Ic 01 Principles Of Insurance Objectives Contents -

Kael shook his head. “Does Lady Sephra own the silk? Does she owe money on the ship?”

“No,” Mira realized.

She was ready. The principles weren’t a puzzle to solve. They were a promise to keep. Ic 01 Principles Of Insurance Objectives Contents

“So the responsible party pays, not us?” Mira asked.

Kael turned to Mira. “First, identify the (the Objective of insurance is to protect against pure risk – the chance of loss, not gain).” Kael shook his head

“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.

That very week, a silk merchant, Mr. Elian, rushed in. His ship, The Golden Breeze , was due to carry 1,000 bolts of silk across the Serpent Sea. “Insure it!” he begged. She was ready

Mira nodded. “The ship might sink, or pirates might strike.”

A month later, investigators found that a reckless harbor pilot had rammed The Golden Breeze . Kael smiled grimly. “Now for ,” he told Mira. “We pay Mr. Elian today. But tomorrow, we step into his shoes and sue that harbor pilot for the 10,000 gold.”