Chapter 7 Flashcards
Example breach by an insurer VS Insured
Insurer:
Failure to indemnify the insured within a reasonable time
Insured:
Fail to pay the premium
Warranty VS Condition?
Warranty - minor term - damages can be claimed
Condition - major term in contract - damages and termination
What is an example peril that is not insurable at all?
War
What are the two principles of interpretation used by the courts?
Statutory Laws (legislation)
Common Law rules (Layed down in Courts)
What adds statutory control to Insurance contracts and wording?
Consumer Rights Act 2015
What does the Consumer Rights act 2015 impose?
- When the term has been individually negotiated you can still claim
- You cannot exclude or restrict liability for personal injury, or death from negligence
- no unfair term or notice is binding.
Interpretation is generally how for common law and statute?
Statute - literal rule
Common law - ordinary rule
They mean the same thing
What does noscitur a sociis mean?
Taking into consideration the context of the word
What does ejusdem generis mean?
a general word following a specific word is a “thing of the same kind”
What is the contra Proferentum rule?
Where two meanings, the court goes against the one who proposed it
How do the courts deal with inconsistencies?
IF handwritten, the latter takes precedence
If the policy document is issued later, the later document takes precedence
An express term over rules an implied term
What happens if there is not exact compliance with a warranty?
Insurance is suspended until the warranty is complied with (Insurance Act 2015).
Condition precedent to contract VS precedent to liability
Contract: policy will not come into effect if the insured fails to comply
Liability: Non compliance allows the insurer to discharge themselves from liability.
Example of collateral conditions?
minor terms and breach does not stop a claim
What other types of clauses do you have?
Exception clauses (no coverage for X peril - does not suspend, simply narrows coverage)
Suspensive conditions (suspends coverage for certain conditions not being met)
Terms not relevant to the actual loss?
Particular:
- Kind
- Location
- Time
If the insured can prove that the warranty did not directly apply to the loss based on the above, they may still be able to claim.
For Motor insurance can an insurer reject a claim for breach of warranty/ condition?
No - not from a third party under road traffic act 1988
For employers liability, when a condition is broken, what cases can an insurer not avoid the claim?
1- on grounds of late notification
2- policy condition requiring employer to take reasonable care against injury or disease
Joint VS Composite insurance?
Joint: interest of insureds are the same and a breach by one effects all
Composite: breach by one does not effect all
How would you distinguish between a breach of fair presentation and condition/ warranty?
Fair presentation is pre contractual
condition/ warranty is usually during the contract
What is ejusdem generis
The words that follow are of the same kind
effect of contra proferentum when interpretation an ambiguous term
where the term is ambiguous, the preferred is against the one who proposed it
warranty in insurance VS non-insurance contracts
non insurance - minor term
insurance- promise to do something and suspends the contract
what is a continuing warranty in insurance?
promise that will continue
How can a warranty be created
Marine - express or implied
Others - express only
Can an insurer reject a claim for breach of warranty but allow the policy to continue?
Yes
What did IA 2015 introduce to remedy breach of a warranty
cover does not terminate for breach of warranty - it is just suspended and the insured can remedy it
How does English law distinguish between joint and composite
hinges on the interests of the insureds
importance for establishing joint v composite
Joint is indivisible
