One of the most critical factors on the conclusion of an insurance contract is to determine the extent of the insurance risk or cover. This enables parties to the contract to ascertain for themselves the rights and obligations under the policy. On the one hand, the extent of insurance risk determines what is recoverable by the insured or assured on the occurrence of the insured event, and, on the other hand, what level of liability is assumed and the premiums payable to the insurer. The extent of insurance risk also determines what rememdial action, if any, may be undertaken by the insured or assured by way of taking out extra insurance, if the policy at hand is not adequate.