• 1 Marks

BL – Nov 2011 – L1 – SA – Q1 – Law of Contract

Identify the party in a contract of insurance that pays the premium for indemnity.

In a contract of insurance, the party that pays the premium in return for the insurer’s promise of indemnity is the:
A. Insurance company
B. Insurer
C. Contractor
D. Insured
E. Third party

D. Insured

Explanation:
In a contract of insurance, the insured is the party that pays the premium to the insurance company (the insurer) in exchange for the promise of indemnity or protection against a specified risk. The insurer provides coverage, but it is the insured who pays the premium to receive the coverage.

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