1. INSURANCE LAW
B Com HRM

2. Why insure? To safeguard against legal liability
To safeguard against loss of assets
To safeguard against actions of employees
Etc ….

3. Definition
One party (the insurer) indemnifies the other party (insured) should a specified risk occur. In return, the insured undertakes to pay the insurer a certain sum of money (the premium)

4. Types of insurance
Indemnity insurance
Non-indemnity insurance

5. Indemnity insurance
An undertaking by the insurer to compensate the insured for a specified financial loss that may or may not occur. If specified event occurs, the insured is reimbursed the acutual patrimonial loss

6. Non-indemnity insurance
An undertaking by the insurer to compensate the insured for a specific amount on the occurrence of a specified event

7. Insurance legislation
Long Term Insurance Act
Short Term Insurance Act

8. The 4 essential elements
The insurers obligation to pay a sum of money or its equivalent
The insured's obligation to pay the premium
The occurrence of an uncertain future event
An insurable interest

9. Duties
Good faith Disclosure Brokers duty to advise disclosure Notify of loss Co-operation Mitigation of damages Not to impair subrogation rights To pay the premium

10. Insurable Interest
The insured must have some kind of interest in the thing being insured
Eg: economic interest
This is what distinguishes the insurance contract from a wager or gambling

11. Good faith
The concept of ubermae fides

12. Warranties
Affirmative warranties
Promissory warranties

13. Affirmative warranties
A declaration
Eg: Age last birthday
Materiality

14. Promissory warranties
A promise or undertaking
Eg: The insured must arm the alarm system whenever leaving the property unattended
Does not have to be material

15. Under & over insurance Over insured – no benefit to insured
Under insured – insurer will apply average

16. Subrogation Places insurer in shoes of insured
Allows insurer to sue in insured’s name
Cannot benefit twice from your mishap
Requirements:
Valid & enforceable policy contract
Insurer must have indemnified insured
Insurer must have fully compensated the insured