Management and Organizational Studies 2275A/B Study Guide - Subrogation, Natural Disaster, Insurance Broker

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 2275A/B
• Professor: Frederick King

Document Summary

An insurance policy is a contract by the terms of the contract, the parties agree to what kind of loss is covered, in what amount. This means the insured is responsible for the first part of the loss and the insurer has liability for the balance. The law expects the insurer to be worldly wise and show personal judgment. A duty to disclose exists not only at the time of applying but its an ongoing duty. Insurable interest the special nature of the insurance contract also means that its validity is contingent on the insured having an insurable interest in the thing being insure. The rationale behind this rule is that allowing people to insure property they have no real interest in may lead them to intentionally destroy property in order to make an insurance claim. Indemnity the insured is not supposed to profit from the happening of the insured-against event.