BBG E231 Lecture Notes - Lecture 32: Insurable Interest, Ath, Prudential Plc
Document Summary
For a contract of insurance to exist, there must be an agreement under which the insurer is legally bound to compensate the other party or pay the sum assured. This is the consideration that passes between the parties to support the transaction. It is asserted that premium is the consideration which the insurers receive from the insured in exchange for their undertaking to pay the sum assured in the event insured against. Any consideration sufficient to support a simple contract may constitute a premium in a contract of insurance. The insurance contract is aleatory or contingent or speculative as it deals with uncertain future events. For an event to be insurable it must be characterized by some uncertainty. In the words of channel j in prudential assurance co. ltd vs inland. Revenue commissioner then the next thing that is necessary is that the event should be one which involves some amount of uncertainty.
