Scribd
Upload
78 views1 page

Understanding Insurance Basics

This document provides important notes on determining if a business qualifies as insurance. It outlines the principal object and purpose test to evaluate if assuming risk and indemnifying loss are the primary goals of the organization or just incidental to its business. The test concludes an organization is in the insurance business if risk assumption and loss coverage are its principal objectives, but not if these are just incidental and service is the main purpose. The document also mentions elements of an insurance contract and characteristics of insurance contracts.

Uploaded by

Alyza Montilla Burdeos
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
78 views1 page

Understanding Insurance Basics

This document provides important notes on determining if a business qualifies as insurance. It outlines the principal object and purpose test to evaluate if assuming risk and indemnifying loss are the primary goals of the organization or just incidental to its business. The test concludes an organization is in the insurance business if risk assumption and loss coverage are its principal objectives, but not if these are just incidental and service is the main purpose. The document also mentions elements of an insurance contract and characteristics of insurance contracts.

Uploaded by

Alyza Montilla Burdeos
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Important notes on insurance

 The “principal object and purpose test”


 Determines:
- Whether the assumption of risk and indemnification of loss are the principal object and
purpose of the organization; or
- Whether they are merely incidental to its business.
 From such determination, it concludes that:
- If these are the principal objectives, the
business is that of insurance.
- But if they are merely incidental and service is the principal purpose, then
the business is not insurance

 Elements of an insurance contract


o CCRRIM

 Characteristics and nature of insurance contracts


You might also like