The undermining of the indemnity principle - a plea for a return to basics and the rediscovery of full indemnity in insurance law - a case study of Vietnam

Electronic versions


  • Binh Nguyen

    Research areas

  • PhD, School of Law


The principle of indemnity is a root of indemnity insurance. The nature of the principle is that when the insured event occurs, the insureds are entitled to receive compensation equal to the actual loss they have suffered.The indemnity principle is the foundation for the formulation of the other principles in insurance laws, such as the principle of insurable interest and the principle of subrogation. This thesis examines the research questions of “if insureds have suffered an actual economic loss caused by an insured risk, to what extent does the current Vietnamese insurance law on subrogation and insurableinterest allow them to becompensated for their loss? And what reforms are necessary to protecttheinsureds’ rights to obtain full compensation?”This research has critically examined the application of the two principles (the principle of insurable interest and the principle of subrogation) in connection with the indemnity principle, and argues that the rules of insurable interest and subrogation under Vietnam’s insurance laws to some extent depart from the nature of the indemnity principle. In some circumstances, the provisions governing insurable interest may deprive the insureds of the right to be compensated for the actual economic loss, and may put the insurers into an “all to gain, nothing to lose” position. In addition, there is confusion between the principle of subrogation and the principle of assignment in Vietnamese insurance laws. This confusion may harm the insureds’ rights to obtain full compensation for their actual economic loss.This thesis concludes that, in order to make the rules of insurable interest and subrogation under Vietnamese insurance laws consistent with the nature of the principle of indemnity, their reform is necessary. Adherence to the indemnity principle will create the backbone for establishing a legal framework for the sustainable development of Vietnam’s property insurance market in which a balance of the rights and interests of insurers and insureds can be achieved.


Original languageEnglish
Awarding Institution
  • Aled Griffiths (Supervisor)
  • Zhen Jing (Supervisor)
Award dateJan 2013