Principle of Loss Minimization
According to the Principle of Loss Minimization, insured must always try their level best to minimize the loss of their insured property, in case of uncertain events like a fire outbreak or blast, etc. The insured must take all possible measures and necessary steps to control and reduce the losses in such a scenario.
The insured must not neglect and behave irresponsibly during such events just because the property is insured. Hence it is a responsibility of the insured to protect his insured property and avoid further losses.
For example:- Consider the same example of fire on board your ship, which is insured for 15 million USD, the Ship staff should try to extinguish the fire and restrict the damage, they should not try to lower the life boat and get out of the ship, with out trying to put off the fire, because the Ship is insured– this example may sound odd, but was prevalent in early days, when the ship is say 10 or 20 NM from the shore.
