Page 52 - Misc Ebook IC 78

The Insurance Times

Q1(a) Explain the fundamental principles of
Indemnity, Subrogation and Contribution
and also how these operate in respect of
Personal Accident Insurance.

Ans. Principles of Indemnity - The policies issued under
the Personal Accident Policy are not strictly contracts
of indemnity. This is because life is precious and cannot
be compensated by money.

However on practical consideration a measure of
indemnity does come into play. When policies are issued
to employers to reimburse their employees or their
dependents on the disablement or the death of their
employees, the insured are indemnified with the exact
amount of compensation paid by them.

Majority of these policies are termed 'benefit policies'
as they are distinct from the indemnity policies. This is
because in the event of happening of an insured event a
specified sum of money is payable irrespective of the
amount of pecuniary loss actually suffered by the insured
or his dependents, which in any case cannot be

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