Question

Mr. Kartik owns a commercial property and has multiple insurance policies that cover the same risk of fire damage. Unfortunately, a fire breaks out due to the negligence of one of his employees, resulting in substantial damage to the property.

1. Will Mr. Kartik be able to claim the insurance? Why?
2. Identify the applicable insurance principle.

Answer 1

1. Mr. Kartik will be able to make an insurance claim. The principle of contribution applies in this case since Mr. Kartik has several insurance policies that cover the same risk. Mr. Kartik will be entitled to reimbursement from each of the participating insurers, and each will make a proportionate contribution to the settlement of the claim.
2. Contribution is the principle of insurance.