Insurance Policies are "contracts of indemnification" True or false?

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Insurance Policies are "contracts of indemnification" True or false?

A contract of indemnity is basically about one party promising the other to make good his losses. These losses may arise either due to the conduct of some other party. it means that one party will compensate the other in case it suffers some losses.

For example, Party A promises to deliver certain goods to Party B for Rs. 70,000 every month. Party C promises to indemnify Party B’s losses if Party A fails to deliver the goods. This is how Party B and Party C will enter into contractual obligations of indemnity.

Truly, A contract of insurance is very similar to indemnity contracts. Here, the insurer (Party C) promises to compensate the insured (Party B) for his losses. In return, he (Party C) receives consideration in the form of premium. However, the Contract Act does not strictly govern these kinds of Insurance transactions because the Insurance Act and other such laws contain specific provisions for the insurance contracts.

ekkarill92 answered 1 year ago

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