Insurance Law
Insurance Law
Insurance is a contract that involves the insured party making payments to the insurer in exchange for understanding that the insurer will transfer goods or make payments to the insured or a beneficiary in the occasion of damage to property or injury. Most people spend millions of dollars on insurance for their private lives, autos, and homes, among others. The government similarly allocates huge sums of money to social insurance. Thus, insurance can be seen in the context of business. This paper will define several fundamental concepts in insurance, examine issues to do with an insurance contract, analyze the available types of insurance, among several other matters in the sector.
According to Barkacs et al. (2015), the insured party is an entity or a person that makes payment, also known as the premium, in exchange for a later payment in the event in case of damage or injury to that entity, person or property. The insurer, also known as the underwriter, receives payments from the insured party. The insurer also pays the proceeds to the entity or the beneficiary in an event of either damage or injury. The insured and the insurer express their agreement in a document called a policy.
Risk
A risk is an imperative element of the insurance agreement. A risk is a potential for loss. Risks in society are managed differently. This could be through transferring them or distributing them. Through insurance, a risk is transformed. The insurance company then distributes that risk to among large groups of people who share that risk. This helps save a party from bearing the brunt of a single loss alone (Levin, 2008).
Insurance contract
The concepts of any contract, such as offer, acceptance and consideration do apply in insurance too. Thus, the insurance will determine the risk and make a choice on whether to accept an offer. Thus, applicants are not to withhold any information regarding the nature of risk they are seeking insurance for. Otherwise, the insurance has the power to void that contract if misleading information was given. An insurance company is deemed to have accepted the insurance agreement when it communicates to the insured party that it has agreed to manage that risk. This then marks the effective date of the policy. It should be noted that the effective date of the policy is extremely crucial.
Canceling an Insurance Policy
Parties to an insurance contract have obligations to meet. There are several obligations that both the insurer and insured have to meet. Firstly the insurer has a duty to defend the insured. Here, the insurer is obligated to defend the insured from claims that the insured themselves liable. If the insurer fails to secondly the insurer has a duty to disclose information. As earlier seen; if the insured gives misleading information, then, that will be in breach of the contract. Finally, the insured has a duty to cooperate with the insurer.
Insurers Defense for non-Payment
The insurer can fail to pay the insured due to several reasons. Firstly, the failure to provide or co-operate with the insurer can make the insurer fail to honor a particular claim. Thus, the insured is supposed to give the right information. Also, if the insured did not have the insured interest, then the insurer is not obligated to settle any claims. Again, at times, illegal activities orchestrated by the insured to warrant comparison shall lead to non-payment by the insurer. These include activities such as arson or deliberate damage to property or even self.
Types of insurance available to customers
If the insured party purchases the policy, then that is referred to as individual insurance. However, if the purchaser of that policy is not the insured, the injured or the insurer, (e.g., an employer), then, that becomes a group insurance. Personal insurance is that which covers an individual’s life or health. If the cover caters for some business risk, then that insurance is referred to as commercial insurance. Further, this insurance can be divided into two broad categories: property and casualty insurance. Property insurance covers the property from risks such as fire, theft, etc. Casualty insurance covers individuals or property from accidental injury. Good examples of casualty insurance include employee compensation, health, machine and automobile insurance.
Practical side of insurance law system
The practices of insurance law differ significantly depending on the country and already existing general legislation. To be precise let us use the example relating to Canada. As this country has law system developed enough to provide maximum benefits to insured citizens and customers (Lee, 2011).
The Canadian governmental institutions offered the Personal Injury Litigation module for the purpose of addressing the need of customer for more practical tools for assisting. This system is designed to help them draft documents as quickly as possible and provide law protection in different cases. Besides the legal innovation expected from the practical law, the launch of the Personal Injury Litigation also includes Model document on Injury Damages Calculator. With this document, lawyers can have access to the curate collection of the court and other related documents. (Connel, 2014, p. 41).
Conclusion
The insurance law may be defined as a system of normative acts aimed at protection of the insurance company rights and its clients. It limits risks of both sides of the insurance contract. Almost all of the insurance companies establish their law departments to protect their insurance. The insurance law has its purposes and functions which are similar to the objectives of insurance and other law systems as well. The system of practical implementation of the insurance law has its particular features. The demand for insurance law increases all over the world and establishing an effective law system is an essential for the insurance companies. The insurance law is a critical element of other types of law. It can be divided into different categories. This paper has provided a brief snapshot of the meaning of the term law insurance, but it is enough for bettering understanding. It would be fair to say that the objectives of the research are achieved.
References
Barkacs, L., Kubasek, N., Browne, M.N., Herron, D., and Dhooge, L. (2015). Dynamic Business Law: The Essentials. New York, NY: McGraw-Hill Education
Connel, M. (2014). Insurance practice in use. London: LYT.
Lee, J. (2011). Insurance Law . Chicago: CPH.
Levin, V. (2008). Specialized law practice. London: EP.
