insurance law

2. Insurance Definition
• Insurance is a contract whereby, in return for the
payment of premium by the insured, the insurers
pay the financial losses suffered by the insured
as a result of the occurrence of unforeseen
events.

3. 3
CONTRACT OF INSURANCECONTRACT OF INSURANCE
In between the insured and insurerIn between the insured and insurer
INSURED:-INSURED:- Party effecting insurance,Party effecting insurance,
(Individual, Company, Firm,(Individual, Company, Firm,
Corporate body etc., withCorporate body etc., with
legal status)legal status)
INSURER:-INSURER:- Party granting the protectionParty granting the protection
under an insurance policy.under an insurance policy.
Policy:-Policy:- Is the evidence of contractIs the evidence of contract

4. 4
1. Rate of contribution or premium
2. The degree of hazard it is exposed to.
3. Classification of various types of properties.
PRINCIPLES OF INSURANCE

5. 5
IMPORTANT ELEMENTS INVOLVED IN
THE CONCEPT OF INSURANCE
 Subject matter of insurance.(property, human
life, machinery, goods etc.,)
 The PERIL (risk)
 The financial loss.

6. Risk
• The term Risk is used to describe all the
accidental happenings which produce a
monetary loss. For e.g.: A factory catching fire, a
ship sinking etc.

7. Principles of Insurance
Utmost Good Faith
Insurable Interest
Indemnity
• Subrogation
• Contribution
Proximate Cause

8. Utmost Good Faith
 Good faith- Let the buyer beware
 Declaration of all material Information
about the subject mater of insurance

9. Insurable Interest
• The legal right enjoyed by the owner of a
property to insure is called ‘Insurable
Interest’. The insurance will become null
and void, without the insurable interest.

10. Indemnity
• The principle of Indemnity states that under the policy of
insurance, the insured has to be placed after the loss in
the same financial position in which he was immediately
before the loss.

11. Proximate Cause
• The active efficient
cause that sets in
motion a train of events
which brings about a
result without
intervention of any force
started and working
actively from a new
independent source.

12. SCOPE OF INSURANCE:SCOPE OF INSURANCE:
General Insurance is divided into threeGeneral Insurance is divided into three
categories:categories:
FIRE,FIRE,
MARINEMARINE
&&
MISCELLANEOUSMISCELLANEOUS

13. FIRE INSURANCE
FIRE INSURANCE BUSINESS:
Loss due to FIRE, LIGHTINING, EXPLOSION,
IMPLOSION,, RIOTS & STRIKES, IMPACT BY
RAIL, AIRCRAFT DAMAGE, EARTH QUAKE,
FLOOD, STORM, TEMPEST, TORNADO,
TYPHOON, CYCLONES & LAND SLIDE.

14. MARINE INSURANCE BUSINESS:MARINE INSURANCE BUSINESS:
This is the oldest branch of Insurance comprisingThis is the oldest branch of Insurance comprising
HULL & CARGO.HULL & CARGO.
Hull Insurance deals the Loss associated withHull Insurance deals the Loss associated with
floating crafts, Cargo insurance provides coverfloating crafts, Cargo insurance provides cover
in respect of loss or damage to goods duringin respect of loss or damage to goods during
transit by rail, road, sea or air.transit by rail, road, sea or air.

15. MISCELLENOUS INSURANCE BUSINESS:MISCELLENOUS INSURANCE BUSINESS:
Mainly includes the motor business, accident,Mainly includes the motor business, accident,
aviation , engineering and guarantee insurances.aviation , engineering and guarantee insurances.