Chapter 8 Flashcards
Robin is a keen and somewhat reckless golfer. He negligently injures another golfer when he mishits a shot. Robin has a golfer’s policy which covers such liabilities. However, he also has personal liability cover with another insurer. Each insurer’s share of responsibility for the third party injury claim will be determined by the principle of:
contribution
When applying the principle of contribution, the two ways in which each insurer’s rateable proportion of a loss can be calculated are the:
sum insured method and independent liability method.
Where a landlord/tenant relationship exists, this is most likely to give rise to subrogation in which of the following ways?
Under the terms of a contract.
Where there are two policies covering the same loss which both contain a non-contribution clause, what is the effect on the two insurers’ liabilities for any claims that are made?
Each insurer is liable for its rateable proportion.
Under a commercial property damage policy, within what period of time must the insured usually notify their insurer of a claim for riot damage?
7 days.
What type of policy would usually contain a more specific insurance clause?
A household policy.
Tom has insured his house with two different insurers. The policy with Insurer A covers buildings only and has a sum insured of £100,000. The policy with Insurer B has a building sum insured of £100,000 and a contents sum insured of £10,000. Neither policy is subject to average. Following a fire the cost of repairs to the building is £60,000 and the contents is £5,000. How much will insurer B pay?
£35,000.
The purpose of the ABI Memorandum of Understanding – Subrogated Motor Claims is to:
set out principles based on honesty and transparency.
Henry arranges for some of his stock to be stored in a warehouse owned by Storage UK Ltd. Storage UK Ltd. has an ‘all risks’ policy covering goods stored on their premises. Henry also arranges property damage cover for his stock whilst at their premises. If the stock is destroyed in a fire which insurer[s] would be liable for the claim?
Storage UK Ltd’s insurers.
Paul and Peter are partners in an accountancy business. The roof to their offices is blown off in a storm and will cost £10,000 to repair. When making a claim they discover that each of them has taken out a commercial ‘all risks’ policy covering the buildings in the company name. The policy arranged by Paul has a sum insured of £150,000 and that arranged by Peter £100,000. The rebuilding cost of the property is £300,000. How much will be paid by the insurer for the policy arranged by Paul?
£5,000.
Under the terms of the Riot Compensation Act 2016, from whom can insurers recover their outlay where they have provided indemnity for property damage caused by riot?
The local policing body.
What is the term given to a policy condition where the insurer agrees not to pursue damages against a parent or subsidiary company of the insured?
A subrogation waiver.
Rob loses the sight in one eye as the result of a road traffic accident caused by Lucy. He is comprehensively insured and makes a claim for £5,000, this being the benefit under the personal accident section of his policy. He also successfully pursues a claim of £20,000 for compensation for his injuries against Lucy. What amount is Rob legally entitled to retain?
£25,000.
Which policies would NEVER be subject to subrogation?
Personal accident.
At common law, which of the following is NOT one of the requirements that must be satisfied before contribution arises?
Common sum insured.
