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V. CASE STUDIES
to
1. A firm gets its goods insured against the perils of fire without informing the insurance company
about the full details of the goods stored in its godown. This led the insurance company to assess
hower degree of risk and charge lower fire insurance premium though the firm was under duty
disclose that materials stored also included petroleum products which are exposed to higher
degree of risk. After fire, the firm filed a claim which was refused by the insurance company.
Questions:
(a) Identify the principle of insurance violated by the company.
(b) Do you feel that the insurance contract is valid? Is the firm guilty of ignoring business
values.
(c) Is the insurance company justified in refusing the claim?
Answers
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answer 1...pic 1
answer 2...pic2
answer 3.....pic3
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