We’re not in the habit of hitting our clients with lots of jargon-based information about insurance. Because let’s be honest, it can be complicated enough, and we’re not going to start now. So this is a quick guide on the new Insurance Act (which comes into effect on 12th August 2016) and how it affects how you arrange your commercial insurance.
- Insurers will now not be able to wriggle out of a claim in the event you didn’t have your alarm on (and your policy had an alarm condition) and your building floods. They now have to pay a claim if the condition on your policy is irrelevant to the loss.
- Insurers are now unable to avoid the policy if a material fact was not disclosed by you (either carelessly or innocently) if they would have written the policy regardless. Insurers can ask for the additional premium they would have charged had they known about the fact, or indeed they can impose additional terms or conditions to the policy.
- In the event that a policy warranty is not met by you, insurers can no longer terminate the policy. They can now suspend cover until the warranty is complied with.
- In certain circumstances you may be able to claim for damages against an insurer for late payment of a claim.
So all the above are a major change in the policyholder’s favour. However the rough often comes with the smooth, and in return policyholders will need to make a more concerted effort to assist the insurer in understanding their business. This is being termed the ‘duty of fair presentation’.
You will need to ascertain from anyone within your organisation who has the relevant knowledge whether they know anything about your business which could affect your insurance. This could be your management team, or your employees. For example your Health & Safety Manager or Operations Director. ProAktive then recommends that this request for information & subsequent responses are documented by you in order to show that you have followed a proper process.
We realise this may mean more time is needed to deal with your renewal than in the past, so you’ll be hearing from us earlier in the year to discuss your insurance requirements than you may have done previously.
If you need any advice or guidance on how you can protect yourself and how the Insurance Act affects your business, please call ProAktive on 01302 340344.