Question 1

For this question more than 1 option is correct. You must select all the correct options to gain the mark. A proposer for private motorcycle insurance carelessly states the motorcycle's engine capacity as 500cc when in fact it is 1500cc. A policy is issued by the insurer on this basis. In the event of a valid claim causing damage to the motorcycle, what potential remedies are available to the insurer under the Consumer Insurance (Disclosure and Representations) Act 2012?

Options :

A : Reject the claim, but maintain the policy.

B : Reduce the claim amount in proportion to the premium it would have charged.

C : Apply any terms it would have applied if the misrepresentation had not taken place.

D : Avoid the contract, refuse all claims and keep the premium.

Answer: B,C

Question 2

What is the role of a condition precedent in an insurance policy?

Options :

A : It defines the scope of coverage for the policyholder

B : It is a requirement that must be met before the insurer is liable for a claim

C : It outlines exclusions from coverage

D : It ensures that the insurer will cover all risks associated with a policy

Answer: B

Question 3

A manufacturer was under contract to pay a supplier El .000 on receipt of the delivery of raw materials. However, the supplier failed to deliver and the manufacturer had to purchase identical materials from another supplier for £1,200. What amount of damages is the manufacturer legally entitled to claim from the supplier who failed to deliver?

Options :

A : £200

B : £1,000

C : £1,200

D : £2,200

Answer: A

Question 4

Which of the following is a characteristic of a contract of insurance?

Options :

A : It is always a contract of adhesion

B : It requires both parties to meet in person

C : It involves a promise of a return on investment

D : It must be written in a formal language

Answer: A

Question 5

What is the maximum contingency fee percentage under a damages-based agreement that can be charged by a solicitor for personal injury cases and employment tribunal cases respectively?

Options :

A : 35% for personal injury cases and 25% for employment tribunal cases.

B : 25% for personal injury cases and 35% for employment tribunal cases.

C : 35% for both cases.

D : 50% for both cases.

Answer: B

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