Discuss the Value of Business Interruption Insurance to a Small

question 107

Essay

Discuss the value of business interruption insurance to a small business. Why do you think many owners fail to appreciate the importance of this coverage?

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Definitions:

Initial Assignment

The initial distribution or allocation of tasks, responsibilities, or resources at the start of a project or process.

Liability Rule

A legal principle that allows for compensation when someone's action causes harm or loss to another, even without an agreement between the parties.

Injunction

A legal order by a court requiring a person or entity to do or cease doing a specific action.

Coase Theorem

An economic theory that suggests that private parties can solve the problem of externalities among themselves, regardless of the initial distribution of rights, as long as property rights are well-defined and transaction costs are low.