The students should try to realize how the concept of insurable interest was well grasped. The property of a thing and the interest devisable from it may be very different of the first, the price is generally the measure, but my interest in a thing every benefit or advantage arising out of or depending on such thing may be considered as being comprehendedвЂќ. To be interested in the preservation of a thing is to be so circumstanced concerning it as to have benefited from its existence, prejudice from its destruction. вЂњA man is interested in a thing to whom advantage may arise or prejudice happen from the circumstances which may attend it interest does not necessarily imply a right to the whole or a part of a thing, not necessarily and exclusively that which may be the subject of privation, but then having some relation to, or concern in the subject of the insurance, which relation or concern by the happening of the perils insured against may be so affected as to produce a damage, detriment, or prejudice to the person insuring and where a man is so circumstanced with respect to matters exposed to certain risks or dangers as to have a moral certainty of advantage or benefit, but for those risks or dangers, he may be said to be interested in the safety of the thing. CRAUFURD (1806) it was said by the learned judge:

In the leading English case of LUCENA V.

Some provisions of the law are considered below вЂњWhere the assured is so situated that the happening of the event on which the insurance money is to become payable would, as a proximate cause, involve the assured in the loss or diminution of any right recognized by law or in any legal liability, there is an insurable interest in the happening of that event to the extent of the possible loss or liabilityвЂќ. Insurable interest has best been defined by Macgillivray in the following way. Present-day position, therefore, is this that insurable interest is necessary for every insurance contract. The Gaming Act, 1845 has made all contracts of gaming or wagering null and void. The Life Assurance Act, 1774 provides that no insurance shall be allowed to be made by a person for his benefit on the life of another unless the person affecting the policy of insurance shall have an insurable interest on the life of that another. The Marine Insurance Act, 1745 prohibited effecting policies of insurance on British ships or cargo without having an insurable interest. To put it the other way round, who can insure and what?Д«efore that, anybody could insure anybodyвЂ™s life or property and the business of insurance became more of gaming and wagering. In the business of insurance, the pertinent question that usually crops up into our mind is вЂњCan anybody insure anything that he sees around?вЂќ

Such persons, sometimes of their own or sometimes in the direction of the principal, are required to take such Performance Bonds or Surety Bonds when insurance companies stand as sureties or guarantors. The situation may relate to, for example, construction of buildings, roads, bridges, mills, factories, etc., or may relate to a loan agreement repayable as per certain terms and conditions.

If the performance cannot be made as per contract leading to a loss for the principal, then the principal would have a right under the contract for claiming damages or compensation for the default of the contractor or the person who is to perform, a certain obligation under the contract. These types of policies aimed at protecting those who are responsible under a contract to perform some obligations within a specified time or as per certain pre-determined standards.

Payment of the value of the goods may not be possible for the buyers because of the outbreak of war and because of the restrictions imposed on remittances abroad.ДЄlso, there is always the question of the possible insolvency of the buyer.Д®xport Credit Guarantee Scheme aims at providing cover to the exporter (insured) arising out of (a) such political risks and (b) insolvency of the buyer. The main purpose of credit insurance is to provide financial protection to such exporters arising out of nonpayment. The present-day international trade is mainly transacted on credit basis and exporters can sustain heavy losses because of the possible insolvency of the buyers of such goods or because of protracted default in payment on the part of buyers.

Government Bonds, for trustees, customs, and excite people.

Court Bonds, for administrators, receivers, and other appointments.

Four types of guarantees are in use depending on the class of employees, viz., Commercial Guarantees, for persons other than below

Interest and principal definition