Insurance Case Study

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Insurance is an important feature of commercial and domestic life. A promise made by insurer that ‘we will insure you against loss, damage or liability’ means that if, as a defined event, the insured suffers any of those consequences, the insurer has an obligation compensate the insured in accordance with the terms of the contract. For the promise to be made good, the insured must first suffer a loss or damage from an insured peril and then lodge a claim. If the claim is accepted it will be settled and in the process the insured will sign a release that will bring the matter to an end.

Issue
In present case, Adam entered into an insurance contract with TWI Insurance to cover its building as well as the equipment of the premises. Usually when entering into a contractual agreement, both parties should agree on the terms and conditions. When signing the contract Adam disclosed the information about the business is that they do assembling of machinery and their relevant production without answering the critical information he enters into the contract. After couple of months Adam changed his business nature to Packaging Construction Explosives without informing the Insurance Co. Soon after that, one day both the building and its contents are destroyed by fire. Insurance investigators discover that the fire resulted from …show more content…

This common law position has been extensively modified by the Insurance Contracts Act 1984(Cth). In insurable interest has removed the requirement that an insured hold an insurable interest before being entitled to benefit. An insured will have an insurable interest if they suffer a pecuniary or economic loss as a result of the property which is the subject-matter of the contract being damaged or destroyed, and there is a current policy covering the

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