Chapter 9: Compulsory Insurance & The Rights of Third Parties Flashcards
List the 5 kinds of compulsory insurance in the UK
- Motor insurance
- Employer’s Liability
- Professional Liability (solicitors, insurance brokers, doctors etc)
- Liability - dangerous dogs or wild animals
- Liability - riding establishments
What did the Road Traffic Act 1988 do?
Made it compulsory to have motor insurance on a public road
Why must businesses in the UK have employer’s liability insurance?
It is compulsory by statute under the Employer’s Liability (Compulsory Insurance) Act 1969
What limits does the Employer’s Liability (Compulsory Insurance) Act 1969 contain?
The minimum legally required limit of indemnity is £5 million
(the insurance market usually provides £10 million as standard)
Why must dangerous dogs or wild animals be insured?
It is statute under the Dangerous Wild Animals Act 1976 and the Dangerous Dogs Act 1991. A licence must be obtained from your local authority and they must be satisfied as to “the adequacy of the insurance”
How would a policyholder obtain insurance for a dangerous dog or wild animal?
Usually public liability insurance would form part of another policy, for example an endorsement to your household policy from your existing household insurer. A standalone policy would require a specialist insurer, probably through a broker
What kinds of profession require Public Indemnity (PI) insurance?
Solicitors - Solicitors (Amendment) Act 1974
Insurance Intermediaries + Accountants - FCA
Doctors
Define “Privity of Contract”
A contract cannot confer rights or impose obligations on anybody who is not a party to it
A contract can only be enforced by or upon a person who is party to it
What statute enforces privity of contract and sets out the contract rights of third parties?
Contracts (Rights of Third Parties) Act 1999
When can a contract be enforced by a third party?
Only if expressly identified in the contract as having that right
What does the Third Parties (Rights Against Insurers) Act 2010 do?
Protects insurance proceedings from insolvency. If an insolvent insured is liable for a third party’s loss, that third party can bring a claim directly against the insurer without restoring the insured to the Register of Companies
What did the Riding Establishments Act 1970 do?
Made it compulsory by statute for all hose riding establishments to have public liability insurance
When can insurance be compulsory?
Compulsory by statute
Compulsory by contract
When may insurance be compulsory by contract?
For example a mortgage agreement - the lending bank may require a homeowners or life policy to be in place to protect their investment
The Employer’s Liability (Compulsory Insurance)(Amendment) Regulations 2008 made what changes to employment liability regulations?
Employer’s are no longer require to keep certificates and there is no longer a requirement to display the certificate in each place of work provided employee’s have reasonable access to an electronic version
