PRINCIPLES OF INSURANCE LAW

1.0 INTRODUCTION

1.1 BUSINESS AND RISKS

Business cannot operate without incurring some risk which may result in loss. To minimize the risk, businesses insures their premises and goods.

Insurance is a means for persons and businesses to protect and compensate themselves against the risk of loss – so that in the event of loss – there would be financial compensation.

1.2 CLASSIFICATION OF INSURANCE

Insurance may be classified in several ways according to:

a.    The function they perform

b.    The main classes of business

c.    The Insurance Act 1963

By Function:

a.    Insurance of the person

b.    Insurance of the property

c.    Insurance of the liability of policy-holder, that is when the insured person becomes liable at law for the injury or death of another person or damage to the property

d.    Insurance of the rights or financial interests

By the classes of business:

1. Life Insurance
2. Marine Insurance
3. Fire Insurance
4. Accident Insurance
5. Motor Insurance
6. Aviation Insurance

By the Insurance Act

a.    Life Insurance

b.    General insurance