Flashcards in Insurance Law Deck (12)
Definition of Insurance
Insurance is the most popular method of anticipating risk. This involves passing on the risk to a third party who will be liable in the instance of the risk occuring.
Define “uberrimae fidei”.
What is the leading case?
“uberrimae fidei” (of the utmost good faith).
The concept of “uberrimae fidei” was introduced into contract law in the landmark case Carter v Boehm (1766).
What are the results of an Insurance Contract being of the utmost good faith?
This results in the insurance contract being voidable at the option of the insurance company should all material facts not be disclosed at the formation of the contract.
Define 'Material Facts'
A fact is material if it would influence the judgement of a prudent insurer in deciding whether to accept the risk, and if so, at what premium and under what conditions.
Give the leading case for non-dislcosure of material facts.
London Assurance v Mansel (1879)
Mansel failed to disclose that several insurance companies refused to insure his life.
Who are the parties to a contract of insurance?
1 - the proposer
2 - the beneficiary
3 - the insurer
What are the standard terms in an insurance contract?
a) The operative clause: specifies the risks that are covered
b) Conditions: the insured must comply with for the cover to remain valid
c) Exclusions: those circumstances under which the insurer will not pay out
What are the NON-standard terms in an insurance contract?
a) The nature of the risk covered
b) The amount of cover
c) The amount and frequency of the premium payments
d) Declarations (from both the insured and the insurer)
What types of insurable risks are there?
a) Insurable interest
b) Unfortuitous event
c) Financial loss
d) Dealing with risk; either elimination, reduction or transfer
Options available when selecting insurance as part of the corporate risk assessment strategy can include?
Approaching an insurance broker
Self insurance (either funded or unfunded)
Captive insurance companies
Types of insurance policy - which types of policy are mandatory for businesses? Name 3.
Property insurance - (mandatory where applicable)
Public and product liability