Chapter 8 - New Questions Flashcards
What happens if an insurance contract explicitly excludes third parties from enforcing the policy?
The third parties are barred from enforcing the policy.
What is the significance of the Contracts (Rights of Third Parties) Act 1999 in insurance contracts?
It increases the likelihood that third parties can claim under insurance policies.
Under the rules of agency, how can a third party gain the right to claim on an insurance policy?
By having the policyholder insure on their behalf.
What restriction arises concerning the ratification of contracts by an undisclosed principal?
An undisclosed principal cannot ratify a contract.
In what scenario can a marine insurance contract be ratified?
Either before or after a loss occurs.
Which statutory exceptions to the doctrine of privity of contract affect insurance?
Road Traffic Act 1988 and Third Parties (Rights Against Insurers) Act 2010
What key change did the Third Parties (Rights Against Insurers) Act 2010 introduce compared to the 1930 Act?
It removed the requirement for third parties to establish the claim against the insolvent insured before claiming against the insurer.
Under Section 47 of the Law of Property Act 1925, what happens if real property is damaged or destroyed after the exchange of contracts?
The insurance benefit is assigned to the purchaser.
In the context of insurance policies with ‘additional insureds,’ who can potentially claim directly against the insurer?
Any person or entity specifically named as an additional insured in the policy.
Under the Fires Prevention (Metropolis) Act 1774, what must insurers do if a third party with a legal or equitable interest serves notice of their interest?
Ensure the insurance money is used for the reinstatement of the property.
What must the insurer prove when there is an exclusion to an insurance policy?
That the exclusion applies to the claim.
What must an insurer prove if they wish to deny liability for a breach of a ‘reasonable precautions’ clause?
The insured acted recklessly.
Under Section 55(1) of the Marine Insurance Act 1906, what is the insurer’s liability?
The insurer is liable for losses proximately caused by a peril insured against.
In a named perils policy, which of the following is considered an ‘uninsured peril’?
Theft
How does the burden of proof differ under an ‘all-risks’ policy compared to a named perils policy?
Under an ‘all-risks’ policy, the insured must only prove that the loss was accidental.
