A contract that Indemnifies another against lost, damage, or liability arising from an unknown event.
What is Indemnify?
to make a person whole by restoring that person to the same financial position that existed before the loss.
What are the types of Risk and what are they?
Pure Risk: means that there is only a chance of loss- the loss may or may not happen-and there is no possibility of gain. Only pure risk is insurable
Speculative Risk: involves both an uncertainty of loss and of gain. Insurance does not protect individuals against losses arising out of speculative risk because these risks are undertaken voluntarily.
What is Peril?
is the immediate specific event causing loss and giving rise to risk, the cause of risk
What is Hazard?
is any factor that gives rise to a peril, three types physical, Moral, and Morale
arise from material, structural, or operation features of a risk situation
Arise from people's habits and values
arise out of human carelessness or irresponsibility.