Definition of Insurance in Law

In Prudential Insurance Company v. IRC (1904) 2 KB 658, the essential elements of a Contract of Insurance were considered. A person undertook to pay an amount periodically until his death or reaching ______ years of age.

If the person in the case lived up to the age of 65, he would receive ______ pounds.

Channell J defined a contract of insurance as a situation where for some consideration, usually periodical payments called premiums, you secure for yourself some benefit, usually the payment of a sum of money, upon the happening of some ______.

According to Channell J, the contract of insurance should be looked at as a whole and not split up into ______ separate parts.

For the purpose of determining whether a contract comes within the definition of life insurance, Channell J emphasized considering it as a whole and not splitting it into ______ parts.

Channell J stated that in a contract of insurance, for some consideration, usually periodical payments called premiums, you secure for yourself some benefit, usually the payment of a sum of money, upon the happening of some ______.

A contract of ______ must be a contract for the payment of a sum of money, or for some corresponding benefit such as the rebuilding of a house or the repairing of a ship, to become due on the happening of an event, which event must have some amount of uncertainty about it, and must be of a character more or less adverse to the interest of the person effecting the ______.’ Held – A Contract of Insurance must have 3 elements. a) The payment of one or more payments by one party (the “Policy Holder”); b) In return, the other party (the “Insurer”) undertakes to confer some benefit, which is usually but not necessarily to pay a sum of money on the happening of an event; Lecture Notes of Mr.Chanaka de Silva - 2021 Sri Lanka Law College Page 1 of 12 c) The event must have some amount of uncertainty about it; d) The event must be one which is adverse to the interests of the policy holder (the “Insurable Interest”). However, this case does not completely address the issue in relation to the situation regarding the payment being made to a person who lives, although it was held that the aforesaid contract was in fact, a Contract of Insurance. A case decided shortly thereafter provided an answer to this issue. Gould v. Curtis (1913) 1 KB 84 The facts of this case were similar to the Prudential case. This case distinguished between two types of policies. 1) Indemnity Policies – in this type of policies one receives no more than an indemnity for the loss which one actually suffers. In such policies it is relevant to look at the prospect of loss to consider the validity of the policy. 2) Contingency Policies – in such policies, the intention is simply that the assured will receive a specific sum of money on the happening of a specified event. Life policies are generally of this type. The concept of Insurable Interest is considerably more important in Contingency Policies, as this determines who may validly take out such a policy. Department of Trade and Industry v St Christopher Motorists Association Ltd 1 WLR 99 The defendant company provided for the hire of a chauffeur if the insured was disqualified from driving. Held: Contracts of ______ are not confined to contracts for the payment of money, but may include a contract for some benefit. Templeman J referred to Prudential and said: ‘That definition, including Channell J’s careful pronouncement that there must either be the payment of a sum or some corresponding benefit, seems to me to meet the present case and particularly so Lecture Notes of Mr.Chanaka de Silva - 2021 Sri Lanka Law College Page 2 of 12 when, in substance, there seems to me to be no difference between the defendant company paying a chauffeur on the one hand and on the other hand agre...

Gould v. Curtis (1913) 1 KB 84 distinguished between two types of ______. 1) Indemnity Policies – in this type of ______ one receives no more than an indemnity for the loss which one actually suffers. In such ______ it is relevant to look at the prospect of loss to consider the validity of the policy. 2) Contingency Policies – in such ______, the intention is simply that the assured will receive a specific sum of money on the happening of a specified event. Life ______ are generally of this type. The concept of Insurable Interest is considerably more important in Contingency Policies, as this determines who may validly take out such a policy. Department of Trade and Industry v St Christopher Motorists Association Ltd 1 WLR 99 The defendant company provided for the hire of a chauffeur if the insured was disqualified from driving. Held: Contracts of insurance are not confined to contracts for the payment of money, but may include a contract for some benefit. Templeman J referred to Prudential and said: ‘That definition, including Channell J’s careful pronouncement that there must either be the payment of a sum or some corresponding benefit, seems to me to meet the present case and particularly so Lecture Notes of Mr.Chanaka de Silva - 2021 Sri Lanka Law College Page 2 of 12 when, in substance, there seems to me to be no difference between the defendant company paying a chauffeur on the one hand and on the other hand agre...

The defendant company provided for the hire of a chauffeur if the insured was disqualified from driving. Held: Contracts of insurance are not confined to contracts for the payment of money, but may include a contract for some ______. Templeman J referred to Prudential and said: ‘That definition, including Channell J’s careful pronouncement that there must either be the payment of a sum or some corresponding ______, seems to me to meet the present case and particularly so Lecture Notes of Mr.Chanaka de Silva - 2021 Sri Lanka Law College Page 2 of 12 when, in substance, there seems to me to be no difference between the defendant company paying a chauffeur on the one hand and on the other hand agre...

A contract of insurance must be a contract for the payment of a sum of money, or for some corresponding benefit such as the rebuilding of a house or the repairing of a ship, to become due on the happening of an event, which event must have some amount of uncertainty about it, and must be of a character more or less adverse to the interest of the person effecting the insurance.’ Held – A Contract of Insurance must have 3 ______. a) The payment of one or more payments by one party (the “Policy Holder”); b) In return, the other party (the “Insurer”) undertakes to confer some benefit, which is usually but not necessarily to pay a sum of money on the happening of an event; Lecture Notes of Mr.Chanaka de Silva - 2021 Sri Lanka Law College Page 1 of 12 c) The event must have some amount of uncertainty about it; d) The event must be one which is adverse to the interests of the policy holder (the “Insurable Interest”). However, this case does not completely address the issue in relation to the situation regarding the payment being made to a person who lives, although it was held that the aforesaid contract was in fact, a Contract of Insurance. A case decided shortly thereafter provided an answer to this issue.

A case decided shortly thereafter provided an answer to this issue. Gould v. Curtis (1913) 1 KB 84 The facts of this case were similar to the Prudential case. This case distinguished between two ______ of policies. 1) Indemnity Policies – in this type of policies one receives no more than an indemnity for the loss which one actually suffers. In such policies it is relevant to look at the prospect of loss to consider the validity of the policy. 2) Contingency Policies – in such policies, the intention is simply that the assured will receive a specific sum of money on the happening of a specified event. Life policies are generally of this type. The concept of Insurable Interest is considerably more important in Contingency Policies, as this determines who may validly take out such a policy. Department of Trade and Industry v St Christopher Motorists Association Ltd 1 WLR 99 The defendant company provided for the hire of a chauffeur if the insured was disqualified from driving. Held: Contracts of insurance are not confined to contracts for the payment of money, but may include a contract for some benefit. Templeman J referred to Prudential and said: ‘That definition, including Channell J’s careful pronouncement that there must either be the payment of a sum or some corresponding benefit, seems to me to meet the present case and particularly so Lecture Notes of Mr.Chanaka de Silva - 2021 Sri Lanka Law College Page 2 of 12 when, in substance, there seems to me to be no difference between the defendant company paying a chauffeur on the one hand and on the other hand agre...

Department of Trade and Industry v St Christopher Motorists Association Ltd 1 WLR 99 The defendant ______ provided for the hire of a chauffeur if the insured was disqualified from driving. Held: Contracts of insurance are not confined to contracts for the payment of money, but may include a contract for some benefit. Templeman J referred to Prudential and said: ‘That definition, including Channell J’s careful pronouncement that there must either be the payment of a sum or some corresponding benefit, seems to me to meet the present case and particularly so Lecture Notes of Mr.Chanaka de Silva - 2021 Sri Lanka Law College Page 2 of 12 when, in substance, there seems to me to be no difference between the defendant ______ paying a chauffeur on the one hand and on the other hand agre...