#5 Notes about “Risk Management” course

Hi all, I continue watching the “Risk Management” course provided by theAlison platform. And here are main items from the Module #4 that I think are worth sharing with you:

  1. Offer and acceptance denotes the process of reaching the agreement between agent and insured. In this case byuer initiates the offer and agent accepts it (this acceptance is called binder);
  2. Consideration — negotiated price;
  3. Competent parties: Parties should be competent;
  4. Legal purpose: The contract should not include any agreement on the action prohibited by law;
  5. Legal Form: contract should be aligned with the specific legal form;
  6. Utmost Good Faith — insureds were not lying or closing some information provided to underwriter;
  7. Contracts of adhesion — buyers have no input in the policy’s term, they can just accept it or not. In the court the prevalence is on the side of insured, how he understands the policy terms;
  8. Indemnity concept — insurer agreed to pay for exactly actual loss of the insured. The idea is to restore the economic position of the insured after the risk exposure;
  9. Insurable interest means that the insured has financial interest in the subject to loss (e.g. ownership). However for property insurance the compensation can be gained only if the interest existing at the time of the loss;
  10. Subrogation is the right of the insurer to claim other companies who might be guilty for the risk exposure;
  11. Actual Cash Value — is the market price for the subject to insurance;

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