M05/2021 M05: Insurance law

Sean, a professional racing cyclist, owns a garage where he stores his racing bicycles. The bicycles are insured under an all risks policy that includes the following: 'The locks to the garage must be maintained in full working order at all times'. 'Maintenance of the racing bicycles must be undertaken only by qualified racing bicycle engineers'. 'The policyholder should provide notice to the insurer of any claim as soon as reasonably possible'. Sean went abroad to train for several months. Whilst he was away, the locks to the garage were damaged by vandals. Martin, Sean's friend, tried to repair the locks but was only able to make a temporary repair, which meant the locks worked intermittently. Sometime afterwards, a number of Sean's racing bicycles were stolen from the garage. Two months later, Sean returned from abroad and upon discovering the theft made a claim for the loss of the racing bicycles. During the claim investigation it has emerged that Martin often cleaned and oiled the racing bicycles without Sean's knowledge. (a) Explain, with justification, the effect of the damage to the locks as well as Martin's cleaning and oiling of the racing bicycles on: (i) The policy. (6) (ii) The claim. (6) (b) Discuss the possible consequences of the delay in notifying the claim to the insurer. (8) M05/2021 M05: Insurance law