Looking at the concept of Insurance which revolves around companies that deals with risk. This transaction operates by the customer paying certain amount of money to the Insurance Company, that payment is known as premium. The effect of which is to guide against unforeseen accidents over the insured property and at the instance of such accident, the insurance company is obligated subject to some conditions to pay the customer back the cost of the insured property.

Thus, this type of transaction is a contract that is based on trust and is normally a contract between the insured and the insurer, this contract involves a promise by a promise by a party called insurer to another party called the insured that on the occurrence of certain specified events, the insured will be put back to the position he occupied before the occurrence of the loss.

It is worthy of note that the Contract of Insurance is basically governed by the rules which form part of the general Law of Contract, but there is equally no doubt that over the years it has attracted many principles of its own to the extent that it is perfectly proper to speak of a law of insurance. Some of these principles of Insurance Law owe their existence to the fact that the documents of the standard Insurance Contract, principally the proposal form and the policy have long been drafted in a fairly uniform way. However, very insignificant amount of people consider the importance of reading and understanding those principles of Insurance Law which include the terms and conditions of Insurance policies. Of the few who bothers to read through the basic principles only a small proportion of them actually understand them.

Similarly, people usually finds it very difficult to distinguish between the insurance law and law of contract, the result of this is that when a claim arises and it is found that the particular loss is not covered by the terms of the Insurance or Insurance Contract, there is always the tendency to blame it all on the insurance company. There might however be some „black sheep‟ amongst the insurer but a lot of the unpleasantness is due to a lack of understanding of the basic principles of insurance law and knowing the difference between insurance law and law of contract.

Thus, this study seeks to elaborate the terms and principles of Insurance Law, Law of Contract and also to discuss the basic features of Insurance Law as distinct from that of Law of Contract.





Insurance Law arises from Maritime Contract around 1350 which has since extended into other areas and today it has covered almost all aspect transactions in the world.

But due to the high level of illiteracy in our society, many people are unaware of the Insurance policies but with the enactment of the Insurance Act No 68 of 2003, the awareness of Insurance policies was enhanced, thus more people took steps to insure their properties or life but unfortunately, much as the high percentage of them normally ends up unable to have their claims indemnified either as a result of a breach of one Insurance principle or another.

The motive for writing this work is the difficulty often encountered by many people when it comes to Insurance Contract, they are often gripped with the fear of having to combats with risk, but in reality every human being is faced with risks, personal or otherwise and the possibility of risks happening appear relevant at any moment, sometimes imminent, even though it may not happen for many years to come. This is however caused by the low awareness of the understanding of the basic principles of Insurance Contract.

However, in other to make people patronize the Insurance companies very well, there is the need to make people understands the distinctive Insurance Principles and its peculiarity from Law Of Contract, these has however necessitated the writing of this project work.


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