Please see Chapter 4 Business Services Class 11 Business Studies below. These important questions with solutions have been prepared based on the latest examination guidelines and syllabus issued by CBSE, NCERT, and KVS. We have provided Class 11 Business Studies Questions and answers for all chapters in your NCERT Book for Class 11 Business Studies. These solved problems for Business Services in Class 11 Business Studies will help you to score more marks in upcoming examinations.
Exam Questions Chapter 4 Business Services Class 11 Business Studies
Very Short Answer Type Questions
Question. What is meaning of Banking?
Answer : A banking company in India is the one which transacts the business of banking which means accepting, for the purpose of lending and investment of deposits of money from the public, repayable on demand or otherwise and withdrawable by cheques, draft, order or otherwise. In simple terms, a bank accepts money on deposits, repayable on demand and also earns a margin of profit by lending money
Question. Define Insurance
Answer : Insurance is thus a device by which the loss likely to be caused by an uncertain event is spread over a number of persons who are exposed to it and who prepare to insure themselves against such an event. It is a contract or agreement under which one party agrees in return for a consideration to pay an
agreed amount of money to another party to make a loss, damage or injury to something of value in which the insured has a pecuniary interest as a result of some uncertain event.
Question. Name two companies that offer DTH service in our country?
Answer : Airtel, Tatasky offers DTH services in our country
Short Answer Type Questions
Question. Explain the function of Insurance
Answer :
Question. Name the principle of insurance for each of the following statements:
(a)The insured is expected to disclose all the important facts related to the property insured.
(b) Insured must have some economic interest in the subject matter of Insurance contract.
(c) To claim for insurance the insured must take reasonable steps to minimize the loss.
(d) Insured is entitled to recover the loss suffered by him, up to the limit of policy amount
Answer :
(a)The insured is expected to disclose all the important facts related to the property insured- Utmost Good Faith
(b) Insured must have some economic interest in the subject matter of Insurance contract-Insurable Interest
(c) To claim for insurance the insured must take reasonable steps to minimize the loss- Mitigation
(d) Insured is entitled to recover the loss suffered by him, up to the limit of policy amount- Indemnity
Question. Explain electronic banking and state its three benefits?
Answer : Online banking also known as internet banking, e-banking, or virtual banking, is an electronic payment syste m that enables customers of a bank or other financial institution to conduct a range of financial transactions through the financial institution’s website. Internet banking is a term used to describe the process whereby a client executes banking transactions via electronic means. This type of banking uses the internet as the chief medium of delivery by which banking activities are executed Benefits are as follows:
1. E-banking facilitates digital payments and promotes transparency in financial statements
2. Banks that offer internet banking are open for business transactions anywhere a client might be as long as there is internet connection (Apart from periods of website maintenance)
3. E-banking helps in reducing the operational costs of banking services. Better quality services can be ensured at low cost.
Question. Explain the three important insurance involved in Marine Insurance?
Answer : A marine insurance contract is an agreement whereby the insurer undertakes to indemnify the insured in the manner and to the extent thereby agreed against marine losses. Marine insurance provides protection against loss by marine perils or perils of the sea. Three Things involved:
• Ship or hull insurance: Since the ship is exposed to many dangers at sea, the insurance policy is for indemnifying the insured for losses caused by damage to the ship.
• Cargo insurance: The cargo while being transported by ship is subject to many risks
• Freight insurance: If the cargo does not reach the destination due to damage or loss in transit, the shipping company is not paid freight charges.
Long Answer Type Questions
Question. A factory owner gets his stock of goods insured but he hide the fact that the electricity board has issued him statutory warning letter to get his factory. Wiring changed later on, the factory catches fire due to short-circuit which principle is violated in the case. Explain.
Answer : Fire insurance is a contract whereby the insurer, in consideration of the premium paid, undertakes to make good any loss or damage caused by fire during a specified period upto the amount specified in the policy. Normally, the fire insurance policy is for a period of one year after which it is to be renewed from time to time A claim for loss by fire must satisfy the two following conditions:
(i) There must be actual loss; and
(ii) Fire must be accidental and nonintentional
The contract of fire insurance is a contract of strict indemnity. The insured can, in the event of loss, recover the actual amount of loss from the insurer. This is subject to the maximum amount for which
the subject matter is insured. The insurer is liable to compensate only when fire is the proximate cause
of damage or loss.
The factory catches fire due to violation of principle of utmost good faith. The factory owner hided the
information that electricity board has issued statutory warning letter.
Insurance contracts also require that both parties act with the utmost good faith. This means that both
parties must accurately and fully disclose all material information. This not only ensures fairness, but
also helps insurance companies accurately price premiums for insurance applicants. Insurance policies
can be declared null and void if an applicant made a misrepresentation of material fact that was relied
on by the insurance company.
Question. Divya Garments Ltd. has a loan of Rs. 10,00,000 to pay. They are short of funds so they are trying to find means to arrange funds. Their manager suggested to claim from insurance company against stock lost due to fire in the ware house. He actually meant that they can put their warehouse on fire and
claim from Insurance company against stock insured. They will use the claim money to pay loan.
(a) Will the company receive claim if the surveyer from company comes to know the seal cause of fire?
(b) Which values did company ignore while planning to arrange money from false claim?
(c) Explain three elements of fire insurance
Answer : a) No the company will not receive claim if surveyor come to know the real cause of fire and the
contract will become null and void.
b) Principle of Utmost good faith is ignored while planning to arrange money from false claim. Insurance
contracts also require that both parties act with the utmost good faith. This means that both parties must accurately and fully disclose all material information. This not only ensures fairness, but also helps insurance companies accurately price premiums for insurance applicants. Insurance policies can be declared null and void if an applicant made a misrepresentation of material fact that was relied on by the insurance company.
c) Three elements of fire insurance are :
♦ The insured must have insurable interest in the subject matter of the insurance. Without insurable interest the contract of insurance is void
♦ The insured should be truthful and honest (Utmost Good Faith) in giving information to the insurance company regarding the subject matter of the insurance
♦ The contract of fire insurance is a contract of strict indemnity. The insured can, in the event of loss, recover the actual amount of loss from the insurer. This is subject to the maximum amount for which the subject matter is insured
Question. State Six Difference Between Life Insurance, Fire Insurance and Marine Insurance?
Answer :
| BASIS | LIFE INSURANCE | FIRE INSURANCE | MARINE INSURANCE |
| SUBJECT MATTER | The subject matter of insurance is human life. | The subject matter is any physical property or assets. | The subject matter is a ship, cargo or freight |
| ELEMENT | Life Insurance has the elements of protection and investment or both. | Fire insurance has only the element of protection and not the element of investment. | Marine insurance has only the element of protection |
| INSURABLE INTEREST | Insurable interest must be present at the time of effecting the policy but need not be necessary at the time when the claim falls due. | Insurable interest on the subject matter must be present both at the time of effecting policy as well as when the claim falls due. | Insurable interest must be present at the time when claim falls due or at the time of loss only |
| DURATION | Life insurance policy usually exceeds a year and is taken for longer periods ranging from 5 to 30 years or whole life | Fire insurance policy usually does not exceed a year. | Marine insurance policy is for one or period of voyage or mixed |
| INDEMNITY | Life insurance is not based on the principle of indemnity. The sum assured is paid either on the happening of certain event or on maturity of the policy. | Fire insurance is a contract of indemnity. The insured can claim only the actual amount of loss from the insurer. The loss due to the fire is indemnified subject to the maximum limit of the policy amount. | Marine insurance is a contract of indemnity. The insured can claim the market value of the ship and cost of goods destroyed at sea and the loss will be indemnified |
| LOSS MEASUREMENT | Loss is not measurable. | Loss is measurable. | Loss is measurable |