MANAGEMENT

Detailed explanation-1: -Principle of Indemnity In other words, the insured should be compensated the amount equal to the actual loss and not the amount exceeding the loss. The purpose of the indemnity principle is to set back the insured at the same financial position as he was before the loss occurred.

Detailed explanation-2: -Insurance contracts are created solely as a means to provide protection from unexpected events, not as a means to make a profit from a loss. Therefore, the insured is protected from losses by the principle of indemnity, but through stipulations that keep him or her from being able to scam and make a profit.

Detailed explanation-3: -According to the mitigation principle, the insured must take care of his property or subject matter of insurance in the same way as he would take care without taking the insurance policy. The insured should not become careless of his property after taking the insurance policy. Was this answer helpful?

Detailed explanation-4: -The contract of indemnity is defined as, “ A contract where one party promises to save the other from the loss caused by the conduct of the promisor himself or by the conduct of any other party.” In a life insurance contract, nobody can save the life of the person. Hence, contract of indemnity does not apply here.