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Lecture Outline
Judge Nelita Jesusa A. Bacaling
College of Law
University of San Agustin
Iloilo City
This concept is based on equity so that the person suffering loss will not carry the
burden all on his own. At one point or another, the risks that are insured against
such as loss, damage, injury or liability will also be experienced by everyone
hence, everyone should also participate in minimizing the effects of the
happening of such risks to the persons experiencing the same at the moment. This
distribution in practical terms is done by contributing monetarily to a common
fund, so that the happening of these risks that results to loss damage or injury to a
certain portion of the participating public will give rise to a claim against that fund,
thereby minimizing the effects of such loss, damage or injury, instead of having no
fund from where to source any help or aid, and carrying the burden all by oneself.
5. Insurance Contract-
5.1 The definition provided by law has been subject to criticism since it seems
to exclude life Insurance which is not a contract of indemnity since the loss
of life can never be indemnified.
9. Principle of Indemnity – you will only be indemnified to the extent of your loss. In
the case of life insurance, your heirs will be indemnified but there is no limit to the
face value of the insurance policy because one cannot give any value to human
life.