An Important Distinction Between Valid Insurance Contracts and Wagering Contracts

question 47

Multiple Choice

An important distinction between valid insurance contracts and wagering contracts is that:

• A) insurance contracts create a new risk that did not previously exist, while wagering contracts don't.
• B) wagering contracts are not contrary to public policy, while insurance contracts are.
• C) insurance contracts transfer existing risks, while wagering contracts create new ones.
• D) unlike insurance contracts, wagering contracts are indemnity contracts.

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Definitions:

Government Regulations

Rules established by government agencies to control the behavior of individuals, businesses, and other entities within their jurisdiction.

Employment Contract

A legal agreement between an employer and an employee that outlines the terms of employment, including duties, duration, and compensation.

Binding

A term referencing agreements or legal decisions that are enforceable and must be adhered to by the parties involved.

Fiduciary Duty

The legal obligation of one party to act in the best interest of another when entrusted with care of money or property.