A week later, a rival merchant, Lady Sephra, tried to insure The Golden Breeze as well. Mira was confused. “Why not?” she asked. “More premiums for us?”
Mr. Elian went pale. “Two hundred bolts are slightly water-stained.” Ic 01 Principles Of Insurance Objectives Contents
“Then she has no ,” Kael said. “If the ship sank, she would gain money, not lose it. That would turn insurance into gambling, not protection.” The Objective here was to prevent moral hazard and ensure insurance is used only for indemnification, not speculation. A week later, a rival merchant, Lady Sephra,
Kael turned to Mira. “First, identify the (the Objective of insurance is to protect against pure risk – the chance of loss, not gain).” “More premiums for us
“Good,” Kael said. Then he asked Mr. Elian, “Is the silk already damp? Have the rats chewed it?”
“Exactly. And if another insurer had covered part of the ship, we’d use – splitting the loss fairly between us.” The Objectives : to hold the guilty party accountable and prevent the insured from collecting multiple payments.
“Because of ,” Kael explained to Mira, “he must tell us everything. If he hides the stains, the contract is void.” They adjusted the policy to cover only the sound silk. This was the Objective : to promote fairness and transparency.