What Is The Subject Matter In Insurance?
In insurance, "subject matter" refers to the life, property, cargo, or ship against which an insurance policy is taken out. The insured does not generally retain his interest in the topic of insurance for the duration of the policy.
Typically, the policy comprises a clause that specifies the outcome of any assignment by the assured. Additionally, the subject matter may have been transferred by legal procedure in the event of his death or bankruptcy. It might have been sold or donated.
It may have been transferred to a trust, or it may have been mortgaged. If a partnership initially held it, the firm's constitution might have changed, or it may have been transformed into a limited liability corporation. Therefore, it becomes vital to evaluate the impact of such assignments on the legality of their very nature and cannot assign the subject matter of personal accident insurance and life insurance. In all other categories of insurance, the subject matter is assignable.
An assignment of the subject matter of insurance according to an agreement between the assured and the assignee may influence the policy's validity since the insured must have an insurable interest at the time of the loss.
Suppose the insurance relates to a particular property, either directly, as in the case of insurance on the land itself, or indirectly, as in the particular instance of insurance against the liability arising from its ownership.
In that case, it is obvious that the property insured may be appointed and that the liability insured against must inevitably pass with the property.
Suppose the insurance does not pertain to a specific property but rather to a property class. In that case, the assignment of a specific item inside the class does not impact the ownership of the class or the responsibility flowing from it.
However, the class may be assigned as a whole, such as when a firm is sold, and any subsequent obligation deriving from its ownership must be borne by its new owner.
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