M05: Insurance law

Mixed assessment coursework – assignment

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Top tips for answering coursework assignments

• Read the Specimen coursework assignment and answer for this unit, available on the unit webpage.
• Read the Learning Outcome(s) and related study text chapter for each question before answering it.
• Ensure your answer reflects the context of the question. Your answer must be based on the figures and/or
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separately.

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M05/2024 M05: Insurance law 2
• Where a question requires you to address several items, the marks available for each item are equally
weighted. For example, if 4 items are required and the question is worth 12 marks, each item is worth 3
marks.
• Ensure that the length and breadth of each answer matches the maximum marks available. For example,
a 30-mark question requires more breadth than a 10 or 20-mark question.

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M05/2024 M05: Insurance law 3

Question 1 – Learning Outcome 2 (10 marks)

James has recently purchased a house. He works from his home and has an office in one of the bedrooms
of the house.
Since moving into his house, James has found that some of the neighbours are inconsiderate and he
complains that:
• His next door neighbour has several dogs which bark throughout the day, preventing James from working.
• Several neighbours leave bags of rubbish on the street, which attracts rats.

(a) Explain, with justification, the two most relevant torts which may apply to the circumstances
above. (6)
(b) Identify, with justification, two remedies most likely to apply should either or both of these torts be
established. (4)

Question 2 – Learning Outcome 3 (10 marks)

David, a motor mechanic, was asked to service a vehicle for Paulo. Paulo is a regular customer of David,
who has serviced Paulo's vehicles over many years.
David completed the service of Paulo's vehicle.
Before he returned the vehicle to Paulo, David fitted a new navigation device. After completion of the service,
David told Paulo that he had also fitted the navigation device and Paulo agreed to pay an additional £200 for
this work.
Paulo subsequently paid for the servicing of the vehicle but refused to pay for the fitting of the navigation
device because he had not agreed to that work in advance.
Discuss whether Paulo is legally obliged to pay David for fitting the navigation device. (10)

Question 3 – Learning Outcome 4 (10 marks)

Yves is a self-employed contracts manager who is used by AB Ltd, a property development company, to
source suppliers on its behalf.
Yves is asked by the Board of AB Ltd to liaise with NMO Ltd, a firm of architects, to obtain a quotation from
NMO Ltd, in relation to a large property that AB Ltd intends to develop.
Yves receives the quotation and instructs NMO Ltd to draw up a plan for the development and assist in the
planning process.
NMO Ltd agrees to take on the work and incurs considerable costs in producing a development plan and
seeking planning permission on behalf of AB Ltd.
AB Ltd refuses to pay the costs incurred by NMO Ltd. AB Ltd states that Yves had no authority to instruct
NMO Ltd to proceed with any work, without the consent of its Board.
Discuss whether AB Ltd is legally obliged to pay the costs incurred by NMO Ltd, in drawing up a
development plan and assisting in the planning process. (10)

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M05/2024 M05: Insurance law 4
Question 4 – Learning Outcome 5 (30 marks)
You are a claims handler for ZZ Ltd, an insurer that provides building and contents insurance for domestic
properties.
Safi owns a domestic property that is insured with ZZ Ltd for buildings and contents cover.
Safi moves out of the property and rents it to a close friend, Danny, on a part-furnished basis.
Subsequently, a flood occurs in the property causing a large amount of damage. Safi submits a claim to
ZZ Ltd for the damage to the building and for the damaged contents.
You have established that the following facts were not disclosed to ZZ Ltd:
• The change of occupancy from Safi to Danny.
• Safi was recently convicted of dangerous driving which occurred during the policy period but before the
flood.

You are asked to consider the validity of Safi's claim.

(a) Explain, with justification, the impact of insurable interest on the claim made by Safi for the
damage to the building and contents. Refer to one relevant case in support of your explanation. (12)
(b) Discuss the potential impact of the non-disclosed facts on the claim made by Safi. Refer to one
relevant statute in support of your discussion. (18)

Question 5 – Learning Outcome 6 (20 marks)

You are a claims handler for BB plc, a commercial insurer. One of BB plc's commercial insurance
policyholders, DGM Ltd, owns and operates a chain of hotels.
DGM Ltd has been a policyholder of BB plc for the last four years.
DGM Ltd has submitted a claim as one of its hotels has been destroyed in a fire. All of DGM Ltd's employees
and guests escaped unhurt. However, emergency vehicles were unable to access the premises immediately
as some of the guests' cars needed to be removed to gain access. You instruct a loss adjuster to investigate
this claim.
The investigation establishes that the fire was caused by a defective electrical system which was installed six
years ago. The electrical system has not been inspected since.
You are reviewing the terms of DGM Ltd's commercial insurance policy. The loss adjuster has highlighted the
following two terms in the policy wording:
• '.....all electrical systems to be inspected every five years by an approved contractor and that any electrical
defects be remedied forthwith in accordance with the applicable regulations'.
• '…..emergency vehicles should be able to access the premises at all times'.

BB plc rejects the claim stating that the commercial insurance policy is void due to DGM Ltd's failure to
comply with the above terms.
(a) Explain the legal classification of the terms, requiring the inspection of the electrical system and
the access of emergency vehicles, in the commercial insurance policy. (4)
(b) Discuss the validity of BB plc's statement that the commercial insurance policy is void due to DGM Ltd's
failure to comply with the terms of the:-
(i) Electrical systems inspection. (8)
(ii) Emergency vehicles access. (8)

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M05/2024 M05: Insurance law 5
Question 6 – Learning Outcome 7 (20 marks)
You are a claims handler for a motor insurer with whom Evie insures her vehicle.
Evie was involved in a minor collision on a country lane. Evie's vehicle hit a gate whilst swerving to avoid a
horse that had escaped from a field.
Evie took her vehicle to a local garage to be repaired. The garage is run by her brother who, at Evie's
request, inflated the amount of work required to repair the damage and included that in the written quotation.
Evie believes the horse's owner should be responsible for the damage to her vehicle, but they refuse to
accept responsibility. Therefore, Evie submits a claim to her motor insurer including the written quotation.
When investigating the circumstances of the claim, the insurer obtains photographs from the scene of the
collision. These photographs only show minor damage to Evie's car.
Upon further investigation, Evie's insurer finds out that the garage where Evie took the vehicle to be repaired
is run by her brother. Evie's insurer believes that Evie's claim is exaggerated and are questioning the
accuracy of the quotation.
(a) Explain the legal doctrine applicable to the circumstances resulting in the damage to Evie's
vehicle. (5)
(b) Explain, with justification, the impact on Evie's claim, if any, of the inflated written quotation. Refer
to one relevant case in support of your explanation. (9)
(c) Explain, with justification, the impact on Evie's policy, if any, of the inflated written quotation. Refer
to one relevant statute in support of your explanation. (6)

Question 7 – Learning Outcome 8 (20 marks)

You are an insurance broker.
One of your clients, Aleya, has a household insurance policy which provides cover for their property and
contents.
The property includes a garage, where Aleya keeps the following items:
• Antiques, including jewellery and glassware inherited from their grandmother.
• A top-of-the-range set of golf clubs contained in a golf bag, signed by a famous golfer.
• Household electrical equipment, including a television with an integrated video player.
• A sculpture by a local artist.

Aleya reported that a fire has occurred in the garage which has damaged its roof and the above items.
Aleya submits a claim under her policy and has asked you for advice.
Identify, with justification, the likely basis of indemnity in relation to Aleya's claim for damage to the:-
i. Garage roof. (4)
ii. Antiques. (4)
iii. Golf clubs and golf bag. (4)
iv. Household electrical equipment. (4)
v. Sculpture. (4)

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M05/2024 M05: Insurance law 6
Question 8 – Learning Outcome 9 (20 marks)
You are a claims handler for CC plc, an insurer.
You are dealing with a claim from Dwayne, one of CC plc's policyholders.
Dwayne's claim relates to extensive water damage to the ground floor of his house, that was caused by
faulty plumbing work undertaken by PB Ltd.
CC plc arranged for this damage to be repaired and the total cost was £20,000. CC plc met the cost of
repairs, less the policy excess.
CC plc is considering a right of action for recovery against PB Ltd.
(a) Discuss the extent to which CC plc are entitled to make a recovery from PB Ltd for the cost of the
repairs. (15)
(b) Explain what amounts, if any, might be recovered from PB Ltd. (5)

Question 9 – Across more than one Learning Outcome (30 marks)

You are a claims handler for TT plc, a professional indemnity insurer.
TT plc includes a scheme for lawyers.
One of the TT plc's policyholders is Lyra, a lawyer who solely practises in criminal law. At a party, Lyra's
friend, Simon, asked her for some legal advice regarding a house he was purchasing. Although this is not
Lyra's area of legal speciality, Lyra gave some legal advice to Simon at the party.
Simon now claims that Lyra's advice, which he relied upon, was incorrect and he has suffered a financial loss
of several thousand pounds. Simon is to claim this loss from Lyra.
Simon has taken every opportunity to tell friends and family, both verbally and through social media, that
Lyra is an incompetent lawyer. Lyra has lost several clients and has seen a downturn in new business. Lyra
wishes to claim for this loss of business directly from Simon.
(a) Discuss the extent of Lyra's legal liability in respect of the advice given to Simon. Refer to one
relevant case in support of your discussion. (12)
(b) Explain, with justification, the potential remedy available to Simon for his financial loss. (6)
(c) Explain briefly, the extent to which Lyra's professional indemnity insurance policy would cover
Simon's claim. (4)
(d) Discuss Simon's legal liability for Lyra's loss of business. (8)

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M05/2024 M05: Insurance law 7
Question 10 – Across more than one Learning Outcome (30 marks)
You are a claims handler for an insurance broker.
One of the insurance broker's clients, GG Ltd, is a courier company.
GG Ltd has notified you of the following:
• Tom, a 17-year-old, employed as a courier by GG Ltd, took a company electric bike to travel home. This is
forbidden by Tom's contract of employment with GG Ltd. However, it is common practice for couriers to
take electric bikes home.
• Whilst on the way home from work Tom is involved in an accident with another vehicle. This accident
caused injury to Tom, as well as damage to the electric bike and the other vehicle.
• Tom suffered a head injury but refused medical treatment at the scene of the accident.
• The police investigation states that the accident was caused by Tom.
• Tom was not wearing a helmet at the time of the accident.
• A week later Tom is tackled whilst playing rugby and collapses. Tom is rushed to hospital, with a bleed on
his brain, and dies shortly after.

(a) Explain the legal doctrine that is applicable to Tom's accident with the other vehicle. Refer to one
relevant case in support of your explanation. (8)
(b) Explain whether Tom's age has any effect on his contract of employment with GG Ltd. (4)
(c) Discuss the legal basis on which GG Ltd could be liable for Tom's death. Refer to one relevant
statute in support of your discussion. (12)
(d) Identify, with justification, two potential defences that GG Ltd may be able to rely on regarding any
potential liability it may have for Tom's death. (6)

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