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GENERAL PRINCIPLES OF INSURANCE LAW Apart from the principles governing all contracts insurance is also governed by its own unique principles. INDEMNITY · Is perhaps the most fundamental principle of insurance law. Object of indemnity is to place the insured after the loss in the same position he occupied immediately before the loss. He is not to be placed in a better or worse position. · Not all insurance contracts are contracts of indemnity e.g. life insurance. Indemnity is important as it deals in part with moral hazard. · Indemnity does not imply that the insured will be indemnified to the full value of his loss e.g. a person whose factory is destroyed by fire cannot recover for loss of profits or against any liability that may arise from the fire unless he has appropriate policies in place specifically designed to deal with these losses. · Indemnity can be achieved through the following methods: 1. Cash 2. Reinstatement e

Notes on the Law of Insurance Lecturer: A.Fungo Definition: A contract of Insurance is a contract whereby one party undertakes, in return for a consideration paid by the other, to pay a sum of money or provide some equivalent benefit to the other if a specified event should happen or when such an event should happen or to make payments to the other until such an event should happen. Essence. The essence of the arrangement being that it is either uncertain whether or uncertain when the event will occur. The contract is commonly known as a “policy”. The parties are called respectively “ the insurer or underwriter and the insured or assured or policy holder. Categories of Insurance contracts: There are two categories: 1. Indemnity 2. Contingency In indemnity insurance the undertaking is to provide the insured with an indemnity against a possible future loss or liability e.g. damage to property caused by fire or a motorist liability in tort to a third party who may be injured by his

THE INSTITUTE OF FINANCE MANAGEMENT COURSE OUTLINE LAW OF INSURANCE (For Undergraduate students) Course aims The primary purpose of the full unit course is to enable students to develop detailed knowledge of the techniques and legal context of the law governing insurance. No previous knowledge of the law is required; however acquired knowledge on contract law may be important to certain aspects. The outline is mainly based on various pieces of legislation, and common law doctrines. Instruction is predominantly by way of lectures and seminars and the class is expected to be interactive. Course Objectives A participant who successfully completed this unit should: a. Have a sound knowledge of the principles of insurance law b. Know the nature of the insurance contract c. Differentiate insurance contract from other types of contract. d. Have the knowledge and understanding of the system within which these laws operate e. Be able to apply knowledge and skills to simple situat