Project Materials

RELEVANCE OF INSURANCE POLICY IN DISTRIBUTION AND TRANSPORTATION

ABSTRACT

The goal of this study is to determine the importance of insurance policies in distribution and transportation, with a focus on Nigeria Bottling Company PLC, Owerri. The study is roughly divided into five chapters. The first chapter is the work’s introduction; it specifies the issue statement, purpose of the study, research question and hypothesis, significance of the study, and so on. The second chapter includes a review of the literature on the topic. It covers insurance, insurance kinds, insurance doctrine, marine insurance, and marine insurance losses, among other things. The third chapter describes the research technique, including how data was obtained, sorted, and used in the research activity. The fourth chapter presents and analyses the research/data collected, as well as the reported results. The fifth and last chapter comprises the summary, recommendation, conclusion, and bibliography.

Chapter one

Introduction

Insurance is a must-have for any organisation or industry involved in distribution and transportation because it protects the organisation from unforeseeable events that may occur during distribution and transportation.

The importance of insurance policies in distribution and transportation will not go unnoticed by an organisation seeking to minimise and eliminate risks associated with distribution and transportation.

Because man has an inherent instinct to survive, he reacts to avoid threats that endanger the successful movement of products; this applies to organisations involved in distribution and transportation.

This requires an insurance policy. Furthermore, when commodities are transported from one location to another, they are subjected to risks such as cargo loss, damage, delay, etc.

According to Nweke (2000: 307), insurance is a tool for mitigating the level of harm and compensating those affected. The insured is indemnified when he is returned to his pre-risk position. Insurance policy, as it relates to distribution and transportation, must include some element of unpredictability.

The uncertainty might be either, as in the case of life insurance, where the occurrence of the event is dependent on unintentional reasons. An insurance can also be defined as a contract in which the “INSURER” agrees to pay a specified sum of money or its equivalent in exchange for money paid to him (Premium) by another person known as the “INSURED” if a specific catastrophe occurs. Distribution and transportation encounter numerous risks that must be managed well in order to be successful.

1.1 Background of the Study

The Nigerian Bottling Company (NBC) was established in November 1951 as a subsidiary of the A.G. Leventis group, with the franchise to bottle Coca-Cola products throughout Nigeria, with its headquarters in Ikeja, Lagos state.

The Owerri plant, the researcher’s focus location, was established in 1982 and is located on the Owerri-Onitsha road, off the control post roundabout.

They produce a selection of soft drinks ranging from coca-cola, sprite, fanta orange, fanta tonic, club soda, krest-bitter lemon, five-alive, Eva water, and so on. The corporation does not have a centralised purchasing department, but instead operates a decentralised purchasing system.

The company’s sales coverage in Imo state includes Owerri, Orlu, Okigwe, Mgbidi, and Mbaise. The products are disseminated through many sorts of distribution systems.

These groups are referred to as first class distributors, whilst the second group is designated as second class distributors by the branch plant manager.

Under typical conditions, the factory produces approximately thirty thousand (30,000) centres of minerals every day and operates in two shifts.

1.2 Statement of the Problem

Obviously, the Nigeria Bottling Company, Owerri Plant has several issues that the researcher needs address in order to complete her investigation. However, the focus of this study is on the “Relevance of Insurance Policy in Distribution and Transportation” with the Nigeria Bottling Company Owerri facility serving as a case study. Some of the problems are listed as follows:

1. Despite the fact that the corporation has an insurance policy, people involved in distribution and transportation have a specific time restriction after which the insurance coverage expires and they are no longer participating.

2. There is no purchasing department at the Nigeria Bottling Company, Owerri facility; instead, purchasing is handled by the quality assurance department.

3. Although the organisation practices insurance policy, there is no designated department to manage policy. In other words, it is managed by the personnel officer.

4. There is an issue with distribution and transportation during the wet season, which prevents us from fulfilling the actual aim.

1.3 PURPOSE OF THE STUDY

The overall goal of this study is to conduct a debt analysis in the following areas:

a. Determine how insurance affects the organization’s operations.

b. Determine the type of contracts or items insured by the Nigeria Bottling Company, Owerri.

c. Determine the extent to which Nigeria Bottling Company guarantees its distribution and transportation.

d. Determine the magnitude of any losses incurred by Nigeria Bottling Company Owerri due to damages, losses, thefts, and so on.

e. Determine how to best reduce excessive losses with proper documentation.

1.4 Significance of the Study

This research is really important. Today’s industries pay little or no attention to the importance of insurance policy in distribution and transportation. However, this study would be extremely useful to any organisation involved in insurance, distribution, and transportation.

It will also highlight the importance of insurance for organisations that do not currently practise it, particularly those in the distribution and transportation industries. When completed, the work will serve as reference materials for other academics in the subject of study.

This study is required for the researcher to receive the Award of Higher Diploma in purchasing and supply, and she will not be awarded this certificate unless she completes this research. It will also provide an opportunity to gain skills and expertise for future research projects.

1.5 RESEARCH QUESTIONS.

a. Does the organisation or corporation recognise the importance of having an insurance policy?

b. If yes, what form of insurance coverage does the company provide?

c. Does the Nigeria Bottling Company, Owerri, handle distribution and transportation?

d. What are the implications of insurance in distribution and transportation?

e. Are all distribution and transportation-related risks insurable?

1.6 Statement of Hypothesis

These hypotheses are viewed and intended to help the organisation achieve its goals by investigating the challenges associated with them.

H0: The Nigeria Bottling Company cannot operate without a distribution and transportation insurance policy.

H1: The Nigeria Bottling Company can operate without an insurance policy in distribution and transportation.

Ho: The distribution system of Nigeria Bottling Company Owerri cannot be functional without an insurance coverage that covers risks in transportation and distribution.

Ho: The Nigeria Bottling Company Owerri’s distribution system can be effective even without an insurance coverage that covers transportation and distribution hazards.

1.7 SCOPE OF THE STUDY

For a proper understanding of the importance of insurance policy in distribution and transportation, this study would have included all distribution and transportation enterprises. This is not conceivable because the researcher is a student who may lack the necessary resources to do such intricate study.

To this end, the researcher decided to focus on the importance of insurance policies in distribution and transportation at Nigeria Bottling Company Owerri.

With the expectation that whatever happens in Nigeria Bottling Company will be utilised to generalise the issue in all enterprises involved in distribution and transportation.

In this regard, the researcher will work with the purchasing, distribution and transportation, personnel, and administrative units.