Insurance concerns the transfer and distribution of risk.

It is an arrangement under which an insurer contracts to do something that is of value to an insured upon occurrence of a specified harmful contingency.

Indemnity Insurance

In contracts of indemnity insurance the insured is entitled to recover the actual commercial value of what he has lost through the happening of the event insured against. Indemnity insurance includes all insurance against damage to property, such as fire, motor vehicle, theft, public liability etc.

Non-Indemnity Insurance

In contracts of non indemnity insurance, the sum which the insured is entitled to receive from the insurer does not necessarily bear any relation to the accrual loss, if any, suffered by the insured. Contracts of life, personal accident, and sickness insurance are examples.

Fraudulent Claims

Most policies contain a clause entitling the insurer to avoid liability on the ground of the fraudulent claim. If for instance, the insured vastly pretends his goods has been destroyed by fire, or supports his claim with false evidence his conduct is fraudulent.

The fact that a claim is grater or higher than the amount to which the insured may be really entitled, affords no evidence of fraud, although an exceptional overestimate coupled with other circumstances, for example where the excessive claim has been designedly made, may well justify the conclusion that it has been done with the object of defrauding.

Legal Proceedings

The Insurance Act provides that the owner of a domestic policy issued after 1 January 1924 is, despite any contrary provision in his policy or in any agreement relating thereto, entitled to enforce his rights under the policy against the insurer concerned in any court of competent jurisdiction in the Republic.