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The main function of marine insurance is to compansate the 'insured' for loss or damage caused by the risk insured against. In many case the 'compansation' by the insurers takes the form of 'indemnity'. What do you understand - Essay Example

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Compensation takes the form of indemnity. Indemnity is a principle derived from common law, and it is well illustrated in this paper using case law. This paper…
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The main function of marine insurance is to compansate the insured for loss or damage caused by the risk insured against. In many case the compansation by the insurers takes the form of indemnity. What do you understand
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Extract of sample "The main function of marine insurance is to compansate the 'insured' for loss or damage caused by the risk insured against. In many case the 'compansation' by the insurers takes the form of 'indemnity'. What do you understand"

Download file to see previous pages 658 Page 663 defined a contract of insurance as “a contract of insurance then must be a contract for the payment of a sum of money or some corresponding benefit such as the rebuilding of a house, or the repairing of a ship, to become due on the happening of an event which event must have some amount of uncertainty about it and must be of a character more or less adverse to the interest of the person effecting the insurance. … it must be a contract whereby for some consideration usually but not necessarily for periodical payment called premiums you secure to yourself some benefit usually but not necessarily the payment of a sum of money upon the happening of some event.”
Consequently, from the definition, requirements for existence of a valid insurance contract are clear. There must be insured, who pays premium to the insurer, to underwrite a risk, that has some amount of uncertainty, and which is beyond the control of either party. The insured is the person who takes the insurance i.e. pays the premium. He must have some insurable interest in the subject matter. With regards to marine insurance, Section 5(1) of the Marine Insurance Act of U.K, every person has an insurable interest who is interested in a marine adventure. German rules define insurable interest as any monetary interest of a person in the safe completion of a marine adventure by ship or cargo. They state that the interest could be in the vessel, the goods carried, the profit and commission dependent on the safe arrival at the destination of cargo (expected profit), the charter hire, passage money and any other claims secured on the property at stake in a marine adventure. Consequently, any person with any of the above interest can insure.
With regards to risks, it is a state in which there is an opportunity of an adverse deviation from a desired outcome. Risk is measured by the probability of loss in that the person hopes that loss will not occur. It is classified as either ...Download file to see next pagesRead More
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