Chapter GIM1040

CourtHM Revenue & Customs
Published date15 April 2016
Record NumberGIM1040

The ‘Prudential’ definition of insurance (GIM1030) remains the starting point for a discussion of the legal basis of insurance. For example, Chitty on Contracts (paragraph 39-001 28th edition) summarises a contract of insurance as follows:

‘A contract of insurance is one whereby one party (the insurer) undertakes for a consideration to pay money or provide a corresponding benefit to or for the benefit of the other party (the assured) upon the happening of an event which is uncertain, either as to whether it has or will occur at all, or as to the time of its occurrence, where the object of the assured is to provide against loss or to compensate for prejudice caused by the event, or for his old age (where that event is the reaching of a certain age by the assured) or for the benefit of others upon his death. It is these objectives which distinguish insurance from gaming or wagering.’

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