BUISENESS MANAGEMENT
INSURANCE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The four essential components of Insurable Interest may includes:I-There must be some property, right, interest, life, limb or potential liability capable of being insured.II-Any of these above i.e. property, right, interest etc. Must be the subject matter of Insurance.III-The insured must stand in a formal or legal relationship with the subject matter of the Insurance. Whereby he benefits from its safety, well-being or freedom from liability and would be adversely affected by its loss, damage existence of liability.IV-The relationship between the insured and the subject matter must be recognized by law.
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I & II
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II & IV
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I, II & III
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All of the above
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Explanation:
Detailed explanation-1: -Principle of Insurable Interest:-According to this principle, the insured must have an insurable interest in the subject matter of the insurance policy. Without the interest, taking an insurance policy is considered a gamble (fraudulent activity), which the law does not permit.
Detailed explanation-2: -It means that the insured must have an interest in the subject matter of the insurance. In a practical sense, this means that the insured must suffer a financial or economic loss.
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