Risk, Insurance Cover & Claims

19/07/2021

INSURABLE INTEREST CONTD

SUBJECT MATTER OF INSURANCE
The subject matter is the item or event insured against in the event of a loss or liability. It is also the financial interest a person has in the subject matter of insurance.

THE LEGAL RELATIONSHIP
The law must be able to recognise the relationship between the insured and the subject matter of insurance. A good example of a legal relationship is 'Ownership'. A thief can not claim insurable interest on stolen property. A good neighbour cannot have an insurable interest in his neighbour's life.

FINANCIAL VALUATION
There are contracts that border on performance and obligations. Insurance contracts depend on the financial valuation of that contract.

In all classes of insurance except for marine insurance where it is sufficient to admit a reasonable expectation of such interest, insurable interest must exist before the contract of insurance can take effect. Any general non-marine insurance effected before establishing an insurable interest, it is rendered null and void from the beginning.

19/07/2021

INSURABLE INTEREST

For a valid contract in insurance to exist, there must be an insurable interest.

The insurable interest is the right of an individual or a legal entity to insure the subject matter of that insurance as a result of a financial relationship recognised at law.

Every insurance contract must be backed by an insurable interest to reduce moral hazards and also be able to value the financial loss of the insured.

CONSIDERATIONS FOR INSURABLE INTEREST

In applying insurable interest, the following must be put into consideration;

The subject matter of insurance,
The legal relationship,
The financial value in the event of a loss.

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07/06/2021

APPLICATION OF RISK IN INSURANCE
Insurance is a subset of risk management. Insurance basically focuses on risks that are insurable. Risks such as speculative risk, non-financial risk and some fundamental risks are not insurable.

CHARACTERISTICS OF INSURABLE RISK

Uncertainty or Fortuitous - For a risk to be insurable, there must be some measure of uncertainty. Inevitable events such as tear and wear are not insurable.

Financial Value - Insurable risks must be capable of financial valuation so that financial compensation can be made in the event of a claim.

Homogeneous Exposure - For a risk to be insurable, such risk must exist in their numbers.

Insurable Interest - The insured must have an insurable interest in the risk to be insured.

Public Policy - Insurable risk must not be against public policy.

Personalised - For a risk to be insurable, the impact and effect of such risks must be personal in nature.
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18/08/2020

RISK MANAGEMENT
Risk management simply put is the identification, analysis, and economic control of those risks which can threaten the assets or earning capacity of an enterprise.
Risk here can be categorized into three:
1. Financial and Non-financial risk
2. Pur and Speculative risk.
3. Fundamental and Particular risk.

- Financial and Non-financial risk - Any risk capable of monetary measurement. Eg House, car. etc
Non-financial risks are risks that can not be measured or valued financially. Eg choice of marriage partner, change in taste, or fashion etc
NON FINANCIAL RISKS ARE NOT INSURABLE

- Pure and Speculative risk-: Pure risk provide situation of loss or no loss. There is no provision for profit in it. Eg motor accident, fire in a workplace or home, bodily injury.
Speculative risk presents the possibility of gain or profit, loss or no loss. Eg investing in a business, buying of shares. etc
SPECULTIVE RISKS ARE NOT INSURABLE.

-Fundamental and Particular risk-: Fundamental risks are those risks that the cause of loss is outside the control of anyone. Earthquake, flood, famine, unemployment, etc
Particular risks are those risks that are more personal in their effects and cause. There are more often than not human elements in it.

While PARTICULAR RISKS ARE INSURABLE some FUNDAMENTAL RISK ARE NOT INSURABLE. Eg Famine.
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13/08/2020

We looked at the term 'RISK' in insurance last time. we will go further today on 'RISK'

PERIL AND HAZARDS
Peril simply put is the cause of loss. Examples are 'fire', 'theft' ,'bodily injury'.
Peril simply put is the cause of loss. Examples are 'fire', 'theft','bodily injury'.lso that factor that has the capacity to influence the outcome of a loss. Examples are,
> A garage or warehouse of goods without security or a fence is at a higher risk of theft. that factor that has the capacity to influence the outcome of a loss. Examples are,
> A house built around a fuel or gas station is in danger of fire.
> A garage or warehouse of goods without security or fence is in a higher risk of theft.
> A house built on a flood plain is in risk of collapse..is at a higher risk of theft.impact health, workflow or even result in death..
> A factory worker without basic safety tools can be at risk of bodily injury which may impact health, workflow or even result in death.
In the above, we find that 'flood plain','gas station' and 'insecurity' are all hazards that may cause peril to occur.
Each one of these factors has a direct or indirect impact on assets and will for sure impact premium charges and claims.

Hazards can be physical or moral. - physical hazard relates to the physical characteristics of risk such as the nature of the construction of a building, security protection of a shop or factory.
-Moral hazards relate to the human aspect which can influence the outcome of risk, such as carelessness, fraud etc
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Hi, welcome to Probity Insure Services. We are a team of insurance service intermediaries in Nigeria. At Probity, We help you measure your risk exposure and guide you on the right product mix for your business and personal insurances.

29/07/2020

In my years of experience within the insurance sector. I have seen people excited when the benefits of their insurance policies materialize. I have also seen those who felt they were robbed by the insurance company
While some are just neutral either doing it out of a forced persuasion, they end up loosing out of what would have been their benefits.
The challenge with most who were pained was either that they were not cleared with the plan they bought into or that they failed in keeping with their own terms of the contract.
Which so ever category you may belong to, when you have a proper understanding of how it works, you will buy the right policy for what you need.
visit us:

Hi, welcome to Probity Insure Services. We are a team of insurance service intermediaries in Nigeria. At Probity, We help you measure your risk exposure and guide you on the right product mix for your business and personal insurances.

29/07/2020

RISK IN INSURANCE
To most people, risk implies some form of uncertainty about an outcome in a given situation. Risk could be used to mean different situations.

A. Risk as the cause of an outcome. E.g Fire as a risk, theft as risk or personal injury as risk.
B. Risk as the likelihood of something happening. E.g Death
C. Risk as the object. E.g Your vehicle or property
D. Risk as an action. As the popular maxim " No Risk, No Venture.

In all these, we can judge that risk is an integral part of human existence.
Therefore, we can confidently say that risk is
1. The uncertainty or possibility of loss.
2. It is unpredictability. ie The tendency that actual results may differ from predicted results.
3. Risk is a combination of hazards. It is the likelihood that the hazard will cause the peril to bring the loss.

Evaluating "Risk" as it applies in insurance , we find terms such as "Hazards" and "Peril". We will look closely at these terms as it will help us in our understanding of insurance covers and claims.