INSURANCE
COMMON INSURANCE TERMINOLOGIES
Concealment: This is the willful act of holding back information that may be pertinent to the issuance of an insurance policy even though the insured was not asked about that particular subject. Disclosure: Insurer needs information from the proposer to…
DETAILED EXPLANATION OF REINSURANCE
MEANING OF REINSURANCE This refers to an arrangement whereby an insurer, having accepted risk beyond his financial capacity, cedes part of the risk to another insurer. There are two parties involved in reinsurance: the ceding company and reinsurer. The ceding…
DETAILED EXPLANATION OF LIFE ASSURANCE
Life assurance deals with insurance of human life either in death, retirement, disability, etc. It has to do with situations that will definitely happen but when and how it will happen is not known. That is why in life, the…
BUSINESS INTERRUPTION AND LIABILITY INSURANCE
BUSINESS INTERRUPTION INSURANCE This type of insurance is designed to indemnify an organisation for the loss of revenue which may be caused by the following activities: Fire and special perils. Engineering breakdown risk. Computer damage and breakdown risks. This kind…
AVIATION AND ENGINEERING INSURANCE
AVIATION INSURANCE This is connected with various types of aircraft: airplane, gliders, helicopters, jet, etc. Aviation insurance insures all aviation risks, varying from component to complete jumbo jets purchased by: Large commercial airlines. Corporate or business aircraft owner e.g. NNPC.…
CREDIT, BURGLARY AND MARINE INSURANCE
CREDIT INSURANCE Credit is a system of buying and selling without immediate payment being made. It is a system whereby the buyer receives goods or accepts services in return for his promise that payment will be made on or before…
MONEY AND FIDELITY GUARANTEE INSURANCE
MONEY INSURANCE The term ‘money’ here means cash, bank and currency notes, cheques, postal and money orders, e.t.c all belonging to the insured or any principal or employee of the insured while deposited with the insured. This policy cover pays…
FIRE AND THEFT INSURANCE
FIRE INSURANCE Fire insurance is an essential class of insurance to aid the growth of stability of manufacturing industry and other businesses in Nigeria. Since the effect of a single fire incident can create a multi-dimensional effect, there is need…
MOTOR INSURANCE AND ECOWAS BROWN CARD SCHEME
NATURE OF MOTOR INSURANCE In the early days, there was nothing like vehicle but people still moved from one point to another.The technological development which introduced the use of motor vehicle also brought about some risks involved in its use.…
INSURANCE CLAIM
The contract of insurance is the kind of contract whereby the insurer promises the insured to provide indemnification in return of premium in the event of loss. The insurer pays the insured some amount of money in form of a…
NATURE AND STRUCTURE OF INSURANCE DOCUMENT
The various types of documents used in insurance business are: The Proposal form. The cover notes. The insurance certificate. Policy document. THE PROPOSAL FORM This is a questionnaire designed by the insurer to the proposer to complete in compliance…
CONTRIBUTION
This is another corollary of the principle of indemnity. It ensures the payment of exact financial compensation to the insured by discouraging the insured from obtaining compensation from more than one source. It is applicable in a situation involving more…
INDEMNITY
The principle of indemnity regulates the financial compensation to be made to the insured by the insurer following the loss experienced by the insured. This principle exposes what amount would an insured be entitled to in the event of claim.…
INSURANCE ASSOCIATIONS IN NIGERIA
Insurance industry in Nigeria cannot exist in isolation. It has to exist within the framework of the economy, and there is need for regulation of the practice of insurance in any economy. The objective of insurance associations in Nigeria is…
INSURANCE MARKET
The market is a place of business interaction between producers, sellers and consumers for the exchange of goods and services. It takes the form of shop , office, street market, etc. Insurance market refers to the facilities that are available…
INSURANCE RENEWAL
The continuous existence of an insurance policy is subject to renewal, depending upon the duration of the policy. In most types of policies, the insurance is expressly stipulated to be for a period that does not normally exceed one year.…
PROXIMATE CAUSE
There is need to state what are covered under a contract of insurance so that in the event of loss or damage, the insurer will know where he is liable and the insured will also know where he is entitled…
UTMOST GOOD FAITH
The general rule guiding most commercial contracts is the principle of caveat emptor (let the buyer beware) .Under this principle, the parties involved in the contract are expected to provide information on the state of the subject matter of the…
INSURABLE INTEREST
Insurable interest exists when an insured person derives a financial benefit or other kinds of benefit from the continuous existence of the insured object. A person has insurable interest in something when loss of or damage to that thing would…
FUNCTIONS OF INSURANCE
INTRODUCTION Risk cannot be eliminated completely. Rather it can only be minimized through provision of financial compensation to the insured that suffers the loss. This can either be individual or business organisation. For example, a man can take up educational…
INSURABLE AND UNINSURABLE RISKS
MEANING OF INSURABLE RISK Insurable risks are those risks accepted for an amount by an insurance company followed with a promise to make financial compensation available to those that experience the losses. This type of risk is the one in…
THE CONCEPT OF RISK
DEFINITION OF RISK There is no universally accepted definition of risk. It could be defined from any side or angle one is looking at it. Risk has been variously defined by different scholars. Some of these definitions are: Risk is…
HISTORICAL DEVELOPMENT OF INSURANCE
The origin of modern insurance dates back to the practice of merchants in Italy as early as the 12th century. By the 14th century, marine insurance which is the oldest form of insurance had become established in Italy. By the…
ELEMENTS AND ESSENTIAL FEATURES OF AN INSURANCE CONTRACT
ELEMENTS OF AN INSURANCE CONTRACT A contract of insurance requires the presence of the following: Offer. Acceptance. Intention to create legal obligation. Legality of the object. Capacity to contract. 1) Offer: An offer comes from the insured. It is…
DEFINITION OF INSURANCE
Insurance can be seen as a wiseman arrangement of transferring a future loss to someone else by the way of paying a peanut now. It can also be defined as the agreement whereby one party promises to pay (indemnify) another…
INTRODUCTION TO INSURANCE
Individuals and business enterprises are exposed to risks on daily basis as they carry out their daily activities. These risks, as they happen, bring about unfortunate consequences into one’s life. For example, in the recent times, we have heard of…
HAZARD
Hazard can be defined as any occurrence that can either cause or increase the likelihood of a loss. It is referred to as the definite appearance with features that can influence the severity of loss. TYPES OF HAZARD A)…
INSURANCE PREMIUM
MEANING OF UNDERWRITING This is the process by which insurers assess the proposed risk presented for insurance protections towards the acceptance of the risk or its rejection if it does not meet certain conditions. It is also to determine what…
SUBROGATION
INTRODUCTION The principle of subrogation plays an important role in the operation of insurance contract. It has been said earlier in this book that essence of insurance is to put the insured back to the position he was before a…
