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WAEC Commerce 2014 Question 12

Question 12

Insurance

An insurance principle which prevents an insured from making profit when compensated is known as

  1. A.proximate cause.
  2. B.indemnity.
  3. C.insurable interest.
  4. D.utmost good faith.
Show the answer and explanation

Answer: B (indemnity.)

Explanation

Indemnity restores the insured to his position before the loss, so he cannot profit.