Insurance and wager

 Insurance and wager
life, accident, fire, marine, etc. is not a wager though it is performable upon an uncertain event. It is so because; the principle of insurable interest distinguishes insurance from the wagering contract. Insurable interest is the interest what type has in the safety or preservation of the niche matter of insurance. Where insurable interest isn't contained in insurance contracts, it becomes a wagering contract and is therefore void.
The following are the points of distinction between wagering agreements and insurance contracts.
1. The parties haven't any insurable interest iii a wagering agreement. Nevertheless the holder of an insurance policy should have an insurable interest.
2. In wagering agreement, neither party has any curiosity about happening or non-happening of an event.
In a contract of insurance, both parties are thinking about the subject-matter.
3. Contracts of insurance are contracts of indemnity except life insurance contract, which really is a contingent contract. But a wagering agreement is really a conditional contract.
4. Contract of insurance derive from scientific and actuarial calculation of risks, where as wagering agreements are a chance without any scientific calculation of risk.
5. Contracts of insurance are regarded as advantageous to people and hence encouraged by the State but wagering agreements serve no useful purpose.
6. A contract of insurance is really a valid contract where as a wagering agreement is void being expressly declared by law.



Comments

Post a Comment

Popular posts from this blog

PRINCIPLE OF LOSS MINIMIZATION

PRINCIPLE OF LOSS MINIMIZATION • Under this principle it is the job of the insured to take all possible steps to minimize losing to the insured property on the happening of uncertain event. According to the Principle of Loss Minimization, insured must always try his level best to minimize the loss of his insured property, in case there is an uncertain event like a fire outbreak or blast, etc. The insured must take all possible measures and necessary steps to manage and reduce the losses in this scenario. The insured must not neglect and behave irresponsibly during such events simply because the property is insured. Hence it is just a responsibility of the insured to protect his insured property and avoid further losses. As an example:  Assume, Mr. Arvind's house is set burning as a result of a power short-circuit. In this tragic scenario, Mr. Arvind must try his level best to stop fire by all possible means, like first calling nearest fire department o
Read more

BASIC CATEGORIES OF RISK

BASIC CATEGORIES OF RISK With regards insurability, there are basically two categories of risks; 1. Speculative or dynamic risk; and 2. Pure or static risk Speculative or Dynamic Risk Speculative (dynamic) risk is a situation in which either profit OR loss is possible. Examples of speculative risks are betting on a horse race, investing in stocks/bonds and real estate. In the business level, in the daily Lesson 1  Understanding and Managing Risk  5 conduct of its affairs, every business establishment faces decisions that entail an element of risk. The decision to venture into a new market, purchase new equipments, diversify on the existing product line, expand or contract areas of operations, commit more to advertising, borrow additional capital, etc., carry risks inherent to the business. The outcome of such speculative risk is either beneficial (profitable) or loss. Speculative risk is uninsurable. Pure or Static Risk The secon
Read more

Role of insurance in Risk Management

Role of insurance in Risk Management Insurance is an invaluable risk-financing tool. Few organizations have the reserves or funds required to take on the chance themselves and pay the sum total costs following a loss. Purchasing insurance, however, isn't risk management. A comprehensive and thoughtful risk management plan is the commitment to prevent harm. Risk management also addresses many risks which are not insurable, including brand integrity, potential lack of taxexempt status for volunteer groups, public goodwill and continuing donor support. Risk Management Process Risk Management Comprises of mainly three steps (a) Risk Analysis (b) Risk Identification (c) Risk Assessment (d) Risk Planning (e) Risk Controlling Lesson 1 Understanding and Managing Risk 9 RISK ANALYSIS Risk Analysis is the method of identifying, analyzing and communicating the major risks. Risk analysis involves Once risks have alre
Read more