Answer

Insurance: Question One

Insurance is one of the most comprehensive branches of English law. It mainly dictates the acceptable relationship and conduct that exists between an insurer and an insured. For the purpose of this paper, the concepts of policy and premium are vital. An insurance policy denotes a document that details the terms and conditions of an insurance contract. Alternatively, the insurance premium is the sum of money that one must pay for a particular insurance policy.

Legal Obligation

Briefly, ABC Plc is an insurance company; it entered into a legal contract with a policy holder to cover a particular property at a year 300-pound premium. However, it was later discovered that the sum had been miscalculated and the policy holder is, in fact, required to pay an annual premium of 415 pounds. Naturally, ABC Plc will require the policy holder to pay the additional sum of 115 pounds. Regardless, there are variable reasons why the policy holder has no legal obligation to pay the higher premium.

Firstly, the policy holder and ABC Plc have already entered into a legally binding contract. One of the most imperative elements of a contract is compensation (Khorooshi et al., 2017). In this particular case, the amount stipulated in the insurance contract under compensation is 300 pounds. Therefore, the policy holder is only legally bound by this contract, and hence, the sum that is stipulated in this contract. He/she is not legally obligated to pay the additional sum of money.

Secondly, the duration for which the coverage lasts has not yet ended. This means that the initial agreement that the insurer and the insured entered into legally covers a period of one year. Therefore, the policy holder is only legally obligated to pay an insurance premium of 300 pounds to cover the entire years. The insurer has no legal right to demand more money from the policy holder before this period ends. As a result, the policy holder has no legal obligation to pay the full 415 pounds annual premium instead of the miscalculated 300 pounds annual premium since the insurance policy remains valid for a given duration of time.

Relevance of the Claim

Succinctly, the insurance policy was formulated on 1^st December 2016 with the agreement that the premium should be paid by 1^st January 2017. However, an insured incident transpired on 15^th December 2016, after which the insurance company was notified. It is considerably relevant to the claim that the policy holder is yet to pay the premium.

In definition, an insurance premium denotes the sum of money that one pays to acquire and sustain an insurance policy. Importantly, the insurance company views the insurance premium as income; it is a representation of a liability whereby the insurer has a legal mandate to provide coverage for claims that the policy holder makes against the policy (Burling, & Lazarus, 2012). In this particular context, while the policy holder made a claim for coverage against the policy, he was yet to pay the required premium to cover this claim. This makes it relevant to the claim that the policy holder was yet to pay the premium to impose a liability on ABC Plc.

The purpose of the premium is to impose a liability on the insurer. Liability refers to the state of having a legal responsibility for something. Through the premium, ABC Plc would be legally obligated to cover any claims that the policy holder makes against the insurance policy. Currently, however, the insurance contract is not yet complete since there has been no compensation made by the policy holder to ABC Plc. A complete insurance contract or policy is evidenced by the initial payment of the first annual premium to the insurance company. The claim that the policy holder has made to the insurance company is not entirely valid and can therefore, be disputed in a court of law.

Conclusively, insurance law is considerably intricate. There are several issues that may emerge in various circumstances in the relationship between the insurer and the insured. Some of the established facts, however, are that the insured must pay premium for the insurer to cover any claims against the policy.