You are a claims handler for an insurer specialising in commercial insurance. One of the policyholders is a large manufacturer with an annual turnover of 5.2 million last year. It has a multi-risks policy, which includes buildings and contents cover for a number of factory sites and its head office. The policyholder notifies you of a claim for fire damage to one of its production plants. The fire started when a machine on the production line overheated. While investigating the claim, you discover the following:

One of the two company directors had been convicted of invoice fraud five years ago and received a three-year jail sentence, half of which was suspended. This had not been disclosed.

The machine had been altered by the company engineer to increase production speed and the work had not been approved by the manufacturers.

The policy covered materials in the storeroom that were also damaged in the fire. These are owned by another company. This company is owned by one of the directors.

PLEASE GO INTO DETAIL ON EACH PART OF THE QUESTION (A,B&C) ITS A 30 MARK QUESTION !!!!!!!!!!!!!!!!!!!!!

a) Discuss the effect of the non-disclosure on the policy. (14 marks)

b) Discuss the impact of the alterations to the machine on policy coverage. (8 marks)

c) Explain, citing relevant case law, whether the loss of the materials is covered. (8 marks)