2-1. A family had a printing business in a garage on its property. small child was injured playing near a machine in the garage. The family had medical insurance that excluded injuries that occurred in an area of business.  Considering the legal and social viewpoint of insurance, should the insurance company for medical care? Explain your reasoning.

2-2. A business purchased a building for $2.2 million dollars a year ago. A retail store offered the firm $1.8 million to buy it. A similar building was recently sold for $2.6 million.  The owner seeks to renew fire insurance coverage with a policy limit of $3 million. In line with the indemnity principle, assume you are the insurance company. What limit would you offer? Explain your reasoning.

2-3. The Law of Large Numbers plays a big role in the insurance world. Do you agree that it is important? Explain your reasoning.

2-4. All insurable risks will not qualify as an insurable loss. A man requested insurance to cover the loss of a bicycle that is used in ironman triathlons. The insurer declined pointing out the premiums would be too high. Also, the loss would be trivial. Do you agree? Explain your reasoning.

2-5.  Tell someone the story titled “Where There's Smoke, There's Fire.” Ask the person if the judge was right. Who did you tell? What did the person say? Do you agree with the judge or the person?

2-6. In terms of frequency and severity, should a person purchase an insurance policy that covers loss of life if he dies in a terrorist attack at the Olympics?  Explain your reasoning.

2-7. In terms of frequency and severity, should an insurance company agree to cover loss of life for an adventure traveler who plans to walk from Shanghai to Moscow? Explain your reasoning.

2-8. In terms of frequency and severity, should an insurer agree to cover the risk of earthquake damage to an office building in San Francisco? Use Internet research to support your answer.