MADAM SCHOLASTICA'S HAIR SALON Madam Scholastica owns a big salon in centre of Lagos with fifty hair driers and two motorized: generators in a large premise. She had in her employment, sixty staff out of which forty five are professional stylists, five cashiers and ten support staff. The company makes a lot of money from high class members of the society who are prepared to pay heavily for their services at their convenience, even in their offices or homes. The company has comprehensive insurance cover. on 'all their four vehicles. It also has Employer's Liability Insurance which it Continues to renew for the past five years without making claims.  The policies were taken from different companies. Recently, a chemical was bought for washing hair which caused damage to .many customers' hair, this.led to the payment of compensation to, some customers while others deserted the salon. The director had been advised to obtain other insurance policies to cover their liabilities to customers and third parties but did *not do anything about it. In the last two weeks of operation, four staff had accident with the Company's car while returning from home service to a customer. Twb of them were seriously injured. A cashier disappeared, with a sum of N21-00;000 cash withdrawn from the company'S bank account.

(a)Under what policy will the injured employees be compensated?

(b) State and explain two policies that the director should have taken to cover their liabilities to customers and third parties.

(c) What other insurance policies would the company take in future to cover the cashiers that handle cash?

(d) Explain two other insurance products that will be useful to the company. 
 

(a) Explain the following terms used in insurance.
(i) peril
(ii) hazard.
(iii) disclosure.

(b) Differentiate . between the following classes of risks: (i) pure and speculative risks; particular and fundamental risks; (iii) static and dynamic risks. 
 

(a) Explain two factors that could reduce the amount of indemnity under an insurance-contract.

(b) A property owned by bal Ltd was covered by three insurers, A, B and C for the Sum of N150,000, N120,000 and N90,000 respectively. The insured suffered a loss of N60,000. Calculate the liability of each insurer. 
 

(a)(i) What is a proposal form?
(ii) List four general questions that are contained in a proposal form.

(b) List and explain three documents used in effecting insurance contracts. 
 

(a) What is reinsurance?

(b) Explain four essential features of insurable interest.