3 Legal principles Flashcards
Insurable Interest
Must be present for insurance to be valid
Offer and Acceptance + consideration
must be present for valid contract
CIDRA2012 requires
reasonable care to answer questions fully and accurately
Remedies for reasonable mispresentation?
None, insurer must pay claim
Remedies for careless misrepresentation
Proportional
Remedies for deliberate or reckless misrepresentations
Insurer can avoid contract and refuse all claims
Insurance Act 2015 requires
duty of fair presentation
Remedies are available for breach of fair presentation if…
a) would not have entered contract or b) would have offered different terms.
Remedies are available if there is a….
qualifying breach
Qualifying breach is either…
reckless of deliberate
Remedies for deliberate and reckless breach
Avoid contract (never existed) and keep premium
Breach of warranties
Cover suspended until breach resolved
Fraudulent claims
Insurance Act
Enterprise Act 2015 allows damages for
late payment
IA2015 abolished contract termination based on
good faith (marine Act)
Avoiding contract based on breach of good faith is only possible if….
commercial and mispresentation was reckless / deliberate
If insured thinks there has been a breach, then the policyholder is notified of
reservation of rights
Case law waiver, Kosmar Villa v Trustees
Insurers allowed period of time to investigate. Do not affirm policy during this time (renewal or contract amendment)
Proximate cause - famous case law
Leyland Shipping v Norwich Union Fire
Warranties take three forms
Past
Present
Continuing
Condition precedent
Compliance to conditions is required. Serious!
Case law condition: Eagle Star
Any breach of condition precedent meant no payment
Case Law: Aspen
Wording meant condition precedent
Idependent peril
Damage was caused by single peril alone
Interdependant perils
Only a combination of perils led to loss
Case Law Perils: Wayne Tank
If combination of excluded and insured perils, there is no cover.
Case Law Perils: JJ Lloyd
Weather insured + Defective yacht design uninsured so insurer liable.
Case Law Perils: Tektrol
Loss of source code was deliberate so claim not covered.
Case Law exclusions: Bankers Insurance
Jet ski was a waterborne craft - claim not covered.
Case Law exclusions: Blackburn Rovers
Footballer injury resulted from degenerative condition that was excluded. Claim not covered.
Case Law exclusions: C A Blackwell
Rain damage to construction site. Claim allowed as loss was fortuitous
