Chapter 9

Question 1

Identify what types of insurance that are compulsory in the U.K.

Answer 1

Employers liability
Motor third party
Public Liability Insurance - Riding establishments
Liability Insurance - Dangerous wild animals/ dangerous dogs
Professional Indemnity - solicitors/Insurance Intermediaries

Question 2

What are the two main reasons why certain forms of insurance are compulsory in particular cases?

Answer 2

To provide funds for compensation.
In response to national concerns

Question 3

Which act made EL compulsory?

Answer 3

Employers’ Liability (Compulsory Insurance) Act 1969

Question 4

What does EL cover?

Answer 4

This insures them against
their liability to pay compensation to employees who sustain bodily injury or disease, arising
out of and in the course of their employment.

Question 5

What are the main EL exceptions?

Answer 5

family members and government agencies

Question 6

Does a certificate need to be displayed at each place of work?

Answer 6

No - provided employees have reasonable access to the certificate in an electronic format.

Question 7

Which act stipulates that it is illegal to cause or permit the use of a vehicle on a public road (extended now to include ‘any other public place’) unless an insurance policy is in force, covering third-party property damage and third-party bodily injury or death.

Answer 7

Road Traffic Act 1988 (as amended)

Question 8

Which act states that all proprietors of riding establishments must have public liability insurance?

Answer 8

Riding Establishments Act 1970

Question 9

Which two acts relate to: Liability insurance: dangerous wild animals and/or dangerous dogs

Answer 9

Dangerous Wild Animals Act
1976 or the Dangerous Dogs Act 1991

Question 10

If you own a pit bull and the local authority has issued you with a license to keep it - what are the two main ways you can get liability insurance?

Answer 10

As an extension on your home insurances’ liability cover
Through a broker

Question 11

Which act makes in compulsory for solicitors to have PI?

Answer 11

Solicitors (Amendment) Act 1974

Question 12

What is the minimum level of PI an insurance intermediaries must hold?

Answer 12

currently €1,300,380 for a single claim, and for aggregate losses, the higher of €1,924,560 or 10% of annual income (up to £30m).

Question 13

Why have PI premiums increased dramatically in recent years?

Answer 13

The UK is arguably becoming a more litigious society (following in the footsteps of the USA)
so the need for PI cover has grown.

Reasons for this include:
• the rising cost of legal services;
• retrospective legislation which may ‘move the goalposts’ to the detriment of insurers; and
• adverse judicial decisions.

Question 14

An employer has 50 employees making overalls in a factory. What insurance must they have by law?

Answer 14

EL

Question 15

Which Act gives an injured party the right to claim directly against the liability insurer of the party who injured them. If the party is insolvent.

Answer 15

Third Parties (Rights Against Insurers) Act 2010

Question 16

What does the concept of ‘privity of contract’ mean?

Answer 16

That a person can only enforce a contract if they are a party to it.

Question 17

Tom, who worked mainly for one employer for his entire working life as a construction worker, is diagnosed with an asbestos-related illness. After engaging a solicitor to support him with an employers’ liability claim against the company, he discovers that it has recently become insolvent.

Under the Third Parties (Rights Against Insurers) Act 2010 what is Tom entitled to do?

Answer 17

Tom is entitled to issue a claim directly against the insurers that provided cover to his employer during the period of his employment, rather than having to seek permission from the courts to do so.