BUISENESS MANAGEMENT
INSURANCE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Allan Walker insured his ship and cargo against accident or risk on water. Luckily for him, his ship and goods arrived safely within the time period indicated in the insurance policy. What will happen to the premium he has paid to the insurance company?
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All the premium will be returned to Walker
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Half of the premium will be returned to Walker
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The premium stays with the insurance company
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Walker will be compensated even though he suffered no loss/damage
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Explanation:
Detailed explanation-1: -The insured is the party who gets his life or property insured against risks. He gets his losses made good by the insurer. The insurer agrees to compensate the insured in consideration of a sum of money. This is called the ‘premium’.
Detailed explanation-2: -Definition: Premium is an amount paid periodically to the insurer by the insured for covering his risk.
Detailed explanation-3: -The insurer has the right to make payment to the insured relating to any claim to a series of a claim falling under this policy. After which the insurer can relinquish its conduct and control of the defence of the claim and should not be held liable for anything in connection with such claims.
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