Insurance Contract Law

As such, it is governed by the general principles of contract law and also some principles peculiar to insurance law, that include inter alia: essentials requirements of a contract, freedom of contract, privity and sanctity of contract, the parole evidence rule, conditions, warranties and other related principles of contract law. Although this discussion is not a treatise on the law of insurance, the point that the researcher seeks to drive home is that, in order for a valid insurance contract to exist, apart from other essentialia, there are two parties, with respective rights and obligations to the contract, viz the insurer and the insured. Thus as traditionally understood, on these two parties could claim rights and obligations flowing from the insurance contract. A third party was not allowed to sue upon or benefit from that contract

It can thus be gleaned that in this case, an insurance contract is as a result of an agreement or consensus between the two parties: insurer and insured. The parties are bound by the obligations set out in their agreement. However, there are instances there are some types of insurance required by the law. One of these is the compulsory third party insurance. Under this type of insurance, drivers and vehicle owners are indemnified for any legal claim for bodily injuries or damage to property of third parties arising out their use of their motor vehicles and trailers on the roads. In Zimbabwe, this form of insurance is provided for in Part IV and V of the Road Traffic Act. In Zambia, this is provided for in Part VII of the Road Traffic Act No. 11 of 2002.

Mwale argued that the advent of compulsory third party insurance was genesized through an understanding that a person likely to suffer prejudice as a result of road accidents is not necessarily the person who is likely to control the risk from materializing. In the same, Mwale observed that compulsory third party insurance acknowledges the duty of care placed upon all motorists to other road users, pedestrians, cyclists, motorists, and it tries to enable someone who is injured or whose property

However, C must be in knowledge of the contract or at least ratify the same. This does not apply to compulsory third party insurance, as this is dictated ex lege. In other words, the beneficiary or the victim who is entitled to sue upon the contract in cases where he had suffered bodily injury or damage to his property does not need to possess the requisite knowledge of the existence of the contract between the owner or drive of the vehicle and the insurer, and need not to ratify the