{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

ch50

West's Business Law with Online Research Guide, 9th Edition

Info icon This preview shows pages 1–5. Sign up to view the full content.

View Full Document Right Arrow Icon
INSURANCE: TERMINOLOGY Insurance Policy: A contract in which, for a stipulated consideration, one party (the insurer , or underwriter ) agrees to compensate the other (the insured ), or the other’s heirs or assigns, for a particular, stated loss. Risk Pooling: Insurance is premised on spreading the risk of loss among a large number of people, reducing the premium that any one person must pay to afford the coverage offered. Premium: The price paid by the insured to the insurer for a policy of insurance for a specified period of time. Insurable Interest: An interest either in a person’s life or well-being or in property that is sufficiently substantial that insuring against injury to or the death of the person or against damage to the property protects against the loss of reasonably expected benefits. An insurable interest in someone’s life or health must exist at the time the policy takes effect . An insurable interest in property must exist at the time the loss occurs . Ch. 50: Insurance - No. 1 West’s Business Law (9th ed.)
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
FORMING THE INSURANCE CONTRACT Application: The insurance application is generally made a part of the contract if and when a policy issues; therefore, the applicant is bound by any false statements or misinformation in the application, which may void the policy if discovered. Effective Date: As a general rule, coverage does not begin until a policy is issued by the insurer, unless the insurer’s agent issues a binder – a temporary policy in effect from the application date until the date the policy issues or is denied. It is important to distinguish between an insurer’s authorized agent , who has the authority to bind the insurer, and a third-party broker , who does not. If the broker fails to procure a policy for the applicant, the applicant has a claim against the broker, not the insurer. An applicant who seeks coverage from an agent of the insurer is typically covered against losses that occur while the application is pending. Ch. 50: Insurance - No. 2 West’s Business Law (9th ed.)
Image of page 2
If the parties agree that the insurance will be issued at some later date, any loss sustained in the interim is not covered. Ch. 50: Insurance - No. 3 West’s Business Law (9th ed.)
Image of page 3

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
THE INSURANCE POLICY - PT. I The heart of an insurance policy is the coverage afforded, as limited by the various exclusions and exceptions in the policy.
Image of page 4
Image of page 5
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern