Insurance as Peculiar Specie of the Law of Contract

Insurance as Peculiar Specie of the Law of Contract

Chapter One of Insurance as Peculiar Specie of the Law of Contract

INTRODUCTION

Insurance is an intricate economic and social device for the handling of risks to life and property. It is social in nature because it represents the various individuals for mutual benefits by combining together funds to reduce the consequence of similar risks. The purpose of Insurance cannot however be farfetched as this can easily be seen from the various definition of Insurance, Insurance Contract has been define in the case of PRUDUENTIAL INSURANCE COMPANY .V. INLAND REVENUE COMMISSIONER1 AS “a contract whereby a person called the “insured” undertakes in return for the consideration called the premium to pay another called the “assured” a sum of money or its equivalent on the happening of a specified event. But simply put, Insurance is the placing back of a person who has suffered a loss in the same position he was before loss occurred. Its aims to eradicate the consequence of a loss by not allowing the victim [insured] to suffer the consequential loss.

This project work examines the basic principles of Insurance Law, these principles are numerous and they are the basis upon which an Insurance

1. 1. (1904)2 K.B. 658

Contract are based failure to adhere to any of these principles may render an Insurance Contract void, the need to understand as well as having a sound knowledge of the basic principles of Insurance Contract cannot be overemphasized.

These basic principles as would be discuss in this work include:

1. Indemnity

1. Subrogation

1. Contribution

1. Average

1. Insurable interest

1. Utmost good faith.

The aforementioned principles are the bedrock of Insurance Contract, the absence of any of which the purpose of insurance will be defected. However, as earlier stated unless one meets the requirements of all the basic principle of insurance, he will be estopped from claiming under an insurance contract.

BACKGROUND TO THE STUDY

Insurance Law arises from Maritime Contract around 1350 which has since extended into other areas and today it has covered almost all aspect transactions in the world.

But due to the high level of illiteracy in our society, many people are unaware of the Insurance policies but with the enactment of the Insurance Act No 68 of 2003, the awareness of Insurance policies was enhanced, thus more people took steps to insure their properties or life but unfortunately, much as the high percentage of them normally ends up unable to have their claims indemnified either as a result of a breach of one Insurance principle or another.

The motive for writing this work is the difficulty often encountered by many people when it comes to Insurance Contract, they are often gripped with the fear of having to combats with risk, but in reality every human being is faced with risks, personal or otherwise and the possibility of risks happening appear relevant at any moment, sometimes imminent, even though it may not happen for many years to come. This is however caused by the low awareness of the understanding of the basic principles of Insurance Contract.

However, in other to make people patronize the Insurance companies very well, there is the need to make people understands the distinctive Insurance principles and its peculiarity from Law Of Contract, these has however necessitated the writing of this project work.

OBJECTIVES OF THE STUDY

As Insurance is an intricate economic and social device for handling of risks to life and property. This work seeks to:-

1. To make seemingly difficult and intricate Insurance terminologies easy and understandable so that people can correctly appreciate what insurance is all about, use and apply them in their daily life experience.

1. To enlighten the general public about the area of Insurance which though seems insignificant yet is the basis of the Insurance Contract.

1. To explain the basic distinction between the Insurance Contract and the law of Contract by elaborating on the basic principles of Insurance Law which include indemnity, subrogation,

1. To increase the level of education of insurance education. Hence it analysis the fundamental and basic principles that Insurance Contract deals with.

1. To enlighten people about the importance of having Insurance in our ever growing dynamic world.