An Appraisal of Insurance Policy as Measures of Validity and Enforceability if An Insurance Contract in Nigeria

Insurance policy denotes a document containing details and terms of an insurance contract between the insurer and insured. It is an instrument in writing, by which one party (insurer) in consideration of premium paid, engages to indemnify another party (insured) against a contingent loss, by making payment in compensation whenever the event insured against happens. A policy in a strict sense is a document that contains details of a contract which has been made against the insured perils for which the parties contemplate they would be liable upon occurrence. Whenever a damage or loss occurs in respect of a risk of which a policy has been taken out, the insured having paid his premium is entitled to claim for the replacement of the items lost, risk suffered, damage experienced in accordance with the terms of the policy. If there were no losses resulting in claims, the need for insurance would never arise. Interestingly, very few insured, for obvious reasons, take the trouble to read through their insurance policies and understand the various conditions, warranties, terms and exceptions of the insurance well in advance of a claim. The result is that whenever a claim arises and it is found that the particular loss is not within the scope of the policy wordings, the tendency is to blame it all on the insurance company and this is a major area of conflict between insurers and the insured. This appraisal, therefore, critically examines and evaluates insurance policy as measures of validity and enforceability between parties under an insurance contract in Nigeria.