs associated with the loss of key personnel within Ambrosia Furniture Company. Crime exposures are the last to be examined in this report. To better understand the nature of these exposures, they have been split into two primary categories: employee dishonesty and then theft, robbery, and other loss exposures. Employee dishonesty is discussed first, along with what may be the appropriate level of coverage needed and what steps may be taken to reduce this exposure and its associated losses. Theft and other losses are then examined in a similar fashion. All calculations used in formulating the figures used in this section are included in the appendices. The following analysis was created upon request from Ambrosia Furniture Company in an attempt to fully identify, analyze, and address exposure to risk. In order to evaluate and identify specific areas of risk, the report takes into consideration financial records, history of losses, and reviews company policies. These areas of risk were then further examined and analyzed to determine what actions and managerial techniques would best minimize their costs and effects. With these principles in mind, this report has further delineated these exposures into five primary groups. These groups were then correlated so as to allow for a more efficient evaluation of similar areas. When discussing direct property exposures, this report is referring to that property defined as personal property, improvements and betterments, aircraft, and watercraft, along with certain other categories. Replacement values for all exposures have been calculated and included in the analysis. These values and others are used in formulating the suggested course of action for Ambrosia Furniture Company. All recommendations are made with the expressed intent of minimizing loss due to risk, while certain others are intention but in reference to other related items. Indirect and consequential loss exposures include business interruption, contingent business interruption, and extra expenses incurred to avoid such interruptions, along with a number of various smaller exposures. The associated dollar value of loss for these exposures has been estimated; Excel sheets in the appendices are included to fully explain the calculations used in this report. Along with identifying these exposures, this report has moved on to suggest both means to reduce each exposure and what, if any, insurance mechanism might best be used to minimize costs. made with the same 9 Liability exposures were also examined; the primary exposures include, but are not limited to, employer liability, employer practices, products, and the liability arising from premises and operation. Again, these exposures were examined with a purpose of minimizing costs. With that goal in mind, appropriate recommendations on loss control, changes in company policy, and other similar risk management techniques have been provided. Included in this section is an in depth examination of available insurance policies that are designed to address the above exposures. Clarification as to which policies will and will not cover an exposure is provided in this section as well. The discussion is then rounded out with the benefits of umbrella liability insurance being examined. Personal risk exposures are those exposures that include employee benefits, worker compensation, and business continuation expenses. As part of the analysis of Ambrosia Furniture Company, past worker compensation claims have been fully analyzed and included in the appendices in an attempt to aid management in discerning important trends in the data. Also discussed is an analysis of employee benefits, along with appropriate recommendations as to implementing a new employee benefits plan. Further, suggestions have been made in an attempt to mitigate the costs associated with the loss of key personnel within Ambrosia Furniture Company. Crime exposures are the last to be examined in this report. To better understand the nature of these exposures, they have been split into two primary categories: employee dishonesty and then theft, robbery, and other loss exposures. Employee dishonesty is discussed first, along with what may be the appropriate level of coverage needed and what steps may be taken to reduce this exposure and its associated losses. Theft and other losses are then examined in a similar fashion. All calculations used in formulating the figures used in this section are included in the appendices. 4
Recommended Citation
Martin, Jared Foster, "A Risk Analysis of Ambrosia Furniture Company" (2006). Honors Theses. 2061.
https://egrove.olemiss.edu/hon_thesis/2061
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