Insurance

Where a persons agrees, for consideration, to pay a certain amount on the occurrence of a specified event.

A contract (an insurance contract) whereby one person, the insurer, promises and undertakes, in exchange for consideration of a set or assessed amount of money (called a "premium"), to make a payment to either the insured or a third-party if a specified event occurs, also known as "occurences".

Usually, but not always, the event specified is a loss which occurs as a result of a certain event, such as the loss of, or damage to, a house as a result of fire, earthquake or flood.

From Couch on Insurance, 3rd Edition: "while a policy of insurance, other than life or accident insurance, is basically a contract of indemnity, not all contracts of indemnity are insurance contracts; rather, an insurance contract is one type of indemnity contract."

In Clarke v Clarke (1993) 84 BCLR 2d 98, the BC Supreme Court accepted this definition (of life or disability insurance):

"A contract by which one party undertakes, in consideration for a payment (called a premium), to secure the other against pecuniary loss, by payment of a sum of money in the event of the death or disablement of a person."

The Saskatchewan Insurance Act, a model of thoroughness (see canlii.com/sk/laws/sta/s-26/index.html), defines insurance at ¶2(1)(ff) as follows:

"... the undertaking by one person to indemnify another person against loss or liability for loss in respect of a certain risk or peril to which the object of the insurance may be exposed, or to pay a sum of money or other thing of value upon the happening of a certain event and includes life insurance."

Some of the common events that are subjects of insurance contracts are:

? death - known as "life insurance", payable on the termination or loss of life of a specified person;

? disability insurance  - payable in lump sum or in installments upon a person becoming disabled or otherwise unable to return to a certain occupation;

? liability insurance - payable in the event that the insured or a specfied third-party incurs tort or contractual liability; or

? property or insurance against loss (insurance monies payable upon loss, destruction or damage done to specified property, such as a house, vehicle or business).

.. and any number of other events; name the object and you can probably find an insurer. Piano players have been known to insure their fingers.

Insurance contracts have generated their own field of the law, insurance law.

The basics of it are that there is a heavy involvement of agents and agency law and insurers will not exceed what is within the insurance contract (called a policy) attempting always, as in any free market economy, to receive the maximum premium for the smallest risk. A recent trend is for insurers to add to the list of events not insured, called exclusions, at the time of policy renewal, and to carefully document the insured amendment thereto.

For samples of insurance statutes, see the Nova Scotia Insurance Act (Canada, at  canlii.org/ns/laws/sta/r1989c.231/20070910/whole.html) or, USA, Chapter 624 of the 2007 Florida Statutes at leg.state.fl.us/statutes.