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Published Date

September 2010

Property Insurance Law and Claims

(Excludes any applicable taxes)

This new edition of the previously entitled ‘Fire Insurance Law and Claims’ has been updated by CILA to reflect many variations to the law and the introduction of new regulations.

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This book will be of benefit to all parties involved in the handling of claims. It examines the contract of insurance, insurable interest and indemnity, perils, subrogation and distribution of recoveries, the Financial Ombudsman Service and the Financial Services Authority. It provides practical advice together with a checklist for handling insurance claims. The importance of the legal aspects of the loss adjuster’s role cannot be understated. The addition of co-writers from DAC Beachcroft Solicitors makes this book a comprehensive guide to the profession of loss adjusting.


Chapter 1        Principles of Law

                        1.1       Sources of Law

                        1.2       Principles of General Contract Law 

Chapter 2        The Parties

                        2.1       The Policyholder

                        2.2       Insurance Companies

                        2.3       Lloyd's of London

                        2.4       Co-Insurers

                        2.5       Reinsurers

                        2.6       Insurance Brokers/Intermediaries

                        2.7       Underwriting Agencies

                        2.8       The Financial Services Authority (FSA)

                        2.9       Financial Ombudsman Service (FOS)

                        2.10     Loss Adjusters

                        2.11     Loss Assessors

                        2.12     Lawyers

                        2.13     Supply Chain

Chapter 3        The Contract of Insurance

                        3.1       The Prospectus

                        3.2       The Proposal Form

                        3.3       The Schedule of Insurance

                        3.4       The Policy of Insurance

                        3.5       Practical Tips on Dealing with Exclusions and Breaches of Warranty                                    and Condition

                        3.6       Customer Care and Complaints
Chapter 4        Insurable Interest and Indemnity

                        4.1       The Creation of Insurable Interest as a Statutory Requirement

                        4.2       The Indemnity Principle

                        4.3       Legislative History

                        4.4       Situations Where the Interests of More than One Party are                                                 Affected

                        4.5       Indemnity 

Chapter 5        Perils

                        5.1       Fire

                        5.2       Lightning

                        5.3       Explosion

                        5.4       Riot

                        5.5       Malicious Damage

                        5.6       Escape of Water

                        5.7       Escape of Fuel Oil

                        5.8       Storm

                        5.9       Flood

                        5.10     Accidental Damage to Underground Services

                        5.11     Theft

                        5.12     Accidental Damage

                        5.13     Subsidence, Heave and Landslip

Chapter 6        Proximate Clause

                        6.1       Statute Law

                        6.2       Operation of the Doctrine

                        6.3       Ascertaining the Proximate Cause

                        6.4       Immediate and Intervening Causes

                        6.5       Concurrent Causes

                        6.6       Financial Ombudsman Service

                        6.7       Summary

Chapter 7        Utmost Good Faith

                        7.1       The Origins of Utmost Good Faith

                        7.2       Non-Disclosure and Misrepresentation

                        7.3       Material Facts

                        7.4       Facts that do not Need to be Disclosed

                        7.5       Inducement

                        7.6       Avoidance of the Policy

                        7.7       Waiver and Estoppel

                        7.8       Continuation of the Duty of Disclosure after the Policy Incepts

                        7.9       Approach of the FSA and FOS to Utmost Good Faith 

Chapter 8        Fraud

                        8.1       What is Fraud

                        8.2       Burden of Proof

                        8.3       Categories of Fraudulent Claim

                        8.4       The Effect of Fraud

                        8.5       Joint and Composite Policies

                        8.6       The FOS
                        8.7       Fraud Indicators and their Investigation

Chapter 9        Measures of Settlement

                        9.1       Policy Limits and Excesses

                        9.2       Basis of Settlement Provisions

                        9.3       The Cost of Establishing the Extent of Loss

                        9.4       Buildings – Measure of Settlement

                        9.5       Provisional Sums and Prime Cost items

                        9.6       Public Authorities Clause

                        9.7       Debris Removal

                        9.8       Insurers' Right to Reinstate

                        9.9       Building Repair Networks

                        9.10     Non-Buildings – Measure of Settlement

                        9.11     Extended Warranties

                        9.12     Salvage

                        9.13     Costs of Mitigation

                        9.14     Underinsurance

                        9.15     Day One Basis

                        9.16     Index Linking

                        9.17     Penalties for Underinsurance

                        9.18     Practical Guidance for Calculating the Value at Risk

Chapter 10      Double Insurance and Contribution

                        10.1     Double Insurance

                        10.2     Where Double Insurance can Arise

                        10.3     Restrictions/Limitations on Double Insurance

                        10.4     Contribution

                        10.5     Determining the Amount of Contribution

                        10.6     Authority for Method

                        10.7     ABI Rules on Contribution

Chapter 11      Subrogation and Distribution of Recoveries

                        11.1     Subrogation

                        11.2     Distribution of Recoveries

Chapter 12      Financial Ombudsman Service

                        12.1     Authority of the Financial Ombudsman Service

                        12.2     Who is Entitled to Make a Complaint to the FOS

                        12.3     Complaint Handling Rules

                        12.4     Time Limits

                        12.5     Adjudication

                        12.6     The Loss Adjuster's Role in FOS Investigations

                        12.7     Decisions Made by the FOS

                        12.8     Awards

                        12.9     Compliance with Awards and Settlements

                        12.10   General Services Provided by the FOS

Chapter 13      The Financial Services Authority

                        13.1     Role of the FSA

                        13.2     Regulation of Insurers

                        13.3     Regulation of Loss Assessors
                        13.4     Consumer Rights

                        13.5     Insurance: Conduct of Business Sourcebook

Chapter 14      Reform of Insurance Law

                        14.1     Background

                        14.2     Consumer Insurance (Disclosure and Representations) Bill 2009

                        14.3     Implementation and Future Reform

Chapter 15      Health and Safety and Construction (Design and Management)                                           Regulations 2007

                        15.1     Health and Safety at Work etc Act 1974

                        15.2     Management of Health and Safety at Work Regulations 1999

                        15.3     Risk Assessment

                        15.4     Construction Projects Subject to the Regulations

                        15.5     When Duties Arise and Upon Whom

                        15.6     Duties on a Client

                        15.7     Duties on a Designer

                        15.8     Contractor Competency

                        15.9     Health and Safety Executive (HSE)

Chapter 16      Practical Hints and Tips

                        16.1     Reporting to Insurers

                        16.2     Waiver, Estoppel and Reservation of Rights

                        16.3     Repudiations

                        16.4     Mitigation of Loss

                        16.5     Dealing with Policyholders' Claims

                        16.6     Who Should the Settlement Monies be Paid to?

                        16.7     Forms of Discharge/Settlement Agreements

                        16.8     Investigations

                        16.9     Witness Statements

                        16.10   Status of Correspondence – Privilege, Without Prejudice and                                  Confidential Communications

Chapter 17      Checklist for Handling Insurance Claims


Fire Loss Adjusters have become Property Adjusters, covers have broadened, and the law has developed. It is therefore time to update and extend John Peverett’s landmark work. It was, in many ways, fitting that Malcolm Hyde should take on this task, for Malcolm began his career with Commercial Union and is now the Executive Director of CILA. This book represents a further 2 years of work by Malcolm in bringing this subject up to date, which was primarily done before he joined the Secretariat of CILA. In this task, Malcolm recognised the substantial benefits of bringing co-authors Brendan McCarthy and James Deacon of Beachcroft LLP to the project.

Beachcroft LLP work closely with the Institute’s Property Special Interest Group and we are especially grateful to them, in particular for their advice on legal issues and case law.

Although this book has been sponsored by CILA, it is not advanced as best practice, nor is it the definitive answer upon any specific subject. Rather, it is a practical handbook for the working adjuster and will, I trust, stand the judgement of those who read it both now and in the future, as did its predecessor volume.


The Chartered Institute of Loss Adjusters (CILA) is a globally recognised membership organisation for claims professionals. The Institute sets the professional and ethical standards for those who work in the handling of claims through its qualification framework and guide to professional conduct.

James Deacon

James is a partner at DAC Beachcroft and specialises in insurance litigation. He is involved in a wide range of policy coverage disputes, acting for property, public and products liability insurers. James also has considerable expertise in advising on the drafting of a broad range of insurance policies, including household, property and commercial combined.

Malcolm Hyde

Malcolm Hyde BSc (Hons) DIP (Fr) FCII FCILA FUEDI-ELAE FIFAA is the Executive Director of CILA. Malcolm has worked as a Chartered Loss Adjuster in loss adjusting practices. His main loss adjusting experience has been in Property Claims. Since 1994, Malcolm has been involved in the education and training of Loss Adjusters.

Brendan McCarthy

Brendan was a partner at DAC Beachcroft between 2006 and 2012.


Witherbys titles are developed using scripts developed by technical experts that are peer reviewed within work groups. Typically, they seek to improve understanding of the regulations, recommendations and guidelines issued by Industry.

Witherbys staff have significant expertise in the fields of navigation and hazardous cargoes as well as in the presentation of complex subjects in a graphic and easy to understand manner.

Title: Property Insurance Law and Claims
Subtitle: CILA
Number of Volumes: 1
Edition: First
Number of Pages: 399
Product Code: WS1255K
ISBN: ISBN 13: 978-1-85609-406-1 (9781856094061), ISBN 10: 1-85609-406-5 (1856094065)
Published Date: September 2010
Binding Format: Hardback
Book Height: 240 mm
Book Width: 160 mm
Book Spine: 30 mm
Weight: 1.20 kg

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