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Direction: Read the following text and answer the questions that follow:
Mr. Shailesh owns an oil factory in Rajasthan. Due to illness of his parents living in the UK, he had to go to UK. There he joined a job. He asked his friend Mr. Vijay Arora to take charge of his company till he returns to India. Mr. Vijay took a fire insurance policy for this factory from Sokhim Free Insurance Pvt. Ltd. A month before he got the fire insurance policy, he received a notice from electricity department to get the wiring of the company repaired. He didn’t inform the insurance company about it. He didn’t get the wiring of the factory repaired. After five months of taking the policy, the factory caught fire due to faulty wiring.
“Mr. Vijay took a fire insurance policy for this factory from Zokhim Free Insurance Pvt. Ltd....”.
Q. Which principle of insurance is relevant here?
  • a)
    Insurable interest
  • b)
    Indemnity
  • c)
    Good faith
  • d)
    Contribution
Correct answer is option 'A'. Can you explain this answer?
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Direction: Read the following text and answer the questions that foll...
Insurable interest is a type of investment that protects anything subject to a financial loss. A person or entity has an insurable interest in an item, event or action when the damage or loss of the object would cause a financial loss or other hardships.
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Direction: Read the following text and answer the questions that foll...
Principle of Insurance: Insurable Interest

Insurable interest is the principle of insurance that requires an individual to have an insurable interest in the subject matter of the insurance policy. This means that the individual must stand to suffer a financial loss if the insured event occurs. In the given scenario, Mr. Shailesh owns an oil factory in Rajasthan, and hence, he has an insurable interest in the factory.

Application of Insurable Interest Principle

Mr. Shailesh had to go to the UK due to illness of his parents, and he asked his friend Mr. Vijay Arora to take charge of his company till he returns to India. As Mr. Vijay is not the owner of the factory, he does not have an insurable interest in the factory. However, as Mr. Vijay was authorized by Mr. Shailesh to take charge of the factory, he could take a fire insurance policy for the factory on behalf of Mr. Shailesh.

Relevance of Insurable Interest Principle in the Given Scenario

The principle of insurable interest is relevant in this scenario as Mr. Vijay took a fire insurance policy for the factory from Zokhim Free Insurance Pvt. Ltd. on behalf of Mr. Shailesh. As Mr. Shailesh is the owner of the factory, he has an insurable interest in the factory. Hence, the insurance policy taken by Mr. Vijay is valid.

Importance of Disclosing Information

However, Mr. Vijay did not inform the insurance company about the notice received from the electricity department to get the wiring of the factory repaired. This is a violation of the principle of good faith, which requires the insured to disclose all material information related to the subject matter of the insurance policy. As a result, when the factory caught fire due to faulty wiring, the insurance company may deny the claim made by Mr. Shailesh, as the information about the faulty wiring was not disclosed to them.

Conclusion

In conclusion, the principle of insurable interest is relevant in the given scenario as Mr. Vijay took a fire insurance policy for Mr. Shailesh's factory on his behalf. However, the violation of the principle of good faith by not disclosing the information about the faulty wiring may lead to the denial of the insurance claim.
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Direction: Read the following text and answer the questions that follow:Mr. Shailesh owns an oil factory in Rajasthan. Due to illness of his parents living in the UK, he had to go to UK. There he joined a job. He asked his friend Mr. Vijay Arora to take charge of his company till he returns to India. Mr. Vijay took a fire insurance policy for this factory from Sokhim Free Insurance Pvt. Ltd. A month before he got the fire insurance policy, he received a notice from electricity department to get the wiring of the company repaired. He didn’t inform the insurance company about it. He didn’t get the wiring of the factory repaired. After five months of taking the policy, the factory caught fire due to faulty wiring.“He didn’t get the wiring done ...”.Q. Name the related principle not followed by Mr. Vijay Arora in the above-stated lines.

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Direction: Read the following text and answer the below questions :Best Textiles Ltd. is a big company. Managing many employees at the same moment is a challenge which this company always faces. Since the company has many departments it is necessary for the company to ensure unity of action among various departments. The various departments are human resources, marketing, finance, operations and sales. The top-level managers coordinate with all middle-level managers. The middle-level managers coordinate simultaneously with top as well as lower-level managers. The lower-level managers coordinate with middle-level managers and the workers. The employees are always concerned about the company and are a useful resource to their organisation. Though they have diverse interests and have to perform different activities, the management ensures that the efforts of the employees should be given a focus so as to achieve the organisational goals.The different departments have their own interests but due to proper coordination, conflict of interest between departments is minimized to zero. When it comes to the employees, the organisation shows its concern. The career of employees is shown a developmental path through proper training modules and job enrichment. Sanjeev is a manager who takes care of all the duties and responsibilities to be assigned to his employees in the department. He uses all sources to develop a proper communication with them and leaves no attempt to motivate them. This year the company has decided to give the best manager award to Sanjeev for his contribution to the organisation.Which importance of management has been highlighted above ?

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Direction: Read the following text and answer the questions that follow:Mr. Shailesh owns an oil factory in Rajasthan. Due to illness of his parents living in the UK, he had to go to UK. There he joined a job. He asked his friend Mr. Vijay Arora to take charge of his company till he returns to India. Mr. Vijay took a fire insurance policy for this factory from Sokhim Free Insurance Pvt. Ltd. A month before he got the fire insurance policy, he received a notice from electricity department to get the wiring of the company repaired. He didn’t inform the insurance company about it. He didn’t get the wiring of the factory repaired. After five months of taking the policy, the factory caught fire due to faulty wiring.“Mr. Vijay took a fire insurance policy for this factory from Zokhim Free Insurance Pvt. Ltd....”.Q. Which principle of insurance is relevant here?a)Insurable interestb)Indemnityc)Good faithd)ContributionCorrect answer is option 'A'. Can you explain this answer?
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Direction: Read the following text and answer the questions that follow:Mr. Shailesh owns an oil factory in Rajasthan. Due to illness of his parents living in the UK, he had to go to UK. There he joined a job. He asked his friend Mr. Vijay Arora to take charge of his company till he returns to India. Mr. Vijay took a fire insurance policy for this factory from Sokhim Free Insurance Pvt. Ltd. A month before he got the fire insurance policy, he received a notice from electricity department to get the wiring of the company repaired. He didn’t inform the insurance company about it. He didn’t get the wiring of the factory repaired. After five months of taking the policy, the factory caught fire due to faulty wiring.“Mr. Vijay took a fire insurance policy for this factory from Zokhim Free Insurance Pvt. Ltd....”.Q. Which principle of insurance is relevant here?a)Insurable interestb)Indemnityc)Good faithd)ContributionCorrect answer is option 'A'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Direction: Read the following text and answer the questions that follow:Mr. Shailesh owns an oil factory in Rajasthan. Due to illness of his parents living in the UK, he had to go to UK. There he joined a job. He asked his friend Mr. Vijay Arora to take charge of his company till he returns to India. Mr. Vijay took a fire insurance policy for this factory from Sokhim Free Insurance Pvt. Ltd. A month before he got the fire insurance policy, he received a notice from electricity department to get the wiring of the company repaired. He didn’t inform the insurance company about it. He didn’t get the wiring of the factory repaired. After five months of taking the policy, the factory caught fire due to faulty wiring.“Mr. Vijay took a fire insurance policy for this factory from Zokhim Free Insurance Pvt. Ltd....”.Q. Which principle of insurance is relevant here?a)Insurable interestb)Indemnityc)Good faithd)ContributionCorrect answer is option 'A'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Direction: Read the following text and answer the questions that follow:Mr. Shailesh owns an oil factory in Rajasthan. Due to illness of his parents living in the UK, he had to go to UK. There he joined a job. He asked his friend Mr. Vijay Arora to take charge of his company till he returns to India. Mr. Vijay took a fire insurance policy for this factory from Sokhim Free Insurance Pvt. Ltd. A month before he got the fire insurance policy, he received a notice from electricity department to get the wiring of the company repaired. He didn’t inform the insurance company about it. He didn’t get the wiring of the factory repaired. After five months of taking the policy, the factory caught fire due to faulty wiring.“Mr. Vijay took a fire insurance policy for this factory from Zokhim Free Insurance Pvt. Ltd....”.Q. Which principle of insurance is relevant here?a)Insurable interestb)Indemnityc)Good faithd)ContributionCorrect answer is option 'A'. Can you explain this answer?.
Solutions for Direction: Read the following text and answer the questions that follow:Mr. Shailesh owns an oil factory in Rajasthan. Due to illness of his parents living in the UK, he had to go to UK. There he joined a job. He asked his friend Mr. Vijay Arora to take charge of his company till he returns to India. Mr. Vijay took a fire insurance policy for this factory from Sokhim Free Insurance Pvt. Ltd. A month before he got the fire insurance policy, he received a notice from electricity department to get the wiring of the company repaired. He didn’t inform the insurance company about it. He didn’t get the wiring of the factory repaired. After five months of taking the policy, the factory caught fire due to faulty wiring.“Mr. Vijay took a fire insurance policy for this factory from Zokhim Free Insurance Pvt. Ltd....”.Q. Which principle of insurance is relevant here?a)Insurable interestb)Indemnityc)Good faithd)ContributionCorrect answer is option 'A'. Can you explain this answer? in English & in Hindi are available as part of our courses for Commerce. Download more important topics, notes, lectures and mock test series for Commerce Exam by signing up for free.
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Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of Direction: Read the following text and answer the questions that follow:Mr. Shailesh owns an oil factory in Rajasthan. Due to illness of his parents living in the UK, he had to go to UK. There he joined a job. He asked his friend Mr. Vijay Arora to take charge of his company till he returns to India. Mr. Vijay took a fire insurance policy for this factory from Sokhim Free Insurance Pvt. Ltd. A month before he got the fire insurance policy, he received a notice from electricity department to get the wiring of the company repaired. He didn’t inform the insurance company about it. He didn’t get the wiring of the factory repaired. After five months of taking the policy, the factory caught fire due to faulty wiring.“Mr. Vijay took a fire insurance policy for this factory from Zokhim Free Insurance Pvt. Ltd....”.Q. 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After five months of taking the policy, the factory caught fire due to faulty wiring.“Mr. Vijay took a fire insurance policy for this factory from Zokhim Free Insurance Pvt. Ltd....”.Q. Which principle of insurance is relevant here?a)Insurable interestb)Indemnityc)Good faithd)ContributionCorrect answer is option 'A'. Can you explain this answer? theory, EduRev gives you an ample number of questions to practice Direction: Read the following text and answer the questions that follow:Mr. Shailesh owns an oil factory in Rajasthan. Due to illness of his parents living in the UK, he had to go to UK. There he joined a job. He asked his friend Mr. Vijay Arora to take charge of his company till he returns to India. Mr. Vijay took a fire insurance policy for this factory from Sokhim Free Insurance Pvt. Ltd. A month before he got the fire insurance policy, he received a notice from electricity department to get the wiring of the company repaired. He didn’t inform the insurance company about it. He didn’t get the wiring of the factory repaired. After five months of taking the policy, the factory caught fire due to faulty wiring.“Mr. Vijay took a fire insurance policy for this factory from Zokhim Free Insurance Pvt. Ltd....”.Q. Which principle of insurance is relevant here?a)Insurable interestb)Indemnityc)Good faithd)ContributionCorrect answer is option 'A'. Can you explain this answer? tests, examples and also practice Commerce tests.
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