Insurance Law
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In March 2004, Cassandra set up in business as a sole trader offering various video-related services from leased studio premises located in South Belfast. In April 2006, she formed Picture This Ltd and, in consideration of the transfer of the business and its assets, including the leased studio premises, to the company, she was issued with 30,000, £2 shares in Picture This Ltd. Cassandra was the sole shareholder and director; she signed a contract of employment with Picture This Ltd and received a salary of £20,000 p.a.
In October 2007, she gave the company a loan of £12,000 to be used to finance new audio equipment. The loan was secured by a floating charge over the company's assets. In February 2008, a gas explosion resulted in Cassandra receiving severe burn injuries to her face, arms, hands and legs; the studio was also extensively damaged in the blast. Cassandra's insurance policy on the building and contents was taken out in her name in March 2004.
In May 2008, although has company was operating with modest financial success, Cassandra decided that, in view of her long-term injuries, she would seek early retirement and dissolve Picture This Ltd.
Advise Cassandra on the following:
(a) Her right to claim under her insurance policy for the fire damage to the studio;
(b) Her right to claim as a secured creditor in respect of her floating charge; and
(c) Her claim against Picture This Ltd for compensation for her injuries.
Any help given is greatly appreciated! I am basically confused with what Cassandra is able to claim. By being the main shareholder and director is she able to claim for her loss or will it be the company that will gain? Nothing I have researched has helped so far.
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Solution Summary
Insurance law as applied to business is discussed in this solution.
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In March 2004, Cassandra set up in business as a sole trader offering various video-related services from leased studio premises located in South Belfast. In April 2006, she formed Picture This Ltd and, in consideration of the transfer of the business and its assets, including the leased studio premises, to the company, she was issued with 30,000, £2 shares in Picture This Ltd. Cassandra was the sole shareholder and director; she signed a contract of employment with Picture This Ltd and received a salary of £20,000 p.a.
In October 2007, she gave the company a loan of £12,000 to be used to finance new audio equipment. The loan was secured by a floating charge over the company's assets. In February 2008, a gas explosion resulted in Cassandra receiving severe burn injuries to her face, arms, hands and legs; the studio was also extensively damaged in the ...
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