CONTRIBUTION

Question 1

Where is double insurance defined?

Answer 1

In the Marine Insurance Act 1906.

Question 2

Double insurance definition

Answer 2

Where 2 or more policies are affected by or on behalf of the assured on the same adventure
- Marine Insurance Act (1906)

Question 3

Rules for Double Insurance as per the Marine Insurance Act (1906)?

Answer 3

1. Insured can choose which insurer to recover from but can’t receive more money than entitled
2. If valued policy - Insured must account for any payments received from other insurers
3. If unvalued policy - Insured must credit the payment received from other Insurers against the actual Insurable value
4. If Insured gets more money than they are entitled too then they must hold the extra amount in trust for the Insurers who an recover their share.

Question 4

Rateable proportional clause?

Answer 4

• Seeks to limit the insurers liability to the PH to it’s share of the loss if there is any other insurer covering the same loss.

Question 5

Contribution and the Common Law position?

Answer 5

1. PH may have as many policies as he wishes
2. PH may choose whom to submit a claim
3. PH must declare existence of other policies to whom he submits his claim
4. Insurer to whom presented too must settle claim in full
5. Insurer to whom claim presented too will recover from the other insurers.

Question 6

What is a concurrent policy?

Answer 6

2 or more policies insure the same property only

Question 7

What is a nonconcurrent policy?

Answer 7

2 or more policies insure the same property and other properties aswell eg block policy

Question 8

For contribution/double insurance to occur, two or more policies must?

Answer 8

1. Have same subject matter
2. Have the same insured
3. Have same risk/peril

Question 9

Independent Liability Calc?

Answer 9

1. POLICY A = SI/VAR X LOSS = INDEPENDANT LIABILITY
2. POLICY B = SI/VAR X LOSS = INDEPENDANT LIABILITY
3. POLICY A = IL/TOTAL IL X LOSS = AMOUNT PAID BY POLICY A
4. POLICY B = IL/TOTAL IL X LOSS = AMOUNT PAID BY POLICY B

Question 10

King and Queen Granaries (1877) ?

Answer 10

• Bailees and owners insured the grain
• Bailee’s insurers paid claim following fire
• Tried to recover from owners insurer
• Court held couldn’t as not concurrent policies as the interests insured by the policies were different

Question 11

Maximum Liability Calc?

Answer 11

POLICY A = SI/TOTAL SI X LOSS = AMOUNT PAYABLE BY POLICY A

POLICY B = SI/TOTAL SI X LOSS = AMOUNT PAYABLE BY POLICY B.

Question 12

When should the maximum liability/SI method be used?

Answer 12

When there is no average but IL provides most realistic basis

Question 13

What is an excess clause?

Answer 13

• Excludes cover when other insurance in force