Subrogation and contribution lists Chapter 10

Question 1

Three sources of subrogation rights

Answer 1

1. Tort eg negligence
2. Contract
3. Statute

Question 2

Four non contribution conditions

Answer 2

1. Escape clauses - forbid insured from taking out another policy without consent of insurers
2. Non-contribtion
3. Mores specific insurance
4. Rateable proportion

Question 3

Five requirements for contribution to arise

Answer 3

1. each policy is liable for the loss;
2. each insures the same interest in the subject matter;
3. two or more policies of indemnity exist;
4. each insures the subject matter of the loss; and
5. each insures the peril which brings about the loss.

Question 4

Two methods of calculating contribution

Answer 4

Maximum liability method

Independent liability method

Question 5

Two way market agreements amend contribution

Answer 5

1. Insurers may agree to share losses in cases where, strictly speaking, contribution does not arise in law.
2. They may sometimes agree to waive rights of contribution in cases where such a right clearly exists, so that the whole of the loss is borne by one insurer.