[Nov 18, 2021] Get New E05 Practice Test Questions Answers
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NEW QUESTION 26
At what stage is insurable interest required for a marine cargo insurance policy?
- A. At inception of the policy only.
- B. Throughout the duration of the contract.
- C. At both inception of the policy and at the time of the loss.
- D. At the time of the loss only.
Answer: D
NEW QUESTION 27
The branch of law particularly relevant when handling negligence claims is
- A. administrative.
- B. civil law.
- C. public law.
- D. constitutional law.
Answer: B
NEW QUESTION 28
The principle of subrogation prevents a policyholder from profiting from
- A. assigning abandonment rights to the insurer.
- B. claiming under both his insurance policy and against any negligent third party.
- C. submitting a full claim recovery under more than one insurance policy.
- D. retaining salvaged property.
Answer: B
NEW QUESTION 29
Dan made a financial arrangement on behalf of Liz. However, Liz had the arrangement set aside by the court on the basis that she had been unduly influenced by Dan. To establish undue influence, the court must have specifically identified Dan as
- A. Liz's husband.
- B. Liz's independent financial adviser.
- C. a person holding a dominant position over Liz.
- D. a person holding a senior position at Liz's bank.
Answer: C
NEW QUESTION 30
John owns stock that he intentionally insured for £15,000, although the full value of the stock is £18.000. His insurance policy has no excess and is subject to a pro rata condition of average. In the event of water damaging
£6.000 of John's stock, how much will the insurer pay for a valid claim after the application of average?
- A. £5,000
- B. £6,000
- C. £3,000
- D. £15,000
Answer: A
NEW QUESTION 31
A warranty in Emily's personal travel insurance policy states that cash must be kept in a locked safe. Whilst on holiday, a storm destroys her hotel and its contents. When Emily completes a claim form for loss of money, she admits that her cash was NOT locked in the safe. What will be the insurer's likely response to her claim for the lost money?
- A. Make an ex-gratia payment.
- B. Avoid the policy ab initio.
- C. Reject the claim for breach of warranty.
- D. Pay the claim in full.
Answer: D
NEW QUESTION 32
For this question more than 1 option is correct. You must select ail the correct options to gain the mark.
In what circumstances does the Fires Prevention (Metropolis) Act 1774 require insurance companies to ensure that claims monies are used to rebuild or reinstate buildings destroyed or damaged by fire?
- A. When fraud or arson by the insured is suspected.
- B. Upon the request of any person(s) interested in the buildings.
- C. Where the building was destroyed by an explosion.
- D. Where there is underinsurance.
Answer: A,B
NEW QUESTION 33
In terms of private motor insurance, a renewal offer can be accepted
- A. by any third party.
- B. only by the proposer personally.
- C. only by written communication.
- D. by the proposer acting in reliance of the offer.
Answer: D
NEW QUESTION 34
For this question more than 1 option is correct. You must select all the correct options to gain the mark. Which special defences are available to the fort of libel?
- A. Necessity.
- B. Prescription.
- C. Privilege.
- D. Statutory authority.
- E. Honest opinion.
Answer: C,E
NEW QUESTION 35
For this question more than 1 option is correct. You must select all the correct options to gain the mark. In a consumer insurance policy, a warranty can arise as
- A. an exception clause.
- B. an express term.
- C. a continuing warranty.
- D. a basis of the contract clause.
Answer: B,D
NEW QUESTION 36
How can an agency relationship be best described?
- A. A person, who has paid another party under a contract, has the right to stand in the place of that other party and avail himself of the rights and remedies of that party.
- B. A person has ratified another party's action.
- C. A person has transferred his obligations under a contract to another party.
- D. A person has the authority to act on behalf of another party.
Answer: D
NEW QUESTION 37
For this question more than 1 option is correct. You must select all the correct options to gain the mark. What are the characteristics of a corporation aggregate?
- A. It is answerable to its shareholders or members.
- B. It is not treated as a separate legal entity.
- C. It is an organisation with a separate legal existence to its membership.
- D. It is a legal person representing one official position.
Answer: A,C
NEW QUESTION 38
As a result of a breach of good faith under a commercial insurance policy, the insurer avoided the policy as a whole, but was NOT permitted to retain the premium because
- A. the misrepresentation was innocent.
- B. the premium was paid by monthly installments.
- C. no claim had been submitted or paid.
- D. the misrepresentation was fraudulent.
Answer: A
NEW QUESTION 39
What is the intended purpose of a subrogation waiver clause in an insurance po
- A. The insured has a duty to ensure that the insurer's subrogation rights are maintained.
- B. The doctrine of subrogation is excluded from the policy.
- C. Cover is suspended whilst the insurer pursues an action for subrogation.
- D. The insurer's subrogation rights will not be exercised against certain parties associated with the insured.
Answer: D
NEW QUESTION 40
A riot results in a shop being damaged and the shopowner's insurer settling the claim. A subrogation right enabling the insurer to sue the police authority arises under
- A. statute.
- B. a condition precedent to liability.
- C. tort.
- D. a condition subsequent to liability.
Answer: A
NEW QUESTION 41
In the tort of negligence, a primary victim of nervous shock is a class of person who suffers psychiatric injury
- A. as a result of stress or harassment at work.
- B. through fear for his own safety in an accident.
- C. through fear for the safety of another person involved in an accident which he witnessed.
- D. as a result of grief or sorrow for the loss of a person with whom he had a close relationship.
Answer: B
NEW QUESTION 42
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?
- A. Reduce the claim amount in proportion to the premium it would have charged.
- B. Reject the claim, but maintain the policy.
- C. Avoid the contract, refuse all claims and keep the premium.
- D. Apply any terms it would have applied if the misrepresentation had not taken place.
Answer: A,D
NEW QUESTION 43
The proximate cause of a loss is best described as the
- A. most remote cause of the loss.
- B. final peril to cause the loss.
- C. first peril to cause the loss.
- D. most dominant cause of the loss.
Answer: D
NEW QUESTION 44
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