In an Insurance contract, a person insures the interest in a property and not the property as such, so that when he is said to have an insurable interest on a property, he enjoys benefits from its existence and would suffer financial loss from its destruction (Mishra & Mishra, 2016). The principle of indemnity, therefore, requires that the insured is placed in a financial position he was before the loss. This principle states that the insurance policy should not confer greater value than the loss suffered by the insured (Mishra & Mishra, 2016). The principle of indemnity is applied in cases where the loss suffered is measured in terms of money, and the insurance company provides indemnity to the policy holder through payment of cash, replacement, repair and reinstatement (Mishra & Mishra, 2016).
The principle of indemnity is important as it prevents moral hazard in that an insurance contract is a contract of indemnity and should not make the insured gain from his loss, but instead be fully indemnified. This principle is a contractual principle and not a statutory principle in that the policy can be varied to either provide more or less than a strict indemnity. This principle requires that the sum insured be the maximum recovery and when the insured underinsures, the principle of average is applied (Mishra & Mishra, 2016). This principle enables the insurers to receive any salvage left after full indemnity payment.
The focus for safety programs is essential to avoid accidents, fines and heavy compensation costs in case of any injuries (Stasi, 2010). Customers and employees are always exposed to various dangers by falling merchandise, moving forklifts or back pains caused by lifting heavy objects. Various stores have enacted safety programs to reduce the risks caused by these dangers, and some of these safety programs include height policies for stacked items. Stores have set a standard height to prevent unstable merchandise from falling to both employees and customers. Employees are also educated on what items to stock and not to stock because slick packaging makes items more slippery increasing their chances of falling. Another safety program is the use of forklifts and employees and customers are encouraged to keep a safe distance when forklifts are being used. Stores also use extra employees as spotters to ensure that the forklift's path is clear and no one is in danger of being injured by a moving forklift or falling item. Some stores prefer to do heavy stocking when the stores are closed. Stores should educate their employees on proper lifting techniques to avoid any harm caused by lifting heavy objects.
I work for Kohl and some of the methods implemented at Kohl as safety measures include placing all the equipment in the designated areas after using them, keeping the dock clean, always asking for help any time we need something placed in a higher shelf, and ensuring that all ladders are not left unattended. These safety measures have been effective as there are no cases or incidents of injuries to any employee since we started implementing them. It is now 200 days and counting, and the workplace at Kohl's is very safe.
Kohl Company has been sued before for lack of a safe work environment, and this was 10 years ago. An employee had reported about leaks in her department, claiming that the ceiling tiles were getting stains and that eventually, they would hurt someone, but the managers did not take any action. She decided to take as much evidence as she could by recording the ceiling tiles every time it rained, unfortunately, one day the tiles fell and hit her breaking her leg in the process. She sued the company for negligence and lack of taking proper action to provide a safe work environment, and Kohl had to pay for her medical bills.
Mishra, M. N., & Mishra, S. B. (2016). Insurance Principles and Practice. S. Chand Publishing.
Stasi, R. (2010). Developing effective workplace safety programs. Risk Management, 57(4), 26.
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