Law of Insurance

Presentation By
IJUMAN NP
 Insurance
A promise of compensation for specific potential future
losses in exchange for a periodic payment. Insurance is
designed to protect the financial well-being of an
individual, company or other entity in the case of
unexpected loss.

A contract (policy) in which an individual or entity receives

financial protection, or reimbursement, against losses from
an insurance company, which pools client's risks to make
payments more affordable, in exchange for a premium.
 Contract of Insurance

Contract of Insurance is a contract by which a person,

in consideration of a sum of money, undertakes to
make good the loss of another against a specified risk,
e.g., fire, or to compensate him or his estate of
happening of a specified event, e.g., accident or death.
 Important Terms
Insurer or Insured: the person undertaking the risk is
called the insurer, assurer or underwriter and the
person whose loss is to made good is called the insured
or assured.

Premium: the consideration for which the insurer

undertakes to indemnify the assured against the risk is
called the premium. It may be a single or periodical
payment

Policy: the instrument in which the contract of insurance

is generally embodied is called the policy. The policy is
not the contract, It is the evidence of the contract.
 Important Terms (contd…)
Subject-Matter of insurance and insurable interest:
the thing or property insured is called the subject
matter of insurance, and the interest of the assured in
subject matter is his insurable interest.

Perils insured against: that which is insured is the loss

arising from uncertain events or causalities, i.e.,
destruction of or damage to the property or the death
or disablement of a person, and these are called perils
insured against.
 Kinds of Insurance

Life Insurance: in this case a certain fixed amount

becomes payable on the death of the assured or on the
expiry of a certain fixed period, whichever is earlier.

Fire Insurance: It covers losses caused by fire.

Marine Insurance: It covers all marine losses, that is to

say, the losses incidental to marine adventure.
Fundamental Elements of Insurance
1. Essential elements of a valid contract
2. Utmost good faith.
3. Indemnity
4. Insurable interest
5. Causa proxima
6. Risk must attach
7. Mitigation of loss
8. Contribution
9. Subrogation
10. Period of insurance
THANK YOU