you have a friend, icahn betitall, who just started ... Question You have a frie

Question

you have a friend, icahn betitall, who just started ... Question You have a friend, Icahn Betitall, who just started a small business. He is paying a hefty premium for insurance. Icahn’s insurance agent told him that he is insuring against the risk of loss on fire, theft, liability, and business interruption. Icahn also has policies for life, health, and automobiles. Icahn is planning a trip to Las Vegas. He plans to contact his agent and obtain a policy on the risk of losing his money at the blackjack table.

a. What will you tell Icahn about being able to purchase such a policy?

b. What are several methods that Icahn can choose to manage his risk exposure in Las Vegas?

Explanation / Answer

Part a

Gambling is not covered in Insurance. Therefore, any risk or loss arising out of gambling is not insurable. Blackjack Table is a form of gambling, therefore it cannot be insured. I’ll advise my friend that this sort of risks are not insurable.

Part B

He can use following techniques to maneuver the risk:

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