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Approved guarantee.
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63.—(1) A guarantee shall be an approved guarantee within the meaning of this Act if, but only if, it complies with all the following conditions, that is to say:—
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(a) it is issued by a vehicle insurer or a vehicle guarantor to a person (in this Act referred to as the principal debtor) named therein; and
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(b) the vehicle insurer or vehicle guarantor by whom it is issued binds himself by it to guarantee the payment by the principal debtor or his personal representative of all sums without limit which the principal debtor or his personal representative shall become liable to pay to any person (other than the excepted persons as defined in this Act) whether by way of damages or costs on account of injury to person or property occasioned by the negligent driving during the period (in this Act referred to as the period of cover) specified in that behalf in such guarantee of a mechanically propelled vehicle to which such guarantee relates by the principal debtor or by any of such other persons (if any) as are mentioned in that behalf in such guarantee; and
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(c) the liability under the guarantee of the insurer or guarantor by whom it is issued is not subject to any condition, restriction, or limitation, which is prescribed as a condition, restriction, or limitation (as the case may be) which shall not be inserted in an approved guarantee; and
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(d) the period of cover is not capable of being terminated before its expiration by effluxion of time by the insurer or guarantor by whom it is issued save either with the consent of the principal debtor or after seven days' notice in writing to the principal debtor.
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(2) A guarantee which complies with all the conditions set forth in the foregoing sub-section of this section shall not be prevented from being an approved guarantee merely by reason of its containing provisions additional to and not inconsistent with the provisions required by those conditions.
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(3) A guarantee shall not be prevented from being an approved guarantee merely by reason of the guarantee thereby given being subject to the following limitation and the following exception or either of them, that is to say:—
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(a) the limitation of such guarantee, in so far as it relates to injury to property, to the sum of one thousand pounds in respect of injury occasioned by any one act of negligence or any one series of acts of negligence collectively constituting one event, and
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(b) the exception from such guarantee of any liability (in excess of the common law or the statutory liability applicable to the case) undertaken by the principal debtor by special contract.
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