Insurance

Question 1

Scottish Amicable v NAC

Answer 1

• contract, insurer takes consideration of payment of estimated equivalent
• make up loss to assured

Question 2

The Medical Defence Union Limited

Answer 2

• contract, 3 present elements:
• x entitled if y event occurs
• y event must involve uncertainty
• x must have insurable interest in subject-matter of contract (right to benefit must be certain)

Question 3

Department of Trade and Industry v St Christopher’s..

Answer 3

• “benefit”
• sum of money or equivalent service
• measurable in financial terms

Question 4

Digital Satellite Warranty Cover Ltd

Answer 4

• DWSC argued contracts were not regulated insurance contracts
• Held: they could be, therefore in breach of FSMA 2000
• selling warranty contracts for repair/replacement without authorisation

Question 5

Griffiths v Fleming

Answer 5

• assumption that insured has insurable interest in own life

Question 6

Wight v Brown

Answer 6

• assumption of insurable interest in life of spouse/civil partner

Question 7

Feasey v Sun Life Assurance

Answer 7

• insurable interest discovered from circumstances - no one definition
• subject of insurance ascertained by terms of policy
• insurable interest when contract entered and at time of loss (indemnity)

Question 8

Dalby

Answer 8

• insurable interest when contract entered but need not exist at time of loss
• policy valid at creation, still valid at death even when cancelled

Question 9

Macaura v Northern Assurance Co Ltd

Answer 9

• M, shareholder and unsecured creditor of company
• insurance policy for timber in own name
• no insurable interest
• creditor nor shareholder has insurable interest in assets of company

Question 10

*Cowan v Jeffrey Associates

Answer 10

• C shareholder and company director
• company owned heritable property
• C had no insurable interest in property at time loss occured
• insurable interest must exist at time of loss
  (conclusion of missives is minimum requirement of II)

Question 11

Mitchell v Scottish Eagle Insurance Co.

Answer 11

• partnership - only II in partnership itself

- no individual interest of joint partners

Question 12

Fehilly

Answer 12

• ballroom lease
• tenant insurable interest only in relation to repair as subject in the condition in which lease provided
• did not cover full reinstatement of destroyed property

Question 13

Chapman v Pole

Answer 13

• insured can only recover real and actual value of goods

Question 14

Leppard v Excess Insurance Co Ltd

Answer 14

• indemnity > insured placed in same financial position as before loss
• recoverable only to market value as agreed when insurance
• claimed rebuilding = 8k, awarded and upheld 3k
• anything more than 3k would amount to profit

Question 15

Sprung v Royal Insurance

Answer 15

• insurers wrongfully declined pay out, later did
• claim from insured for compensation denied
• interest on late sums was sufficient compensation

Question 16

Strachan

Answer 16

• Scots law allow damage claim for compensation

- payment classified as obligation to pay damages for breach of contract

Question 17

Castellian v Preston

Answer 17

• insurers subrogated - could recover money from indemnity in relation to newly sold house fire
• purpose of subrogation is ensure policyholder is indemnified not not over indemnified

Question 18

Caledonia North Sea Limited v London Bridge Engineering Ltd

Answer 18

• insurance company subrogated - rights of insured

- insurer must raise action in name of insured

Question 19

Lord Napier & Ettrick v Hunter

Answer 19

• subrogation from “top down”
• insurers entitled to remedy of funds recieved by insured from 3rd party
• if loss greater than sum insured, won’t get full amount

Question 20

Simpson & Co. v Thomas Burrall

Answer 20

• insurer entitled to realise assets of wreckage if paid a total loss

Question 21

JJ Llyod Instruments “Miss Jay Jay”

Answer 21

• policy covered perils of sea, not design fault
• not determined by dominant cause of ship loss
• design not positively excluded in policy
• insurers liable.

Question 22

“Popi M”

Answer 22

• onus on insured to prove caused loss was included as insured peril
• insurers do not have to prove contrary

Question 23

Wayne Tank v Pump co Ltd

Answer 23

• positive exclusion of cause of fire in policy meant insurers not liable
• insurance policy covered course of business in premises other than own

Question 24

Pan Atlantic v Pine Top Industries Co.

Answer 24

• “influence judgment”
• fact would have had effect on prudent insurer’s mind
• only entitles insurer to avoid policy if actually induced making of contract

Question 25

Economids v Commercial Union Assurances Co.

Answer 25

• sole obligation of insured was representation of expectation of belief
• provided that belief honest, insurers could not avoid

Question 26

Southern Rock Insurance Co Ltd v Hafeez

Answer 26

• online forms - what has been asked of consumer
• Held: no way of knowing what online questions were asked
• consequently - were any deliberate/reckless?
• insurers claim of misrepresentation failed: must prove exact information captured

Question 27

Versloot Dredging BV

Answer 27

• court held insured could not use claim due to using fradulent devices (alarm untruth)
• on appeal, disproportionately harsh to deprive claim
• cannot make loss in order to make claim/exaggerate extent of claim

Question 28

“The Good Luck”

Answer 28

• insurers failed to give notice of ceasing insurance of ships to bank
• insurers had breached contractual obligations by failing to notify bank

Question 29

“The Star Sea”

Answer 29

• no duty to disclose during course of policy of developments increasing risk
• policy may have term requiring disclosure to be made

Question 30

*Hussain v Brown

Answer 30

• burglar alarm
• question of alarm posed in present tense and answered in affirmative
• did not constitute continuing warranty
• fact that alarm was off did not render contract voidable

Question 31

*Ansari v New India Assurance Ltd

Answer 31

• “premises protected by sprinkler system?”
• answered in affirmative
• Held: continuing warranty as system integral to building and intended to function automatically
• insurer refused to pay - system was turned off

Question 32

McPhee v Royal Insurance

Answer 32

• insured completed proposal form based on measurements from previous owner
  Held: material misstatement
• insured must give answers with reasonable basis for knowledge/belief - not reckless

Question 33

Bereseford v Royal Insurance Company Ltd

Answer 33

• 2 issues to be determined:
  1) contract interpreted using normal principles of interpretation
  2) could contract be enforced in court of law?
• suicide - 1 year had elapsed - insurers bound to meet claim
• Held: not given effect to for public policy reasons

Question 34

Dhak

Answer 34

• alcoholic died due to choking in sleep
• life assurance covered ‘accidents’
• not accidental, insurers not liable to pay

Question 35

Connelly

Answer 35

• PTSD during course of employment (fire service)
• policy - ‘accidental bodily damage’
• PTSD was deemed accidental, distressing circumstances of work were sufficiently unexpected

Question 36

Stockton v Mason

Answer 36

• broker implied authority to enter temporary insurance on behalf of insurers
• temp. interim insurance contract entered, insurers liable to indemnify