Contingency Insurance
TEE man in the street is aware that he can insure against Fire, Burglary, Sickness, Accident and other usual risks appertaining to life and property, but comparatively few people are aware of the meaning of Contingency Insurance and what it embraces. It is somewhat dikenit for an expert to define its limits, as practically they do not exist, but in broad terms it may be explained as embracing those risks which are outside the ordinary insurance risks. For example, under a will a beneficiary may ultimately become entitled to certain property provided the tenant for life does not marry and have issue. This is a risk which is frequently covered by a Contingency Policy.
NAME Aim ARMS RISK.
Another risk of a more peculiar nature which has been the subject of insurance arose under the condition of a will where the testator left his property with the proviso that the tenant for life should adopt his name and arms. Subsequently the tenant for life desired to raise a loan on his interest and the insisted on a policy to cover the risk of such interest being forfeited by reason 'of the borrower changing his name and arms' at a subsequent late.
TITLE RISKS.
In connexion with dealings in property it is not infrequent to find some defect in title such as a missing deed, a misdescription of the property in an existing deed, a restrictive covenant which may, have been broken, &c., &c. It will be readily understood that although such defect -may not be serious a purchaser or mortgagee might be deterred from buying or lending on the pio-perty, a difficulty which has in many cases been overcome by ..neans of a Contingency Policy.
LOST CERTIFICATES, &C.
Another frequent use of these policies is in connexion with lost-bonds, share certificates, &c., where on a transfer the difficulty arises that the document of title cannot be produced. The majority of Limited Coinpanies are willing on production of a Statutory Declaration as to the circumstances and a policy of this nature to issue a fresh bond or certificate as the case may be.
• ISSUE RISKS: A policy of some £50,000 was ,taken out to protect mortgagees who were lending-on the reversionary interest of the borrower should the life tenant, a man of advanced age, marry and have male issue. The premium paid. in this case was some 14,000.
- RECOVERY OF SANITY.
Another risk which was insured by a Contingency Policy arose in connexion with the estate of a wealthy lunatic who had been in this condition for many years, during --which the estate had increased to a very large extent. Next of kin who would eventually participate unless the lunatic recovered and made a will detrimental . to _their interests were desirous of borrowing on their expectations, and a loan was eventually arranged for some £60,000, with a Contingency Policy which was granted after medical evidence from leading medical experts.
SETTLEMENTS FOLLOWING COAL MINING.
A still more interesting example of the uses of a Contin- gency Policy is illustrated in connexion with the winding up of a colliery Company where, after all the assets had been realized and the debts settled the liquidator was faced with the contingency of claims from owners of buildings under which the colliery workings had penetrated, and to which there was always a remote possibility of damage by subsidence. The bulk of the monies were distributed and some £10,000 or more was paid into Court to provide for any such claims; - Some few years afterwards, no claims having arisen, an application was made to the Court to release this money for-distribution, and the application was granted, subject to -a Contingency Policy to take the place of the fund released should any future claim arise. It frequently happens that sums of money are held by liquidators to cover possible claims which may never mature and such monies can from time to time be set free for distribution -by means- of-a•Cvntingency - - - AN UNLIMITED FIELD FOR CONTINGENCY POLICIES.
It is, of course, quite impossible to set out in a short article all the possible cases in which such policies are useful, but from the examples given it can be realized that there is practically no limit to the risks against which Provision can be made.
GEORGE M. `WATT.
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