ABSTRACT
9.1 Insurance contracts come in two flavours: indemnity insurance and contingency insurance. Under an indemnity insurance contract, the insurer undertakes to compensate (“indemnify”) the assured against specified losses caused by specified perils. Under a contingency insurance contract, the insurer promises to pay money or provide some other specified benefit to the assured (or a third party) upon the occurrence of a specified event caused by a specified peril. Both types of insurance contract satisfy the broad definition of insurance. An insurance contract is a contract whereby one party (“the insurer”) undertakes for a consideration (“the premium”) to provide a monetary or other benefit to the other party (“the assured”) upon the happening of an uncertain event. 2 All marine insurance contracts are indemnity insurance contracts by definition. By section 1 of the Marine Insurance Act 1906, it is provided that “A contract of marine insurance is a contract whereby the insurer undertakes to indemnify the assured, in manner and to the extent thereby agreed, against marine losses, that is to say, the losses incident to marine adventure” (emphasis added).
