ANALYSIS OF THE BASIC PRINCIPLES OF INSURANCE UNDER THE NIGERIAN LAW OF INSURANCE

For proper understanding of this project topic, there is need to acquaint ourselves with some basic insurance terminologies.

Risk: In insurance law, the danger or hazard of a loss of the property insured[3]. In a contract of insurance, the insurer undertakes to protect the insured from a specified loss and the insurer receives a premium for running the risk of such loss. Thus, risk must attach to a policy.

Mitigation of Loss: In the event of some mishap to the insured property, the insured must take all necessary steps to mitigate or minimize the loss, just as any prudent person would do in those circumstances. If he does not do so, the insurer can avoid the payment of loss attributable to his negligence, but it must be remembered that though the insured is bound to do his best for his insurer, he is nor bound to do so at the risk of his life. Insure: To make sure or secure, to guarantee, as to insure safety to anyone. It also mean to indemnify a person against pecuniary loss from specified perils or possible liability4.

Insured: The insured is the policy-holder who is entitled to indemnity or monetary compensation on the happening of an event insured against. The insured is also the person who obtains or is otherwise covered by insurance on his health, life or property[4].

Insurer: He is the party who undertakes in consideration of an amount paid to him by the insured (premium) to pay money to the insured or assured on the happening of a stated event. Examples of the kinds of insurers we have include, the Mutual Insurance Association, NICON Insurance Companies Limited, among other[5].

Third Party: There are two parties to an insurance contract, the insurer and the insured. All others are strangers to the contract, and are referred to as third parties because they are not parties to the insurance contract between the insured and the insurer. For instance, the pedestrian who is knocked down by the insured in a motor accident is a third party and a stranger to the contract between the insurer and the insured[6].

Insurance Company: A corporation or association whose business is to make contracts of insurance[7].It must also be registered under the Nigerian Law.

1.8.0    CONCLUSION

Insurance is fast becoming a household name in Nigeria with more persons gradually becoming interested in the subject.

This chapter began with the general introduction which breakdown the issue in question and tried to see it's important or usefulness in helping us to understand the meaning of insurance and also satisfy our curiosity of knowing what insurance and the basic principles of insurance is all about.

Though brief, the introduction has tried to shed light on the importance of insurance to our human race or existence and definition in place by judicial decisis. It went ahead to states its aims and objectives of the study. It continued with scope of study, focus of study and followed by the research methodology which had been stated that is the sources from which information concerning the project is gotten. The literature review is not leftout. Also, the research continued with certain terms that the reader would be coming across in the course of this work. This chapter in its little way is a form of a steppingstone as to what should be expected in the research work in subsequent chapters.

[7] Black's Law Dictionary,p. 804