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Cert CII IF3 > Chapter 3 > Flashcards

Chapter 3 Flashcards

1
Q

What is contra proferentum?

A

Ambiguous contract terms interpreted against a party that drew it up

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2
Q

What is an operative clause?

A

Known as insuring clause and in the policy documents it’s where the actual cover provided is outlined

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3
Q

What is a condition?

A

Contractual terms that insured agrees to comply with
Express or implied

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4
Q

What is an express condition?

A

Stated in the policy

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5
Q

What is an implied condition?

A

By common law / practice and doesn’t need to appear in the policy

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6
Q

What does the policy schedule do?

A

Makes the policy specific to the insured

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7
Q

What is a general exclusion?

A

Apply to all sections of the policy and allow insurer to deny cover

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8
Q

What is a specific exclusion?

A

Apply to particular parts of the policy

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9
Q

What is a market / standard exclusion?

A

Common to all general insurance

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10
Q

Exclusion - War and related perils

A

Considered a fundamental risk and Gov is responsible
Marine and aviation may be extended to include

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11
Q

Exclusion - Radioactive contamination and explosive nuclear assemblies

A

Fundamental risk, potential losses beyond capacity of individual insurers, covered by market pools

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12
Q

Exclusion - Terrorism

A

Gov through Pool Re provide top up cover, premium rates decided by individual insurers, Pool Re is reinsurer
NI - compensation provided by Gov

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13
Q

Exclusion - Pollution and contamination

A

Property - covered if results from insured peril
Public Liability - covers from unexpected, identifiable event not gradually operating cause

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14
Q

Exclusion - Cyber risks

A

Specialist but limited buy back cover

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15
Q

Exclusion - Marine policies

A

Property - exclude material damage covered by marine policy but if insufficient will respond

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16
Q

Exclusion - Contractual liability

A

Excludes liability for claims arising from agreement entered by insured which extend responsibilities beyond common law

17
Q

Exclusion - Sonic bang

A

Damage from pressure waves from aircraft travelling at super sonic speeds

18
Q

Condition - Reasonable precuations

A

Formalises insured duty to take reasonable care to minimise loss or damaged
NOT viewed positively by courts and seen as ‘catch all’

19
Q

Condition - Contribution

A

Other polices in place covering same loss - modifies principle by limiting insurer’s liability to their share

20
Q

Condition - Subrogation

A

Modifies common law principle so insurer can exercise subrogation rights before payment

21
Q

Condition - Average

A

Property - reducing claims payments in proportion to underinsurance
Value insured under policy / value at risk x loss
Calculated before apply excess

22
Q

What is an excess?

A

First amount of each and every claim the insured is responsible for
Compulsory and voluntary

23
Q

What is a deductible?

A

Very large excess eg £50,000

24
Q

What is a franchise?

A

Fixed amount or period that acts as a threshold to determine whether claims are payable

25
Q

What is a warranty?

A

Promises made by insured relating to facts or performance of the risk:
- something will / will not be done
- certain facts exist / don’t exist
Implied or express

26
Q

What is a continuing warranty?

A

State of affairs continue to exist or continue to do something

27
Q

What is the impact of CIDRA 2012 on warranties?

A

Ability to rely on a breach of warranty is restricted

28
Q

What is the impact of IA 2015 on warranties?

A

Breach of warranty is suspensive and discharges insurer from liability from the date of the breach
Insured repairs breach then liability returns

29
Q

What is a condition?

A

Terms that impose important obligations on the insured

30
Q

What happens if a condition is breached?

A

Very serious but impact depends on what category the condition falls into

31
Q

What is the effect of condition precedent to the contract being breached?

A

Must be fulfilled prior to entering contract - raises doubts to entire contact

32
Q

What is the effect of breaching a condition precedent to liability?

A

Must be complied with for valid claim - may avoid liability for that loss

33
Q

What is the impact of IA 2015 on breaching conditions?

A

It is suspensive

34
Q

What is a representation?

A

Written or oral statement made during negotiations
Historically converted into warranties using ‘basis of contract’ clause

35
Q

What impact did CIDRA 2012 and IA 2015 have on ‘basis of contract’ clauses?

A

Abolished them

Cert CII IF3 (11 decks)

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