ABSTRACT
Q. What is a contract of insurance? Risks, especially commercial contracts within the building industry, are generally covered by insurance in the form of a contract of insurance. Statutes are of little assistance when it comes to defining the nature of a contract of insurance; and there has been no all-embracing definition. Probably it is undesirable that there should be because definitions sometimes tend to obscure and occasionally to exclude that which ought to be included. A partial definition was given by sections 96(1) and 95 of the Insurance Companies Act 1982. Section 96(1) states that a contract of insurance includes any contract, the effecting of which includes the carrying on of insurance business by virtue of section 95. Section 95 states:
For the purposes of this Act ‘insurance business’ includes (a) the effecting and carrying out, by a person not carrying on a banking business, of contracts for fidelity bonds, performance bonds, administration bonds, bail bonds, or custom bonds or similar contracts of guarantee being contracts effected by way of business (and not merely incidentally to some other business carried on by the person effecting them) in return for the payment of one or more premiums.
