BPP University College Of Professional Studies Limited (BPP)
I achieved a High Distinction on the LPC at BPP (London Holborn) using these notes and used them to secure a job and a training contract at a well-known FTSE 100 company. The LPC is all about having a good set of notes and learning them. Using these notes, you will have all of the key information...
BPP University College Of Professional Studies Limited (BPP)
Legal Practice Course
Insurance Law
All documents for this subject (1)
6
reviews
By: sebrina13 • 1 year ago
By: lukebell3009 • 2 year ago
By: kennynart • 2 year ago
By: TS2434 • 2 year ago
Nothing on fraud in these notes, only 1 page on averages calculations for SGS 6/7
By: hollyeastwood • 2 year ago
By: Blumerzz • 2 year ago
Hi Holly,
Thank you for your review - I hope your exams went well!
Thanks,
CB
By: zarmane_dogar • 3 year ago
By: Blumerzz • 3 year ago
I’m sorry that you felt that the notes were only 3 stars.
As I offered in our exchanges, happy to discuss any concerns over the phone if you haven’t already sat your exam. I am an Insurance Lawyer in practice now so happy to help!
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EXAM
2 weeks prior – reading in advance of exam
5 x MCQ = 15 marks
5 – 6 x LFQ = 85 marks
BIG QUESTION SGS 8 – Report to Client formulaic
Write out 2 – 3 page letter
, SGS 1 – INTRODUCTION TO INSURANCE LAW (2)
WHAT IS INSURANCE?
• Transfers RISK from insured to insurer for price to provide SECURITY in the event of loss
• Contractual relationship
o Policy holder (‘insured’) pays sum (‘premium’) to another (‘insurer’) who in turn agrees to
pay sum / benefit on occurrence of specific event (‘insured event’)
• Spreading Loss
o Multiple parties pay ‘premium’ into insurers ‘pool’ which is then used to pay out on claims
PROFIT
Shareholders / Mutual Insures (owned by policy holders
resulting in discounted premiums)
PURPOSE OF INSURANCE
• Transfers risk / Spreads loss
• Provides security to insured
o Peace of mind (Business + Customers)
o Financial security
o Renting capital – in exchange for a premium to meet unexpected cost
• Risk management – to reduce frequency + severity of claims = reduced premium
PURPOSE OF PREMIUM
• Consideration for contract
• Principal source of income for insurer
• To ensure sufficient ‘pool’ to pay claims + generate profit
INSURANCE MARKET (PARTIES)
• Insured = Buyer
o Companies / Private individuals / Trade Unions / Professionals
• Intermediary
o Broker = typically have specialist knowledge of specific risks + relationship with
specialised insurers (e.g. aviation)
o Agent = representative of insurers
• Insurer = Seller
o Lloyd’s Syndicates (Corporate Members / Individuals)
, o Companies (Owned / Controlled by shareholders)
o Mutuals
▪ Owned by policyholders that take share of any profit made payment /
deducted premiums
▪ Mutual Indemnity Association – trade members with specialist policies
o Captives
▪ subsidiaries of large multinational corporation that exclusively write
insurance needs of parent company
• Reinsurer = Can have reinsurance policy sellers only (1/3 of Lloyds Market)
CONTRACT OF INSURANCE (Based on principles of contract)
1) Proposer completes proposal form
• Specific questions to enable insurer to assess risk
2) U/W assesses risk
• historical evidence on claims / perceived risks (underwriters)
o likelihood (frequency) of the event occurring; AND
o associated costs of that event (severity)
• Insurer must quantify risk correctly to charge premiums that are sufficient (but
competitive) to cover claims of the few
3) Quote / Decline
4) Premium payment
CLASSES OF INSURANCE
• Property = General term to describe all ins. that covers loss or damage to property
o Fire / Home / Contents / Car / Aviation / Marine
• Business Interruption
• Liability (Negligence / Statutory Duties / Breach of Contract)
o Directors & Officers
o Employers Liability
o Professional Indemnity (Errors & Omissions Insurance)
o Public Liability (Legal costs + compensation for property damage / personal injury
suffered by members of public as a result of a business’ activities)
o Product Liability
• Fidelity = to protect employers from fraud by their staff
• Personal
o Accident
o Motor (5%)
▪ s143 RTA 1988: requires drivers to have insurance against 3rd party risks
▪ 3rd Party / Fire / Theft / Comprehensive
o Life (illness / loss of employment)
Negative consequences of not having insurance
• Lack of investor interest
• Poor risk management
• Clients nervous of doing business
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