Defective Insurance Contracts: Case Study Analysis

M05
wAssi
Coursework assignment answer template
Answer to Question 1 – Learning Outcome 2 (10 marks)
Part (a)
A Tort may be defined as the wrongful act or breach of a right which are other than a
legal contract (Goldberg, Sebok, and Zipursky, 2016). This infringement of the right leads to
call for a legal action on the part of the victim or sufferer. In the instance case the new
resident who have moved next to Moira house, who have violated the norm of social justice.
The tort which is relevant to the present case is the form of Private nuisance. A private
nuisance is defined as the unlawful or illegal intrusion with a person usage or enjoyment of
their own land and property. As per the law the defendant may interfere with the victims
either in one of the two forms.
By allowing venomous or harmful thing to outflow from their own property so as to
interfere with the claimant’s land. Such noxious things may include noise, vibration, smoke,
smells and many others.
Wrongful intervention with the privileges of the claimant’s land. Such interference may
include claiming the right of the way, right to light and many others.
Part (b)
The provision under the prescription Act 1832, provides legal remedies to the victims
who suffered from the tort of the private nuisance (Zillman, Simmons, and Gregory, 2015).
Case of Special damage: Moira has the right to give legal notice to her new resident about
stopping their noxious activity which is generating from the use of the machinery. As the
continuous noise from the machinery is adversely affecting her bereavement counseling
business.
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Coursework assignment answer template
M05
wAssiSeeking for Aggravated damage: Moira has the right to seek compensation of the financial
loss Caused to her with the noxious activities of her neighbors.
Answer to Question 2 – Learning Outcome 3 (10 marks)
Part (a)
In the given question, the insurance company ABC PLC has the right to cancel the
Motor insurance policy of Mr. Paul due to the lack of fund in his bank account at the time of
the payment of the insurance premium. The cancellation of the insurance policy by the
company is the result of the breach of contract on the part of Mr. Paul who have failed to pay
the motor insurance premium on time (Wright, 2017).
It is the responsibilities of Mr. Paul to make payment of the motor insurance premium
to the ABC PLC, however when Mr. Paul want some to make some amendment in the Policy
of the contract then Mr. Paul should first full filling his responsibility by the making payment
of the amount of the insurance premium. When the agreement has been signed by the Paul at
the formation of the contract. The company reserve the right to breach the contract if Mr.
Paul failed to meet his obligation on part of the payment of the insurance premium.
Part (b)
As per the contract law, in an agreement of contract, each party must perform
completely and exactly what they agreed to perform. Doing some things which is different
than what have accepted in the agreement will call for the breach of the contract. However
some small deviation have been permitted as per the principle of de minimis.
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Coursework assignment answer template
M05
wAssiBut in the given case, Mr. Paul has the obligation to pay his motor premium every month
specifically from his bank account, and Mr. Paul wanted to do some modification in the
contract. The company has cancelled his insurance car motor policy, due the lack of fund in
his bank account. This action of the company is aptly suited in the circumstances and cannot
be challenged.
Answer to Question 3 – Learning Outcome 4 (10 marks)
In general an agent has no right to delegates his responsibilities to the sub- agent.
However, delegation of responsibilities may be allowed in certain circumstances which are
mentioned below (Best, Barnes, and Kahn-Fogel, 2018).
 Where the principal specifically empowers the agent to delegate the all or some of the
responsibilities.
 Where the necessity of the delegation of the responsibility can be inferred from the
circumstances- such as the delegation of the routine accountability and managerial
task of the workforces.
 Where the delegation of the responsibility is in agreement with trade or the custom.
 The delegation can be allowed in the case of the specific necessity.
When the responsibility has been delegated, this means that sub-broker will now act on
behalf of the agent and not on the principle. As a result of this, now the agent will be held
accountable to the principle for the work of the sub-agent and the agent will be liable to pay
the sub- agent.
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Coursework assignment answer template
M05
wAssiThere are various ways in which an insurer can end the delegated underwriting authority
contracts. An underwriting contract are usually terminated if there are some serious
consequences with the cover holder such as the
Agreement between the parties:
An agency can be come to an end when the both the parties in the contract have
decided to dissolve the relationship.
Performance
Sometimes the agent has been employed by the organization to carry out some
particular task. When such task has been completed by the agent, then the agent have no
further responsibility and the agency may come to an end.
Lapse of time
Where an agency has been formed for the specified period of time, say for 2 years, it
will end once the time has been passed.
Death of the principle or the Agent
The death of either the principles or the agent terminates the agency.
Part (b)
Upon the death of the death of the managing director of JT Ltd. It will result in the
termination of the agency. When the termination happens involuntary such as the death or the
insanity of the principles. The agent authority may end automatically, regardless of whether
the third party has been aware of this or not. In this case the third party has no remedy against
the principal and can only sue the agent for the breach of the warranty of the authority.
Answer to Question 4 – Learning Outcome 5 (30 marks)
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Coursework assignment answer template
M05
wAssiPart (a)
People generally purchase the life insurance policy to financially guard their loved ones
in the occurrence of our death. Securing a life insurance policy is a reasonable way to secure
the family financial future (Best, Barnes, and Kahn-Fogel 2018). An insurance contracts will
be effective only when the parties have agreed on the terms of the contract, such terms is
based on the
 Nature of the risk and the matter of the insurance like what are the things that have
been insured, and what threats have been covered.
 The duration of the contract, and
 The amount of premium (approaches by which the amount of premium has been
calculated).
Life insurance can be taken for the family members like father, brother, sister, spouse and
friend on the fulfillment of the several factors like
Presence of the Insurable interest
The acquirer of the policy have to demonstrate that there happen an insurable interest
among brother and sister. A liaison based on the blood may deliver the basis for the insurable
interest. Insurable interest will happen even when the acquirer will experience the economic
loss when the sibling die. Insurable interest is mandatory, so that the decease of the insured
will not generate individual gain for the policy holder. Permitting anybody to own the life
insurance on anyone could possibly lead to deliberate harm or even demise, in order to get
the LIC Lump sum payment.
Availability of the Consent
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Coursework assignment answer template
M05
wAssiConsent must be acquired by the policy acquirer by the sibling about the life
insurance policy on their life. Life insurance corporations must also have the right to examine
the medical past of the insured person.
The insurable interest is require to reduce the moral hazards and discourage wagering.
Moral hazard rises when the surrendering of the insurance really increases the probability of a
loss happening, because it deviates the encouragements and performance of the insured.
Following basic information is required in case of the insurance policy cover:
 personal information
 Medical history
 Prescription history
 Family health history
 Income
 Smoking status
 Habits and hobbies
 Foreign travel frequency
 Other life insurance policies in force and the amount of coverage.
The policy owner can be taxed on the life insurance benefit if the insured, owner and
beneficiary are three different people.
The insured – This is the person covered by the life insurance policy, his or her death will
result in a death benefit payout.
The owner – They are the person who usually pay for the policy. He hold the right to the life
insurance contract.
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