Indemnity Flashcards
Define indemnity
Basic of insurance contract
Controlling principle in insurance law
Place someone in same position as if loss never occurred
Cannot profit from loss
Insurer indemnified against specified insured events. Insurer assumes burden
Murphy v Wexford council 1921
Indemnity
Not enrich aggravated party or impoverish, but leave in same position as before
Legal basis common law
Castilian v Preston 1883
Legal basis statute
Marine insurance act s1
Application
Policies with agreed value of subject
Has limits of indemnity/aún insured
Does not apply to life policy
Sum insured
Max figure not necessarily sum received
Only real and actual value of goods recovered
Methods of indemnity
Reinstatement
Cost of replacement
Mv
Reinstatement cost
Rebuild/repair
Deterrent of intentional destroying
Use murphy v Wexford test
Murphy v Wexford
Ordinary man
Would he for any reason that would appeal to an ordinary man in his position, rebuild or keep money
Cost of equivalent replacement
Provides exactly what was lost
Market value
Damage beyond economic repair
MV-What it would cost to replace on day of loss
St. Albans investment co. V sun alliance and London ins.ltd 1983
Limits to indemnity
Sum insured
Excess/deductible
Average
