Grub2 fails to install, installation crashes when Windows 7 in already on partition

Have not confirmed yet if removing Windows 7 from partition will solve this. Other similar issue reported after someone had Windows 8 installed.

ProblemType: Bug
DistroRelease: Ubuntu 16.04
Package: ubiquity 2.21.51 [modified: lib/partman/automatically_partition/question]
ProcVersionSignature: Ubuntu 4.4.0-15.31-lowlatency 4.4.6
Uname: Linux 4.4.0-15-lowlatency x86_64
ApportVersion: 2.20-0ubuntu3
Architecture: amd64
CasperVersion: 1.368
Date: Fri Apr 8 02:22:40 2016
InstallCmdLine: BOOT_IMAGE=/casper/vmlinuz file=/cdrom/preseed/ubuntustudio.seed boot=casper only-ubiquity quiet splash ---
LiveMediaBuild: Ubuntu-Studio 16.04 LTS "Xenial Xerus" - Beta amd64 (20160323)
ProcEnviron:
 PATH=(custom, no user)
 XDG_RUNTIME_DIR=<set>
 LANG=en_US.UTF-8
SourcePackage: grub-installer
UpgradeStatus: No upgrade log present (probably fresh install)