Chapter 5 - New Questions

Question 1

In what circumstance would a motor policy renewal come into force according to the provided example?

Answer 1

When the insured simply continues to use the car after receiving the renewal notice.

Question 2

In the case of Danbol Pty Ltd v. Swiss Re International SE (2020), what was the court’s finding regarding the renewal offer?

Answer 2

The insurer’s offer involved a mutual promise rather than a unilateral contract.

Question 3

In the case where the premium is to be agreed upon later, what type of contract is created?

Answer 3

A binding contract with terms left to be fixed.

Question 4

Under the Statute of Frauds 1677, what type of contract must be evidenced in writing?

Answer 4

Contracts of guarantee.

Question 5

What must companies obtain before they can write insurance business in the UK?

Answer 5

A license from the UK regulator for the class or classes of business.

Question 6

Which of the following best describes the ‘subject matter’ of insurance?

Answer 6

The policyholder’s interest in the physical property.

Question 7

In the case of Lucena v. Craufurd (1806), why was the interest of the Crown Commissioners in the enemy ships considered insufficient?

Answer 7

They had not yet taken possession of the ships and only had an expectancy.

Question 8

Which case involved a dispute over insurable interest related to a pub owned by a liquidated company?

Answer 8

Comlex Ltd v. Allianz Insurance Plc (2016).

Question 9

Which of the following distinguishes insurance from wagering?

Answer 9

Insurance requires full disclosure from both parties, while wagering does not.

Question 10

Why might the requirement for insurable interest to exist at the time of the contract but not necessarily at the time of the claim be beneficial for life insurance policies?

Answer 10

It allows for greater flexibility in transactions and transfers involving life policies.

Question 11

Which legislation repealed the Gaming Act 1845 concerning insurance policies?

Answer 11

Gambling Act 2005

Question 12

What does the Gambling Act 2005 stipulate about insurance policies relating to gambling?

Answer 12

The fact that a contract relates to gambling shall not prevent its enforcement.

Question 13

What does Section 335(2) of the Gambling Act 2005 indicate regarding rules preventing enforcement of contracts?

Answer 13

It allows enforcement of contracts unless specifically related to gambling.

Question 14

What happens if an insurance policy is void due to a lack of insurable interest?

Answer 14

The policyholder is not entitled to any return of premiums.

Question 15

In which case was the insurance policy held to be void for lack of insurable interest, and the policyholder was unable to recover premiums?

Answer 15

Harse v. Pearl Life Insurance Co. (1904)

Question 16

What principle is upheld in property insurances even if the Gambling Act 2005 might suggest otherwise?

Answer 16

The principle of indemnity, which limits recovery to the actual loss incurred.

Question 17

In which type of policies is it common for insurers to agree to dispense with the need to prove an insurable interest?

Answer 17

PPI (Payment Protection Insurance) policies in the marine market

Question 18

What is a common reason for an employer to take out a ‘keyman’ or ‘keywoman’ insurance policy?

Answer 18

To cover the cost of replacing a key employee in case of their death.

Question 19

What is the extent of a mortgagee’s insurable interest in the mortgaged property?

Answer 19

The outstanding amount of the loan

Question 20

Which of the following best describes the insurance responsibility under a leasehold arrangement?

Answer 20

Both the leaseholder and freeholder should agree on who will arrange insurance.

Question 21

What was the outcome of the Supreme Court decision in the FCA test case concerning COVID-19 related business interruption claims?

Answer 21

The Court found that 14 out of 21 policy wordings responded to the claims

Question 22

In the context of negligence, what must be demonstrated between the breach of duty and the harm caused?

Answer 22

Causation

Question 23

What type of liability insurance would cover a surgeon who inadvertently leaves a tool inside a patient?

Answer 23

Professional indemnity insurance

Question 24

What was the significance of the case Dalby v. The India and London Life Insurance Company (1854)?

Answer 24

It dealt with the insurable interest in the reinsurance of a life policy

Question 25

In the context of reinsurance, who typically does not have a right or interest in the reinsurance, according to the Marine Insurance Act 1906?

Answer 25

The original policyholder