Testing PIFEL

1.

1 point

The liability of the partners in a partnership is BEST described by which of the following?

Any liability arising from the services provided by the partnership is the responsibility of any of the partners regardless of who is responsible for the loss.

The liability of the partners for any loss is allocated equally between them.

Only the partner whose actions have led to the liability is responsible for the loss.

The partners are collectively responsible or any of the partners may be liable individually regardless of which partner was the cause of the loss.

2.

1 point

An entity that accepts business on behalf of insurance companies or Lloyd’s Underwriters is called:

A mutual association.

An assigned risk pool.

A Managing General Agent.

A captive insurance company.

3.

1 point

A Retroactive Date on a Professional Indemnity Policy provides:

An exclusion of claims made during the current period of insurance in respect of work undertaken prior to the period of insurance.

An extension of cover to provide for claims made during the period in respect of circumstances of which the Insured was aware in a prior period of insurance.

An exclusion of claims in any subsequent period of insurance in respect of work undertaken during the current period of insurance.

An extension of cover to provide for claims made against the Insured after the period of insurance in respect of work undertaken during the period of insurance.

4.

1 point

Which of the following would NOT appear in the Deeming Clause of a Professional indemnity Policy relating to the notification of circumstances? A requirement that the Insured shall as soon as practicable notify the Insurer of any:

Circumstances that will inevitably produce a claim.

Circumstances that are more likely than not to produce a claim.

Circumstances that are likely to produce a claim.

Circumstances that may give rise to a claim.

5.

1 point

Which of the following is true of awards made by The Financial Ombudsman Service (FOS)?

The Financial Ombudsman may make an award on the basis of what is fair and reasonable taking into account the relevant law and standards and codes of practice

The extent of cover provided by Professional Indemnity Insurers is limited to the amount of the award for which there would have been liability to pay damages awarded by a court.

Having accepted an award made by FOS a successful complainant may pursue an action for damages in the civil courts.

The Financial Ombudsman may only make an award in accordance with strict legal precedence.

6.

1 point

Which of the following types of Professional Indemnity policy would normally have an extension to cover Mitigation Costs?

Insurance Brokers

Auctioneers

Design and Build Contractors

Beauty Therapists

7.

1 point

A firm of architects work in an office that they have designed. Due to a fault in the design a part of the building collapses. A client who is visiting the office and a passer-by are injured as a consequence. They successfully claim against the firm. The firm have Professional Indemnity and Public Liability policies. Which policy or policies will apply?

Public Liability

Neither policy.

Both policies

Professional Indemnity

8.

1 point

Professional Indemnity Policies exclude liability that the Insured has assumed under an agreement, but with an exception to the exclusion in respect of liability:

that must be insured by virtue of an Act of Parliament.

arising from an unintentional act.

for which the Insured would have been liable in tort.

that results from an award made by an ombudsman.

9.

1 point

Which of the following is NOT an innominate condition of a Professional Indemnity policy?

Notification of Claims Condition

Discharge of Liability Clause

Subrogation Condition

Contribution Condition

10.

1 point

A policy issued by Insurer A has a Limit of Liability of £15m. It is called into contribution with a policy issued by Insurer B which has a Limit of Liability of £10m. The claim is for £5m. How much would Insurer A have to pay?

£2,000,000

£5,000,000

£2,500,000

£3,000,000

11.

1 point

Which of the following is an implicit term of a contract entered into by a professional to provide services?

The contract will be completed by an agreed date.

The professional will act with reasonable skill and care.

The professional will indemnify the insured for any losses that may arise.

The professional will be liable for no more than the limit provided by their Professional Indemnity Insurance.

12.

1 point

Damages may be awarded for distress and vexation arising from breach of contract where:

The damages are exemplary.

There are no public policy issues involved.

The claimant has suffered a psychiatric injury.

The contract was to provide pleasure and relaxation.

13.

1 point

The standard of care required of an insurance broker involved in placing Architects’ Professional Indemnity Insurance would be met if his actions were what would be expected of:

A prudent commuter on the London Underground.

Other brokers placing Architects’ Professional Indemnity Insurance

His client architects.

An experienced insurance broker placing a range of insurance.

14.

1 point

The decision in Hedley Byrne v Heller and Partners [1964] established that a professional may owe a duty of care:

To any third party who is reliant on his actions.

Where there is a special relationship through an assumption of responsibility by the professional.

Only to clients with whom he has entered a contract.

Where there is concurrent liability in both contract and tort.