exam questions Flashcards
The insured manufactured and installed an oven at a bakery. A subsequent fire burnt down the whole bakery and a claim was made under the insured’s combined liability policy. Investigations showed that the fire was caused by a defective oven [that was excluded from cover] and due to the negligence of an employee who had left the oven switched on overnight [that was covered by the policy]. The insurer is:
a.
not liable for any of the claim.
b.
liable for the damage caused by the defects in the oven, but not that due to the employee’s negligence.
c.
liable for all of the claim.
d.
liable for the damage caused by the employee’s negligence, but not that due to the defects in the oven.
a.
not liable for any of the claim.
Which of the FCA’s outcomes for the fair treatment of consumers is LEAST likely to affect the claims process?
Outcome 4: Where consumers receive advice, the advice is suitable and takes account of their circumstances.
A men’s clothing shop suffers water damage to the stock that is caused by a plumber’s negligent repairs to some pipe work. Some of the stock was from last season’s range that had not been sold. On what basis will the plumber’s insurer settle the claim?
The original cost of the stock less an allowance for last year’s stock.
An insured has a public liability policy that is written on an occurrence basis and the policy runs from 1 January to 31 December each year. On 15 December a visitor to its premises is injured by a loose tile falling off the roof. He makes a claim for his injuries, which the insured receives on 22 December and it notifies its broker on 23 December. Due to the Christmas break this is not notified to the insurer until 2 January. Which date is the trigger for the insurance coverage?
15 December.
What is the purpose of the Pre-Action Protocols?
To encourage parties to use litigation only as a last resort.
Why is the case of Kosmar Villa Holidays plc v. Trustees of Syndicate 1243 [2008] important to claims handlers today?
An insurer is entitled to take a reasonable period of time to decide whether or not it accepts liability. A reservation of rights is not required while it is still investigating the facts of the claim.
An actuary who works for an insurer would need to access claims information to:
prepare reports on the profitability of different lines of business.
In an insurance contract, general damages would include:
lost pension
A UK based insurance company uses Swift Claims, a managing general agent, to handle its claims. If Swift Claims is based in and regulated in the USA:
the UK based insurer is answerable to the FCA in respect of how the claims are dealt with.
A pragmatic approach to claims handling will involve:
settling straightforward cases in one phone call
Excesses and deductibles are NOT permitted for
employers’ liability policies.
In the event of fire damage to a property that is covered by a commercial property policy with a reinstatement condition, the sum insured must be adequate at the time of:
repair.
Supporting an impaired claimant to help them to lead as full a life as possible is known as:
qualitative rehabilitation.
An insurer incorrectly settles a large property claim that should have been declined due to a policy exclusion. If the insurer then seeks reimbursement from the reinsurer for its share of the loss, the reinsurer:
does not have to pay the claim if it was excluded from the underlying cover.
What policy is typically written on a claims made basis?
Directors’ and Officers’.
During a storm, a tree fell on a property, which in turn started a fire. Whilst the blaze was being put out, some possessions were stolen from the unlocked property for which a claim is made. What was the proximate cause of the loss being claimed for?
The theft
Where a loss adjuster has been appointed, negotiation of the settlement of a claim will usually be carried out by the:
loss adjuster within set authority limits.
A men’s clothing shop suffers water damage to the stock that is caused by a plumber’s negligent repairs to some pipe work. Some of the stock was from last season’s range that had not been sold. On what basis will the plumber’s insurer settle the claim?
The original cost of the stock less an allowance for last year’s stock.
Why does an insurer want to know the exact time that a loss occurred?
To check whether the claim falls within the policy period.
If Henry makes a claim for loss of amenity, this will compensate him for:
loss of enjoyment of his hobby of singing.
If a claim on a business interruption policy was only partially met, this is most likely because the claim included an amount to cover:
regular costs and expenses that were not incurred following the business interruption.
The insured has two policies covering his buildings; one with Insurer X with a sum insured of £200,000 and the other with Insurer Y with a sum insured of £400,000. If a fire at the premises causes £24,000 of damage, how much will Insurer Y pay in settlement using the maximum liability method?
400,000/ 600,000 x 24,000
Why might a lawyer be appointed on a first party personal lines claim?
To advise on coverage.
As a result of her injuries Mary has had to give up her job as a midwife, a job that she had always wanted to do and gave her great satisfaction. Claiming compensation for this particular aspect of her losses falls under what type of damages?
Loss of congenial employment.
“A private and confidential binding dispute resolution process that, in practice, tends to be formal and follow litigation procedures as its main driver” is a description of what type of alternative dispute resolution?
Arbitration.
Why is the case of Basir v. Larizadeh [2019] important when considering claims?
Section 57 of the Criminal Justice and Courts Act 2015 applies to the whole of a claim, not just the part of the claim relating to personal injury.
What type of liability policy rarely involves a property claim?
Employers’ liability.
The Consumer Insurance [Disclosure and Representations] Act 2012 allows a proportionate remedy where any misrepresentation is:
careless
Hamid has lodged a £950 claim against his landlord for emergency repairs to his flat following a burst pipe. If the claim is disputed and goes to court, which track will his case be allocated to?
Small claims track.
Many policies require the insurer to obtain the insured’s consent to an admission of liability on their behalf. This is most common in relation to:
professional indemnity claims.
What is NOT an unfair claims practice in the USA?
Selecting the correct choice of investigation route, based on the size of claim and its complexity.
Under the Civil Procedure Rules, when is the fast track route normally used to settle a claim?
Where it is not eligible under the small claims track, the case lasts no more than a day, and the value is £25,000 or less.
Which Pre-Action Protocol is most likely to be used where a £15,000 personal injury claim is made by an employee against an employer?
The Pre-Action Protocol for Low Value Personal Injury [Employers’ Liability and Public Liability] Claims.
A loss adjuster has been appointed to investigate a commercial property claim. How will this be reflected in the reserve put on the claim?
A reserve will be placed on the insured’s loss with a separate reserve allocated for the loss adjuster’s fees.
