The Swift Corporation has 5,000 sales representatives and employees in the United States who drive company cars

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Question Description

The Swift Corporation has 5,000 sales representatives and employees in the United States who drive company cars. The company’s risk manager has recommended to the firm’s management that the company should implement a partial retention program for physical damage losses to company cars.

  1. Explain the advantages and disadvantages of a partial retention program to the Swift Corporation.
  2. Identify the factors that the Swift Corporation should consider before it adopts a partial retention program for physical damage losses to company cars.
  3. If a partial retention program is adopted, what are the various methods the Swift Corporation can use to pay for physical damage losses to company cars?
  4. Identify two risk-control measures that could be used in the company’s partial retention program for physical damage losses.

Tutor Answer

markjesse
School: Purdue University

Attached.

Advantages

Disadvantages

1. The Swift Corporation can spare cash

1.

The

loss

held

by

Swift

if its genuine misfortunes are not as much

Corporation might be more noteworthy

as the misfortune remittance in the back

than the misfortune remittance in the

up plan's premium.

protection premium that is spared by
not obtaining the protection, and there

2. There may likewise be sizable cost

might be extraordinary unpredictability

funds.

in

the

company's

misfortune

involvement in the short run.
3.

Loss avoidance is energized for

the Swift Corporation.

2.

Expenses may really be higher,

since misfortune counteractive action
projects ought to be built up, which

4. Cash stream might be expanded, since

might be given by guarantors all the

Swift Corporation can utilize the assets

more inexpensively.

that typically would be held by the
safeguarded.

3. Contributions to a subsidized hold
under a maintenance program are not for
the most part salary assess deductible.

a. Identify the factors that the Swift Corporation should consider before it adopts
a partial retention program for physical damage losses to company cars.
1.

The aggregate sum of misfortunes that the firm will hold.

2.

The extra cost of the maintenance, for example, managerial...

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