2026 E05 exam torrent E05 Study Guide [Q20-Q44]

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2026 E05 exam torrent E05 Study Guide

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CII E05 Exam Syllabus Topics:

Section	Objectives
Insurance Contract Formation	– Offer, acceptance, consideration, and intention to create legal relations – Policy wording and interpretation
Liability and Tort Law	– Occupiers’ liability – Negligence principles – Vicarious liability
Principles of Insurance Law	– Nature and purpose of insurance law – Fundamental legal principles affecting insurance contracts
Claims and Remedies	– Fraud and avoidance of policies – Claims handling process – Subrogation and contribution
Key Legal Principles in Insurance	– Insurable interest – Disclosure and misrepresentation – Warranties and conditions – Utmost good faith (uberrimae fidei)

NEW QUESTION 20
Why may an insurer insert a continuing warranty into an insurance policy?

To ensure that underinsurance is avoided at all times.

To enable an insurer to charge an additional premium if the warranty is continually breached.

To maintain the annual aggregate limit of liability throughout the policy period.

To encourage good risk management by the insured throughout the policy period.

NEW QUESTION 21
When, if at all, does the duty of fair presentation of a risk apply after a non-consumer insurance contract has been formed?

From the date of a breach of warranty.

It does not apply as the duty is to take reasonable care not to make a misrepresentation.

Where there is a variation in the insured risk.

On submission of a claim.

NEW QUESTION 22
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 person holding a dominant position over Liz.

Liz’s independent financial adviser.

Liz’s husband.

a person holding a senior position at Liz’s bank.

NEW QUESTION 23
What is the intended purpose of a subrogation waiver clause in an insurance po

The doctrine of subrogation is excluded from the policy.

The insured has a duty to ensure that the insurer’s subrogation rights are maintained.

Cover is suspended whilst the insurer pursues an action for subrogation.

The insurer’s subrogation rights will not be exercised against certain parties associated with the insured.

NEW QUESTION 24
A claimant may possibly recover money transferred under an illegal contract when

the illegality makes the contract voidable rather than void.

both parties to the contract are equal in wrongdoing.

the contract is against public policy but not substantive law.

the legal portion of the contract can be severed from the illega portion.

NEW QUESTION 25
In terms of private motor insurance, a renewal offer can be accepted

by the proposer acting in reliance of the offer.

only by written communication.

only by the proposer personally.

by any third party.

NEW QUESTION 26
When a defendant deliberately destroys possessions belonging to someone else, he has committed the tort(s) of

trespass to goods, conversion, nuisance and battery.

trespass to goods and conversion only.

trespass to goods, conversion and nuisance only,

trespass to goods only.

NEW QUESTION 27
For this question more than 1 option is correct. You must select all the correct options to gain the mark. What are the main sources of new English Law?

International treaties.

Case law.

Legislation.

Official law reports.

NEW QUESTION 28
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?

When fraud or arson by the insured is suspected.

Where the building was destroyed by an explosion.

Where there is underinsurance.

Upon the request of any person(s) interested in the buildings.

NEW QUESTION 29
Insurance agencies are usually created by way of

implied agreement.

unilateral agreement.

express agreement.

deed of agreement.

NEW QUESTION 30
Who is entitled to the surplus if a subrogation recovery from a negligent third party is greater than the amount the insurer has paid to the insured?

The insured only.

The insurer only.

The State

It is shared between the insurer and the insured.

NEW QUESTION 31
The test of the materiality of facts in an insurance contract is defined according to the opinion of a

prudent underwriter.

diligent broker.

reasonable person.

honest proposer.

NEW QUESTION 32
Two liability policies with different insurers cover the same loss of £15,000,000. The limit of liability is
£10,000,000 under policy X and £20,000,000 under policy Y. Neither policy has a non-contribution clause.
What amount will policy Y contribute towards the claim payment?

£5,000,000

£7,500,000

£9,000,000

£10,000,000

NEW QUESTION 33
What is the maximum contingency fee percentage under a damages-based agreement that can be charged by a solicitor for personal injury cases and employment tribunal cases respectively?

35% for personal injury cases and 25% for employment tribunal cases.

25% for personal injury cases and 35% for employment tribunal cases.

35% for both cases.

50% for both cases.

NEW QUESTION 34
For this question more than 1 option is correct. You must select fill the correct options to gain the mark. In what circumstances would an agency agreement be automatically terminated?

Disclosure of the name of the principal.

Bankruptcy of the principal.

Bankruptcy of the agent.

Death of the agent.

NEW QUESTION 35
Which divisional court of the High Court includes a Commercial Court?

Queen’s Bench Division.

Partnership Division.

Chancery Division.

Family Division.

NEW QUESTION 36
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?

It is an organisation with a separate legal existence to its membership.

It is not treated as a separate legal entity.

It is answerable to its shareholders or members.

It is a legal person representing one official position.

NEW QUESTION 37
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?

Pay the claim in full.

Reject the claim for breach of warranty.

Make an ex-gratia payment.

Avoid the policy ab initio.

NEW QUESTION 38
A breach of warranty under the general law of contract legally entitles an injured party to

claim damages.

avoid the contract from the date of the breach.

obtain specific performance.

avoid the contract ab initio.

NEW QUESTION 39
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?

£3,000

£5,000

£6,000

£15,000

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