Despite this contract essentially staying the same during this time, our clients still do not regard it as a contract! “I paid my premium, pay my claim!” is a comment easily bandied about. The questions that needs some further discussion are: 1.) What is a Contract? 2.) Does a Policy qualify as one?
What is a Contract?
A contract is legally enforceable if the following happens:
- Agreement – People agree on the contents
- Capacity – You must be legally able to sign
- Legality – May not be against the Laws of the Country
- Consideration – The value given in return for a promise
Does a Policy qualify as one?
- Agreement – Offer and Acceptance - The insured offer a premium, Insurer accept the premium.
- Capacity – The insured must be of legal age etc., Insurer has to be a registered insurer.
- Legality – Insured may not insure stolen goods and the policy wordings clearly state that the Laws of Namibia will determine how the policy responds.
- Consideration – The policy schedule clearly stipulate the value that the Insurer promises to pay.
It is interesting to note that the contract are active when the Insurer accepts the premium offered by the Insured and not before! It is therefore clear that the Policy ticks all the necessary boxes and thus our clients need to understand that the Insurer’s promise to pay are determined by the wording.
Quanta therefore relies heavily on the able shoulders of our brokers to serve as the informants, support crew and soothsayers to all clients.