(i) The first preamble to the first English Marine Insurance Statute of 1601 observed that by means of Insurance “it shall come to pass that loss lighteth lightly upon many rather than heavily upon few.” (ii) Insurance is a device by means of which the risks of two or more persons or firms are combined through actual or promised contributions to a fund out of which claimants are paid, (iii) Insurance is a contractual relationship which exists when one party, for a consideration. agrees to reimburse another for a loss caused by designated contingencies. The first party is called the Insurer or underwriter, the second. the insured or Policyholder; the contract is the Insurance Policy: the legal consideration is the premium; the loss of the life or property in question is the exposure and the contingency is the happening of the insured event.
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A combination insurance policy and maintenance contract, Boiler and Machinery insurance insures against losses due to the breakdown or malfunction of boilers, machinery, and equipment, including air conditioners, heating systems, and refrigeration systems. While such a loss, such as the explosion of a steam boiler, can be catastrophic, loss of income and extra expense associated with an equipment breakdown can be even more expensive for the insured. For example, if the air conditioning system in a hospital malfunctions, there will be a loss of income from patients who have to be moved, extra expense to expedite repair, and spoilage of food and pharmaceutical products. Therefore, extra expense and business interruption are often added to a boiler and machinery policy.Another benefit of boiler and machinery insurance is the inspection feature. Engineering and safety experts familiar with the specific type of insured equipment regularly inspect the policyholder’s equipment. In many jurisdictions, these inspections meet local code requirements. Additionally, the insured receives expert loss control advice. This benefit is included in the basic policy.
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A contract whereby an insurer promises to pay the insured a sum of money or some other benefit upon the happening of one or more uncertain events in exchange for the payment of a premium. There must be uncertainty as to whether the relevant event(s) may happen at all or, if they will occur (eg death) as to their timing.
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US: A contractual relationship that exists when one party (the insurer) for a consideration (the premium) agrees to reimburse another party (the insured) for loss to a specified subject (the risk) caused by designated contingencies (hazards or perils). The term “assurance,” commonly used in England, is considered synonymous with “insurance.”
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A method of risk reduction that shifts the risks of individuals to an insurance company. In exchange for consideration, known as a premium, the insurer assumes the losses the insured may suffer. To what extent the insurer assumes the losses is clearly defined in the policy contract.
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US: A system under which individuals, businesses, and other organizations or entities, in exchange for payment of a sum of money (a premium), are guaranteed compensation for losses resulting from certain perils under specified conditions.
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A transfer under which the source of funds is an Insurer. As an institution, Insurance, is a device that combines the risks of two or more insured’s through actual or promised contributions to a fund out of which claims are paid.
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UK: Conduct of Business Source book (ICOB) Rules applicable to an insurance intermediary, including an insurer, when carrying on insurance mediation for a customer in relation to a non-investment insurance contract or entering into a distance non-investment mediation contract with a retail customer. The rules also apply to insurers when acting as product providers and managing agents at Lloyd’s in relation to non-investment insurance contracts. ICOB also applies to: a firm which communicates or approves non-investment financial promotion; motor vehicle liability insurers and the Society of Lloyd’s for that type of business. ICOB does not apply to reinsurance and large risk contracts for commercial customers.
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MEDICAL,USA: Contractual relationship between a first party (insurer) and a second party (insured) in which the insurer agrees to protect against risk and reimburse the insured for financial loss caused by certain contingencies or hazards (fire, accident, illness, death) in return for payment of a monthly or annual premium.
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UK: Insurance is risk financing, risk transfer and risk combination. By combining a large number of exposure units into a group the insurer can predict the probability of loss with a reasonable degree of accuracy for the group as a whole and so spread the loss over the group. The degree of uncertainty for the group is reduced but not for an individual member. The individual transfers his risk of loss to the insurer who finances the risk in return for a premium. The insured substitutes the certainty of a premium for an unknown loss in regard to insurable risks. See CONTRACT OF INSURANCE for the legal definition.