Indemnity and insurable value, Marketing Research

Assignment Help:

Indemnity and Insurable Value : The insurance contract is in the nature of indemnity. The literal meaning of indemnity is protection against loss or making good the loss. The object of an insurance contract is to place the insured, after a loss, in the same relative position in which he would have stood had no loss occurred. In other words, an insured can-claim only that much that he has suffered (or lost). If cargo has been damaged by 10 percent of the assured value, the insured will be paid only that much amount, even though he has paid premium on the total insured value. But it must also be understood that the indemnity undertaking of the insurance company is only a "commercial" indemnity. The insurance company will place the assured in the same. "financial" position as he was before the loss. Since the insurance companies cannot undertake to reinstate or replace cargo in the event of a loss, they pay a sum of money, agreed in advance, between the insured and the insurer, called "insurable value". Insurable value is calculated with reference to the "market value" of the insured goods to which is added an agreed percentage to cover general overheads as well as to provide a margin of profit on the transaction. From this range, an indemnity in insurance does not cover either a gambling loss or a sentimental loss (if tangible loss). Consequently, over-insurance i.e., insurance more than the market value plus a certain percentage is not the principle of cargo insurance.

In practice, the amount of loss payable is based on the c.i.f. value of goods to which is added an agreed percentage. According to prevailing practice in India, maximum insurable value for export cargo is equal to c.i.f. plus 15 percent. Generally, the percentage added to c.i.f. value is ten. It is customary in the insurance business to issue "duty" policies to cover duty payable on the imported goods. In such cases, claims are payable either on the basis of actual duty paid or on the basis of the sum insured, whichever is less. Thus, the sum payable cannot exceed the actual loss of the duty amount paid by the insured. It is also implied that the sum insured in the "Duty" policy would not include any percentage to cover general overheads and the margin of profit.

 


Related Discussions:- Indemnity and insurable value

Marketing segment, How might this medical group tailor its marketing mix to...

How might this medical group tailor its marketing mix to appeal to this segment?

Selecting specific media vehicles, give the example on this... media planne...

give the example on this... media planner must compute the cost per thousand persons reached by a vehicles

Internal and external criterai of research problem, AskWhat are the interna...

AskWhat are the internal and external criteria of selecting a research problem?

Swot analysis, Integrative Research Paper & Power Point Presentation: Th...

Integrative Research Paper & Power Point Presentation: The student will select an organization for the Integrative Research Paper. The organization (possibly the student's emplo

Why export? a firm''s perspective, WHY EXPORT? A FIRM'S PERSPECTIVE : Th...

WHY EXPORT? A FIRM'S PERSPECTIVE : There are a number of factors which may motivate a firm to export. Let us discuss them in detail. i) Relative profitability: The price re

Financial guarantees, FINANCIAL GUARANTEES: Exporters require adequate fin...

FINANCIAL GUARANTEES: Exporters require adequate financial support from banks to carry out their export contracts; ECGC's guarantees protect the banks from losses on account of th

INTEGRATED BRAND PROMOTIONS, WHAT ARE THE IMPLICATIONS OF INTGRATDE BRAND P...

WHAT ARE THE IMPLICATIONS OF INTGRATDE BRAND PROMOTION FOR MEDIA

Can family decision making influence consumer behaviour, Q: How family life...

Q: How family life cycle as well as family decision making can influence consumer behaviour? Ans: Families and Family Decision Making The Family Life Cycle- Individuals

Uses or importance of marketing research to business , Uses or Importance t...

Uses or Importance to Business and Industry: 1 Decision making tool: marketing research is useful for taking marketing management decision. It provides necessary information

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd