C5 - A Flashcards
Those who are required to purchase compulsory insurance can be divided into two categories
‘private individuals’
‘professions and businesses’.
Private individuals.
Third party motor insurance and public liability insurance in respect
of the ownership of dangerous wild animals and/or dangerous dogs
Professions and businesses.
Motor insurance and employers’ liability insurance are
both compulsory for every business which uses motor vehicles on a road and has
employees respectively.
The main reasons why certain forms of insurance are compulsory
- to provide funds for compensation
- in response to national concerns
Motor third party
the most basic level of motor insurance is a legal requirement under the
Road Traffic Act 1988
provides that it is illegal to cause or permit the use of a vehicle on a public road
unless an insurance policy is in force, covering third party property damage and third party bodily injury or death.
Employers’ liability
Employers’ Liability (Compulsory Insurance) Act 1969
This insures them against their liability to pay compensation to employees who sustain bodily injury or disease, arising out of and in the course of their employment.
minimum required limit of indemnity has been increased over the years and now
stands at £5m, though the insurance market provides £10m as standard.
Public liability
Riding Establishments Act 1970
This insurance indemnifies the insured against claims arising from the use the
insured’s horses. This includes injuries sustained both by persons riding the horses and members of the public.
The insurance must also indemnify the horse riders themselves against any liability they may incur for injury to members of the public, arising out of the hire or use of the riding school proprietor’s horses.
Liability for dangerous wild animals and dangerous dogs
not generally a free-standing insurance but likely to take the form of an extension
to another insurance such as home insurance, where it usually falls under the public liability section.
Professional negligence/professional indemnity
Certain professionals such as solicitors,
accountants, doctors and dentists are required to hold professional indemnity insurance as a condition of having a license to practice.
whats the common link between all the compulsory insurances?
they do not cover loss or damage to the property of the insured, but rather the
financial impacts of situations in which the insured is found to be legally responsible or liable for injury to people or loss or damage to their property.
Compulsory insurance in other countries
USA
workers’ compensation provides
coverage for employees who are injured or become ill at work. This insurance provides
coverage for medical expenses, death benefits, lost wages and rehabilitation.
TURKEY
requirement for property-owners to purchase insurance against earthquake
risks, and some compulsory motor insurance
AUSTRALIA
similar level of compulsory third party motor insurance to the UK
GERMANY
requirement for third party liability insurance is broader in scope than just
motor insurance. It is compulsory to have third party liability insurance in relation to any event for which a German court might consider you negligent.
