State RegulationsNC specificDifficulty 1/5
Under G.S. 58-1-5, an arrangement in which one party undertakes to indemnify another against loss, damage, or liability arising from an unknown or contingent event is defined as:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
G.S. 58-1-5 defines insurance as a contract whereby one undertakes to indemnify another against loss, damage, or liability arising from an unknown or contingent event. This definition is the statutory starting point for what counts as insurance subject to Chapter 58, and it distinguishes insurance from ordinary commercial promises.
Why the other options are wrong
- B) A warranty is a contractual promise about goods or performance, not an indemnity against contingent loss.
- C) An annuity is a distinct product category that pays sums over time, not the statutory definition of indemnity against contingent events.
- D) Suretyship involves a guarantor answering for another's obligation, a different legal relationship from insurance.
Memory hook
Unknown, contingent, indemnify: that is insurance.