This document provides an overview of key concepts in insurance including:
1. Utmost good faith requires full disclosure of material information by both parties.
2. Indemnity means compensation to restore the insured to their original financial position.
3. Subrogation transfers rights from the insured to the insurer after indemnification for a loss.
4. Insurable interest requires the insured to suffer a financial loss from damage to the insured object.
This document provides an overview of key concepts in insurance including:
1. Utmost good faith requires full disclosure of material information by both parties.
2. Indemnity means compensation to restore the insured to their original financial position.
3. Subrogation transfers rights from the insured to the insurer after indemnification for a loss.
4. Insurable interest requires the insured to suffer a financial loss from damage to the insured object.
This document provides an overview of key concepts in insurance including:
1. Utmost good faith requires full disclosure of material information by both parties.
2. Indemnity means compensation to restore the insured to their original financial position.
3. Subrogation transfers rights from the insured to the insurer after indemnification for a loss.
4. Insurable interest requires the insured to suffer a financial loss from damage to the insured object.
Head of The Department List of members: Dr. Md. Nur Alam Siddik 1. 1920051 Monirul Islam 2. 1920052 Md Shan Zid Hasan Associate Professor of 3. 1920053 Jahirul Islam Joy Begum Rokeya University of 4. 1920054 Munna Hossain Rangpur. 5. 1920056 Md Abdullah-Al-Jiyad 6. 1920055 Md Khairul Isam 7. 1920057 MehediHasan(absent) 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. Risk • Risk is the chance something harmful or unexpected could happen. For i.e. A factory catching fire, a ship sinking etc. Principles of Insurance
› Utmost Good Faith
› Indemnity › Subrogation › Contribution › Insurable Interest › Contribution › Causa Proxima Utmost Good Faith Good faith- Let the buyer beware
Declaration of all material Information about
the subject mater of insurance Material Information is that information which enables the insurer to decide: a. whether he will accept the risk and b. if so, at what rate of premium and subject to what terms and conditions. Indemnity Indemnity means security, protection and compensation given against damage, loss or injury. According to the principle of indemnity, an insurance contract is signed only for getting protection against unpredicted financial losses arising due to future uncertainties. Insurance contract is not made for making profit else its sole purpose is to give compensation in case of any damage or loss. • Applicability: o When the losses suffered by the insured can be measured in terms of money o It is practicable to place the insured in the same financial position which he occupied before the loss Subrogation Transfer of rights and remedies from the insured to the insurer who has indemnified the insured in respect of the loss. Contribution It applies to all contracts of indemnity, if the insured has taken out more than one policy on the same subject matter. • For example :- Mr. X insures his property worth TK.100,000 with two insurers “Deltalife Ltd.” for TK. 90,000 and "MetLife BD Ltd." for TK. 60,000. • Mr. X's actual property destroyed is worth TK. 60,000, then Mr. X can claim the full loss of TK. 60,000 either from Deltalife Ltd or MetLife BD Ltd., or he can claim TK. 36,000 from Deltalife Ltd. and TK. 24,000 from Metlife BD Ltd. Insurable Interest Insurable interest states that the person getting insured must have insurable interest in the object of insurance. In simple words, the insured person must suffer some financial loss by the damage of the insured object. Causa Proxima … means when a loss is caused by For example :- A cargo ship's base was more than one causes, the punctured due to rats and so sea water proximate or the nearest or the entered and cargo was damaged. closest cause should be taken into consideration to decide the liability Here there are two causes for the damage of the insurer. of the cargo ship - (i) The cargo ship getting punctured because of rats, and (ii) The sea water entering ship through puncture. The risk of sea water is insured but the first cause is not. The nearest cause of damage is sea water which is insured and therefore the insurer must pay the compensation. However, in case of life insurance, the principle of Causa Proxima does not apply. Whatever may be the reason of death (whether a natural death or an unnatural death) the insurer is liable to pay the amount of insurance.