Principle of Proximate Cause The principle of proximate cause is one of the fundamental principles of insurance and plays a vital role in determining whether an insurer is liable to pay a claim. In insurance contracts, losses do not occur in isolation; rather, they are usually the result of a chain of events. The principle … Read more
Principle of Contribution The principle of contribution is one of the fundamental principles of insurance, particularly applicable to general insurance contracts such as fire insurance, marine insurance, and motor insurance. It plays a crucial role in ensuring fairness among insurers and preventing the insured from gaining unjust benefit from multiple insurance policies covering the same … Read more
Principle of Indemnity Introduction Insurance plays a vital role in modern society by providing financial protection against unforeseen risks and losses. To ensure fairness, transparency, and proper functioning of insurance contracts, certain fundamental principles govern insurance operations. One of the most important among these is the Principle of Indemnity. This principle forms the foundation of … Read more
The principle of insurable interest is one of the most fundamental principles of insurance and forms the legal and moral foundation of every valid insurance contract. Without insurable interest, an insurance contract becomes a mere gambling agreement, which is not allowed by law. This principle ensures that insurance serves its true purpose—protection against financial loss—rather … Read more
The Principle of Utmost Good Faith, also known by its Latin term uberrimae fidei, is one of the most fundamental principles of insurance. It requires that both parties to an insurance contract—the insurer and the insured—act honestly and disclose all material facts that may influence the formation and execution of the contract. Unlike ordinary commercial … Read more
Insurance Insurance is a contractual arrangement in which one party (the insurer) agrees to compensate another party (the insured) for financial losses arising from specified risks, in exchange for a premium. To ensure fairness, legality, and smooth functioning of insurance contracts, certain fundamental rules known as the principles of insurance must be followed. These principles … Read more