Got M05: Insurance law coursework Essay

Got M05: Insurance law coursework Essay

Got M05: Insurance law coursework Essay

Got M05: Insurance law coursework Essay

Question 1 – Learning Outcome 3 (10 marks)

Luke is a farmer and has discovered that uninvited people have been coming onto his private farm land, damaging
some crops and taking other crops to sell.
(a) Identify, with justification, three torts that may have been committed by the uninvited people. (6)
(b) Explain briefly two appropriate remedies that may be available to Luke. (4)
Question 2 – Learning Outcome 4 (10 marks)
ABC plc, an insurer, agreed to provide property insurance for a policyholder at an annual premium of £300. The policyholder accepted ABC plc’s terms and the policy was incepted on the 1st December 2016. The premium payment was due by the 1st January 2017. Due to an administrative error, ABC plc incorrectly calculated the annual premium which should have been £415. On the 15th December 2016, an insured event occurred at the policyholder’s property. The policyholder notified a claim to ABC plc on the same date.

(a) Explain briefly two reasons why the policyholder has no legal obligation to pay the higher annual premium. (6)

(b) Discuss the extent to which it is relevant to the claim that the premium has yet to be paid. (4)
Question 3 – Learning Outcome 5 (10 marks)
You are an underwriter for JKL plc, an insurer. An insurance broker holds a delegated authority scheme with JKL plc. This delegated authority scheme allows the insurance broker to place on cover motor cars that are in specified car groups. The insurance broker places on cover a motor car in a car group which is outside the delegated authority.

Explain, with justification, the extent to which JKL plc is legally bound by the insurance broker’s decision to place
the motor car on cover. (10)

Question 4 – Learning Outcome 6 (30 marks)
Matthew, a businessman, wishes to arrange insurance policies in his own name for the following:
• A policy for his uncle’s sports car, which he will be borrowing for the summer.
• A policy for a bracelet, which he gave to his daughter for her 21st birthday.
• A policy on the life of the Managing Director of Matthew’s business.
• A policy on his father’s house, as Matthew is the sole beneficiary of his father’s will.
Matthew owns a property that is insured with FD plc, a household insurer. When he applied for the property insurance, he
failed to disclose the following:
• He rents his property out to holidaymakers.
• The property is unoccupied, due to the cold weather, for at least four consecutive months during each winter.
The annual premium for the holiday home was £500, but would have been £750 if FD plc had known about the rental use. A
loss resulted from water pipes which froze whilst the house was unoccupied during the winter. This resulted in a water
damage claim of £3,000.
(a) Explain, with justification, whether an insurance policy is likely to be valid in Matthew’s name for each of the
following:
(i) His uncle’s sports car. (4)
(ii) His daughter’s bracelet. (4)
(iii) The life of the Managing Director. (4)
(iv) His father’s house. (4)
(b) Discuss FD plc’s potential legal remedies for each of the two non-disclosures in relation to Matthew’s property.
Refer to one statute in support of your discussion. (14)
M05/2017 M05: Insurance law 3
Question 5 – Learning Outcome 7 (20 marks)
You are a claims handler for a domestic property insurer and receive a claim from Laura, one of your contents
policyholders.
Laura rents a domestic property from Carl. This property is part-furnished with Carl’s furniture. As part of the rental
agreement, Laura was required to purchase a domestic contents policy that names both Carl and Laura as insureds.
The contents policy requires Laura to secure all ground floor windows and lock all entry and exit points when leaving the
property. Laura notifies you of a claim for the theft of some of her personal possessions and for damage to some of Carl’s furniture.
Laura informs you that she has notified the police of the burglary.
Your enquiries establish that, on the day of the burglary, Laura had left the property to go to work, but forgot to secure one
of the ground floor windows. In addition, the police enquiries reveal that Laura had acquired some of her personal
possessions by shoplifting.

(a) Explain the validity of Laura’s claim for her personal possessions, due to the ground floor window being
unsecured. Refer to one relevant case in support of your explanation. (6)

(b) Explain, with justification, the effect on the validity of Laura’s policy due to her shoplifting. Refer to one relevant
case in support of your explanation. (6)

(c) Explain the validity of the claim for Carl’s furniture. Refer to one relevant case in support of your explanation. (8)

Question 6 – Learning Outcome 8 (20 marks)
You are a personal lines claims handler for BHR plc, an insurer. A policyholder, Greg, reports a household damage
claim resulting from flooding in his upstairs bathroom. Greg hired an emergency plumber to stop the flood. The plumber, a plasterer and other relevant trade persons were subsequently engaged to make permanent repairs of the damage. The plumber discovered that the flooding was caused by the wear and tear of a water pipe. The flood caused extensive damage to the bathroom floor and the ceiling of the dining room that is directly below the bathroom. To repair the water pipe, the bath needed to be removed to gain access.

Greg paid the emergency plumber in cash to stop the flood and did not obtain a receipt/invoice. Additionally, the plasterer
who repaired the dining room ceiling was paid by electronic transfer to the plasterer’s personal bank account. All other repairs and replacements were paid by Greg, by cheque, on receipt of invoices.
Greg would like you to confirm that BHR plc will reimburse him for the costs of the emergency plumber, as well as cover the
costs to fully repair all the resultant damage caused by the flooding. Wear and tear is an excluded peril in BHR plc’s
household insurance policy.
(a) Describe, with justification, the extent of cover the policy would likely provide for the emergency repair to stop
the flood. Refer to one relevant case in support of your description. (6)
(b) Explain, with justification, the extent of cover the policy could provide for the damage resulting from the
original cause of the flood. Refer to one relevant case in support of your explanation. (10)
(c) Identify, with justification, the information you would require from Greg to allow you to authorise settlement of the
claim. (4)
M05/2017 M05: Insurance law 4
Question 7 – Learning Outcome 9 (20 marks)
You are a claims handler for DVB plc, an insurer. One of the policyholders, Mohid, has a buildings and contents
policy. The building is insured on a bedroom-rated basis for a value up to £500,000 and the contents are insured
for £20,000.
Mohid reports a claim to you for damage caused by a minor fire, in a bedroom, resulting from an electrical fault.
The claim includes the following claim elements:
• Smoke damage to the bedroom floor and walls. Estimated cost: £3,500.
• Smoke damage to linen, bedding and curtains. Estimated cost: £750.
• Fire damage to a seven year old television. Estimated cost: £300.
• Fire damage to jewellery. Estimated cost: £1,200.
You appoint a loss adjuster to assess the claim, who establishes that the contents sum insured is inadequate and should
have been £30,000.
(a) Explain the basis of indemnity for each of the four claim elements included in the bullet points above. (12)
(b) Calculate, showing all your workings, the payment you would make to Mohid to settle the claim, taking
average into account. (8)
Question 8 – Learning Outcome 10 (20 marks)
You are a claims handler for MRB plc, a commercial property insurer. One of your policyholders, RTS Ltd, insure their
factory with MRB plc. The commercial property insurance policy has a rateable proportion clause.
RTS Ltd incur a fire damage loss of £300,000 at their factory and notify you of a claim under their insurance policy.
Upon investigation, you discover that RTS Ltd also have another insurance policy with DDF plc, an insurer that covers their
factory for fire damage.
(a) Discuss the implications of RTS Ltd holding two insurance policies. Refer to one relevant case in support of your
discussion. (12)
(b) Discuss the implications if the insurance policy with DDF plc has a non-contribution clause rather than a
rateable proportion clause. (8)
Question 9 – Across more than one Learning Outcome (30 marks)
You are an insurance broker. One of your clients, William, has a commercial combined policy for his car storage and
car spare parts business.
William owns a commercial property site that stores cars, which are then used for replacement car parts. The cars are
generally stacked for storage. His commercial combined policy requires that William secures the premises and locks the
main gate when the site is unattended.
James, aged 11, has regularly entered William’s property to play in the cars when the site is unattended. James usually
waited for the security guard, employed by William, to leave before entering the site.
William recently dismissed the security guard and has placed a notice at the main gate of the fenced site warning that the
site is dangerous.
The following incidents occur:
• Whilst playing at William’s property, James was injured by a falling car.
• Hannah, a customer, was injured when visiting the site to purchase spare car parts from William. The injury occurred
when a car door fell on her foot whilst she was viewing it.
(a) Explain, with justification, the extent of William’s legal liability for James’ injury. Refer to two statutes in
support of your explanation. (16)
(b) Explain, with justification, the extent of William’s legal liability for Hannah’s injury. (4)
(c) Discuss the validity of the commercial combined policy if it is established that William had not adequately
secured the site. (10)
M05/2017 M05: Insurance law 5
Question 10 – Across more than one Learning Outcome (30 marks)
You are an insurance broker. One of your clients, Lisa, is a lawyer who only practises criminal law. Lisa has a
professional indemnity policy.
Lisa’s friend, Stuart, asked her for some legal advice regarding a house Stuart is purchasing. Although this is not Lisa’s
area of legal speciality, Lisa gave some legal advice to Stuart.
Stuart now claims that Lisa’s advice, which he relied upon, was incorrect and has cost him several thousand pounds which
he is claiming from Lisa. Lisa disputes this claim.
Stuart has taken every opportunity to tell friends and family, both verbally and through social media, that Lisa is
incompetent as a lawyer. Lisa has lost several clients and has seen a downturn in new business, directly due to Stuart’s
comments.
(a) Discuss the extent of Lisa’s legal liability in respect of the advice given to Stuart. Refer to two relevant cases in
support of your discussion. (12)
(b) Explain, with justification, the potential remedy available to Stuart for his financial loss. Refer to one relevant
case in support of your explanation. (6)
(c) Discuss briefly the validity of Lisa’s professional indemnity policy with regard to Stuart’s claim. (4)
(d) Discuss the legal liability in respect of Lisa’s loss of business caused by Stuart’s comments. Refer to one
relevant case in support of your discussion. (8)