Caib 1

Front 1

Risk

Back 1

Chance of financial loss to which an object of insurance is exposed.

Front 2

Speculative risk

Back 2

The chance of a financial loss or gain.

Front 3

Pure risk

Back 3

The chance of financial loss but no chance of financial gain.

Front 4

Insurance

Back 4

The undertaking by one person to indemnify another person against loss or liability for loss in respect to a certain risk or peril. Or to pay a sum of money or other thing of value upon the happening of a certain event.

Front 5

Contract

Back 5

An agreement between two or more persons which creates an obligation to do or not do a particular thing.

Front 6

Consideration

Back 6

An exchange of something of value between parties.

Front 7

Insurable interest

Back 7

One has an insurable interest in the subject matter of the insurance when they will suffer financially by a loss.

Front 8

Utmost good faith

Back 8

The law requires insurance contracts maintain a higher standard of honesty than is needed of other contracts. Applies to insured, insurer and broker.

Front 9

Indemnity

Back 9

Application of the principle of indemnity ensures people receive the actual amount of their loss, no more and no less.

Front 10

Insurance binder

Back 10

A temporary agreement in which the insurer agrees to provide certain coverages pending the issuance of a policy.

Front 11

Agency agreement

Back 11

A written agreement or contract between the insurer and brokerage which acknowledges their relationship.

Front 12

Void contract

Back 12

One which is unable in law to support the purpose for which it was intended. Such contracts are deemed to never have existed.

Front 13

Voidable contract

Back 13

A contract that may be voided at the option of the wronged party only and not the wrongdoer.

Front 14

Peril

Back 14

The cause of a loss.

Front 15

Direct loss

Back 15

Occurs when the peril insured actually attacks the object of insurance.

Front 16

Indirect loss

Back 16

Losses which arise as a consequence of a direct loss.

Front 17

Actual cash value

Back 17

New or replacement cost of the property, at the time of the loss, less depreciation

Front 18

Valued policy

Back 18

Both the insured and the insurer agree at the time the policy is issued as to the cash value of the property. In the event of a loss, the agreed amount is paid.

Front 19

Blanket coverage

Back 19

Policy which provides a single limit of insurance for all property falling within a specific class.

Front 20

Scheduled coverage

Back 20

Covered property is itemized on the policy