English Insurance Contract Law

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English Insurance Contract Law:

To learn how to recognize insurance. How to distinguish insurance from comparable financial products. And to know when to comply with legislation regulating insurance. Also English Law on insurance contracts as it stands today contains some rules . Which are arguably pro-insurer and consequently highly prejudicial to the assured. Because these rules tend to defeat the very essence of insurance i.e. protection of the insured. For example an insurer is entitled to rescind an entire contract for non disclosure. Due to this is notwithstanding the fact that such non-disclosure or misrepresentation is minor. So that there is no causal link between the loss and the non-disclosure or misrepresentation.

As a result the English and Scottish Law Commissions have come up with a number of issues papers and proposals for reforms on some of these issues. Hence this paper will look at two of those areas which the Law Commission has examined, namely the duty of the assured as regards pre-contract disclosure and misrepresentation. Consequently the English and Scottish Law Commissions have recently issued their final report on these two issues and they have submitted a draft bill for reforms to the Legislature.

1.1 Introduction:

English courts do not define insurance but speak, for example, of “those who are generally accepted as being insurers”.Compare the United States, where insurance has been defined as a “contract whereby one undertakes to indemnify another against loss, damage or liability arising from a contingent or unknown event”; and where the primary elements are the shifting (or underwriting) of riskand the distribution (or spreading) of risk.

1.2 Description:

Therefore in England, an insurance contract has been described as a contract (below 1.2A) whereby a person (the insurer), usually in business as such, agrees to pay money (1.2B) on the occurrence of an uncertain and adverse event (1.2C), in return for payment called premium (1.2D).

Contract:An insurance contract must be a binding contract.5 Commonly it takes the form of an insurance policy; but in practice it may exist without a policy.

Money:Financial risk is transferred from A, the insured, to B, the insurer:6 B compensates A for what A may
have lost. In some cases, however, B pays (not money) but for A to receive benefits, such as the repair of property damaged, valuable adviceThus, in one leading case the judge said that “it is difficult to see why a contract to provide [medical] advice and assistance should not be a contract of insurance”.Fortuitous and Adverse Events:The occurrence of the event insured against must be fortuitous: uncertain at the time of the contract.

Premium:Insurance contracts usually require the insured to pay „premiums‟ in advance.

Table of Contents:

1:Insurance Contracts Defined
2:Insurable Interest: Life
3:Insurable Interest: Property
4:Third Party Rights
6:Contract Formation
8:The Policy
10:Exceptions To Cover
14:Illegal Insurance
18: Endnotes

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