[Feb 04, 2026] Easy4Engine M05 dumps & Insurance Law (M05) sure practice dumps
CII M05 Actual Questions and Braindumps
NEW QUESTION # 25
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. a condition precedent to liability.
- B. statute.
- C. a condition subsequent to liability.
- D. tort.
Answer: B
NEW QUESTION # 26
A nurse working shifts is regularly disturbed by her neighbour givig brass instrument lessons in Ihe evenings.
She is tired and losing concentration at work but is NOT at risk of losing her job. What remedy can be provided by equity as an alternative source of law to common law?
- A. Specific performance
- B. An injunction.
- C. Punitive damages.
- D. General damages.
Answer: B
Explanation:
In this case, the nurse is facing a disturbance from her neighbor, which is affecting her concentration and well- being. Aninjunctionis an equitable remedy that could be used to stop the neighbor from causing the disturbance, either temporarily (atemporary injunction) or permanently (apermanent injunction). This is often used to prevent ongoing nuisance or harm, like in this situation where the noise is impacting the nurse's ability to work.
Specific performance (A) would typically apply to compelling someone to fulfill a contractual obligation, not for stopping a nuisance. Punitive damages (B) and general damages (C) are not equitable remedies but are more common in common law for compensating harm or punishment.
NEW QUESTION # 27
What is the role of the Financial Ombudsman Service (FOS) in insurance disputes?
- A. It issues licenses to insurance companies
- B. It provides legal advice to insurers
- C. It regulates the pricing of insurance products
- D. It helps consumers resolve complaints with their insurers
Answer: D
Explanation:
The Financial Ombudsman Service (FOS) is an independent body that helps consumers resolve disputes with financial services, including insurance companies. It provides a neutral mechanism for dispute resolution.
NEW QUESTION # 28
A proposer for household insurance completes and submits an online application. When the insurer's website responds with a quotation based on the application, the quotation is most likely to be legally regarded as:
- A. an offer
- B. an acceptance of an offer
- C. an invitation to treat
- D. a counter offer
Answer: A
NEW QUESTION # 29
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 a legal person representing one official position.
- C. It is not treated as a separate legal entity.
- D. It is an organisation with a separate legal existence to its membership.
Answer: A,D
NEW QUESTION # 30
The principle of indemnity is the
- A. obligation of the insurer to provide a maximum sum insured or limit of liability.
- B. placing of the insured, after a loss, in the same financial position as enjoyed immediately before the loss.
- C. placing of the insured, at expiry of a policy, in the same financial position as enjoyed at inception.
- D. obligation of the insurer to pay all valid claims according to the terms and conditions of the policy.
Answer: B
NEW QUESTION # 31
Under UK insurance law, which document outlines the terms of the insurance agreement between the insurer and the insured?
- A. The proposal form
- B. The insurance policy
- C. The statement of fact
- D. The schedule of benefits
Answer: B
Explanation:
The insurance policy is the formal document that outlines the terms, conditions, and coverage of the insurance agreement between the insurer and the insured. It specifies the risks covered, exclusions, and other contractual details.
NEW QUESTION # 32
Which of the following is true about insurable interest?
- A. Insurable interest must always be proven at the time the policy is issued
- B. Insurable interest is only required for life insurance policies
- C. The policyholder must have a financial stake in the property or event insured at the time of loss
- D. The policyholder must have an interest in the property at the time of policy purchase but not at thetime of loss
Answer: C
Explanation:
interestrefers to the requirement that the policyholder must stand to suffer a financial loss from the event insured. In most cases, this must be proven at the time of loss, not just when the policy is issued.
NEW QUESTION # 33
Which of the following is a typical remedy for an insurer when the insured breaches a warranty?
- A. The insurer may cancel the contract or refuse to pay a claim
- B. The insurer can sue the insured for breach of contract
- C. The insurer is obligated to reduce the payout amount based on the breach
- D. The insurer must continue to provide coverage, but with an increased premium
Answer: A
Explanation:
A breach of a warranty is considered a serious violation in an insurance contract, and the insurer may have the right to cancel the contract or refuse to pay a claim based on the breach.
NEW QUESTION # 34
Tim is a local insurance broker. He has authority to receive premiums for a personal lines insurer and earns commission from the insurer for sales. Paul, an elderly customer, asked Tim for advice regarding his personal insurance requirements and to assist with completing the proposal form for household insurance. In these circumstances, who, if anyone, is Tim's principal?
- A. Paul as it is a consumer contract.
- B. Both the insurer and Paul at different times.
- C. The insurer at all times.
- D. No one as Tim is not a party to the insurance contract.
Answer: C
NEW QUESTION # 35
What is the role of a condition precedent in an insurance policy?
- A. It ensures that the insurer will cover all risks associated with a policy
- B. It is a requirement that must be met before the insurer is liable for a claim
- C. It defines the scope of coverage for the policyholder
- D. It outlines exclusions from coverage
Answer: B
Explanation:
A condition precedent refers to a requirement that must be met before an insurer is obligated to pay a claim.
Failure to meet this condition can result in the insurer not being liable.
NEW QUESTION # 36
In tort law, when, if at all. is a minor legally responsible for his acts?
- A. He is never responsible.
- B. He is only responsible if he is over 14 years of age.
- C. He is usually fully responsible.
- D. He is only responsible if a criminal ad has also been committed.
Answer: B
Explanation:
In tort law, minors (under the age of 18) may generally be held liable for their actions, but in certain situations, the court may consider the minor's age and maturity when determining responsibility. In some jurisdictions, the age of 14 is a key threshold for liability. However, it's important to note that this can vary depending on the specifics of the case and the jurisdiction.
NEW QUESTION # 37
What is the basis of settlement under a new for old insurance policy if a television is stolen?
- A. The original cost, less wear and tear.
- B. The replacement cost, less wear and tear.
- C. The original cost in full.
- D. The replacement cost in full.
Answer: B
NEW QUESTION # 38
Fraudulent claims invalidate the policy and the insurer is entitled to cancel the policy and deny any claims associated with it. Fraud is a serious violation under the principle of utmost good faith.
What is the purpose of the Doctrine of Insurable Interest in insurance contracts?
- A. To ensure that the policyholder has a financial stake in the insured item or person
- B. To prevent the insured from profiting from a loss
- C. To protect the insurer from excessive claims
- D. To protect the policyholder's right to make a claim regardless of their involvement
Answer: A
Explanation:
The Doctrine of Insurable Interest ensures that the policyholder has a legitimate financial or emotional interest in the person or property being insured. This helps to prevent fraudulent claims.
NEW QUESTION # 39
A professional indemnity policy includes a condition requiring that the insured must give prompt notice of any circumstance that could give rise to a claim. What type of condition is this?
- A. A suspensive condition.
- B. A condition precedent to the contract.
- C. A condition precedent to liability.
- D. A collateral condition.
Answer: C
NEW QUESTION # 40
What does the Consumer Insurance (Disclosure and Representations) Act 2012 require from consumers applying for insurance?
- A. Consumers must disclose all material facts honestly and accurately.
- B. Consumers must choose an insurer based on premium prices alone.
- C. Consumers are required to pay for claims made during the policy term.
- D. Consumers must answer questions about their past claims history.
Answer: A
Explanation:
Under the Consumer Insurance (Disclosure and Representations) Act 2012, consumers are required to disclose material facts that could affect the insurer's decision to provide coverage. However, unlike the previous law, it does not require consumers to disclose every fact, but only material facts.
NEW QUESTION # 41
What is the effect of a waiver on an insurance contract?
- A. It allows one party to ignore certain policy terms
- B. It allows the insurer to increase the premium
- C. It terminates the policy
- D. It reduces the policyholder's obligation to make full disclosure
Answer: A
Explanation:
A waiver in insurance law refers to the voluntary relinquishment of a known right, such as forgiving a breach of a condition in the policy. It doesn't cancel the contract but may alter certain terms.
NEW QUESTION # 42
What happens if an insured party fails to disclose a material fact during the application process for an insurance policy?
- A. The insurer may charge a higher premium
- B. The insurer may reduce the coverage limits
- C. The insurer may void the contract if the omission is deemed significant
- D. The insurer will continue to provide coverage without any adjustments
Answer: C
Explanation:
Failure to disclose material facts (facts that would influence the insurer's decision to offer coverage) can lead to the voiding of the policy under the principle of utmost good faith.
NEW QUESTION # 43
For this question more than 1 option is correct. You must select all the correct options to gain the mark. How may double insurance arise?
- A. The inadvertent non-cancellation of a policy when a new policy is taken out.
- B. A deliberate attempt to obtain the proceeds of two policies.
- C. An overlap in cover between two different types of insurance policy.
- D. A merger between two major insurance companies.
Answer: B,C
NEW QUESTION # 44
In a chain of events, the proximate cause of a loss is always the
- A. last event before the loss occurs.
- B. dominant event leading to the loss.
- C. only event which is not excluded by the terms of the policy.
- D. only event contributing towards the loss.
Answer: B
NEW QUESTION # 45
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. Statutory authority.
- C. Honest opinion.
- D. Privilege.
- E. Prescription.
Answer: C,D
NEW QUESTION # 46
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