Chapter 22 Self-test questions

. Which of the following differentiates a contract of property insurance from a gambling contract? Please select all that apply.

The parties to an insurance contract,but not a gambling contract, owe one another a duty of utmost good faith.

Whether a bet is won or not under a gambling contract depends on the occurrence of an event which may or may not happen. With property insurance you can insure against events which are certain to happen.

The assured must have an insurable interest under a contract of insurance; a gambler need have no connection with the subject matter of the wager.

The assured can only recover the amount of his loss in an insurance contract, whereas a gambler will recover whatever the terms of the bet dictate.

. Which of the following statements is correct?

You cannot insure against a loss which has already happened.

You cannot insure against pure financial loss,such as a loss of profit.

You cannot insure against damage or loss of goods until you own them.

A marine cargo insurance will not cover losses which occur on land.

None of the options are correct.

. Which of the following statements is correct as it relates to the duty of fair presentation?

S3(4) Insurance Act 2015 requires the insured to disclose to the insurer all material circumstances which he knows or ought to know.

The insured need only disclose material about which the insurer has asked a question.

According to s7(3) Insurance Act 2015 a material circumstance is one which would influence the judgement of a prudent insurer in determining whether to take the risk and, if so, on what terms.

The only remedy for breach of the duty of fair presentation is avoidance of the insurance ab initio.

. Basis of the ___ clauses make the truth of everything disclosed to the insurer a warranty by the insured.

. Which of the following statements are correct? Please select all that apply.

In the event of a material non-disclosure before an insurance contract is concluded, the insurer's sole remedy is to avoid the contract and retain the premium already paid by the assured.

An insurer has to make sure the assured has understood what he needs to disclose

Under The Marine Insurance Act 1906 only non-disclosures which would have led the insurer to refuse to issue the policy were sufficient to allow the policy to be avoided for breach of the duty of utmost good faith.

Under The Marine Insurance Act 1906 the only remedy for material non disclosure was avoidance of contract.

. An assured may claim for a loss, the ___ cause of which is a risk covered under the policy.

. Is the following statement true or false? 'The Institute of London Underwriters Cargo Clauses covers loss or damage to goods caused by perils of the sea.'

True

False

. Which of the following causes of loss are not covered in an ICC(C) policy? Please select all that apply.

Fire

Sinking

Water

Collision

. Which of the following statements is correct?

ICC(A) is 'all-risks' cover, which means that the assured can claim for any damage however caused.

If a shipper fails to disclose a material fact to the insurer so that the insurer may avoid the policy against him the insurer may also avoid against an innocent purchaser of the policy and the goods to which it relates.

If the goods are shown to be unable to have endured the normal types of problems likely to be encountered during the insured voyage, then this proves inherent vice.

Loss through piracy cannot be covered under ICC(B) or (C).

. In a 'warehouse to warehouse' policy the insurance ___to the goods when they are first moved in the warehouse for immediate loading for the commencement of the transit.

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