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Policies of insurance are of two broad types: life assurance, which insures against an event that must happen, namely, death; and liability insurance, which insures against events that may happen.
A contract of insurance may be in any form, such as by deed, in writing, or verbal. In practice such a contract is embodied in a written document called a policy, which expressly states all the terms of the contract.
Three elements are essential to an insurance contract:
(a) consideration must pass to the Insurer. This usually takes the form of periodic payments, called premiums;
(b) there must be some degree of uncertainty as to whether the event insured against will happen, or if it is bound to happen, as to when it will happen
(c) the event, if or when it happens, must be adverse to the interest of the insured...
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