The insurance company cannot surely have endless liability if you have failed to comply with the terms of cover

My understanding was that if your insurance was invalidated ..any third party involved in an accident with you has the right to make a claim via the motor insurance bureau under the uninsured driver agreement and \ or take out a civil case against you in order to reclaim damages.

http://www.trafalgardirect.com/glossaryframe.html

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Ab Initio ("from the beginning")
A breach of a condition, which means that the insurer may be entitled to void the policy from inception i.e., treat the policy as null and void .
The essential relevance of this term is that it highlights the vital importance of submitting accurate responses to Proposal Form questions and of complying absolutely with the terms and conditions of policies. Failures in either area can result in a policy being voided from the beginning and the premium returned to the policyholder .

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Void and voidable
Null and void e.g. where a policy can be treated as though it never existed due, for example, to a material non-disclosure.

DG wrote:

The insurance company cannot surely have endless liability if you have failed to comply with the terms of cover

My understanding was that if your insurance was invalidated ..any third party involved in an accident with you has the right to make a claim via the motor insurance bureau under the uninsured driver agreement and \ or take out a civil case against you in order to reclaim damages. snip...........

What I have been trying to get over all along (and the only thing I am saying) is:

An insurer in the UK cannot, by law, invalidate the road traffic act cover of your policy for any other reason than you being unlicensed to drive the vehicle.

So in your example above the 3rd party would not need the motor insurance bureau uninsured driver agreement. Of course he would if you had not taken out any insurance in the first place.

I give in, I'm bored now and I can't type fast enough

You're getting bored ??

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How do I know if I can claim on the other vehicle’s insurance or claim through the MIB?
To help you to decide whether you are eligible for compensation click on the type of problem that is relevant to you:

Category 1:

(a) The owner of the vehicle does have insurance but lets his “mate” drive – and he’s not covered by the policy and does not have his own insurance.

(b) The owner of the vehicle does have insurance but the car is stolen and the thief does not have insurance.

(c) The owner of the vehicle did take out insurance but the insurers have canceled the policy on the grounds that the owner lied on his proposal form (so the insurance policy is void for non-disclosure). If the insurance is ‘void’ it means it’s as if the policy had never been taken out in the first place - ie there is no policy!

(d) The owner of the vehicle does have insurance but lets his “mate” drive – and he’s not covered by the policy and does not have his own insurance.

(e) The owner of the vehicle does have insurance but the car is stolen and the thief does not have insurance.

(f) The owner of the vehicle did take out insurance but the insurers have repudiated liability on the grounds that the insurance policy is void for non-disclosure.