Concept:Indemnity is a core insurance principle that ensures compensation only covers the actual loss.
Explanation:The principle of indemnity states that an insured person should be restored to the same financial position as before the loss occurred.
It does not allow the insured to gain extra money or earn a profit from an insurance claim.
Insurance is designed to protect against loss, not to create a source of income.
For example, if property worth
Rs.50,000 is damaged, the compensation cannot exceed that amount, even if the policy is for a higher value.
This principle keeps insurance fair and prevents misuse of the policy.
Thus, the rule that stops an insured person from making a profit when compensated is called indemnity.
Answer:B. indemnity