Call us now on 01392 426799

Contact Us
Go To www.skip-hire-insurance.co.uk

The Insurance Act


What does it mean for business?

The last Insurance Act was passed in 1906; arguably a simpler time and certainly one with very different requirements. The updated Act has been welcomed by many within the insurance industry as a long overdue farewell to some “draconian” measures of the past.  These changes have been introduced in order to address the needs of 21st century businesses.

The Insurance Industry hopes the changes within the Insurance Act will increase transparency and reduce the number of legal disputes. It is hoped that businesses will benefit from reduced premiums thanks to a lower level of litigation following claims or losses.

But what do all these changes actually mean for the modern business? And how it will affect the relationship between insurance companies and businesses?

There are 4 key parts to the changes and they are broken down into some helpful subcategories to help you to understand how the new Act works and what it means to you.

–          Duty of fair representation

The only part of the law that imposes requirements on the businesses; it states that policyholders are responsible for presenting accurate information. If they are found to have submitted incorrect information it allows the insurance companies to void any contracts.

–          Knowledge of the insured and Insurer

This section was introduced to ensure that when both sides sign a contract, they are armed with the right level of knowledge. An insurer is assumed to have information that could easily be uncovered in a basic search, as well as an overall understanding of the Proposer’s activities. Similarly, there will be an onus on businesses to ensure senior management take responsibility for Insurance arrangements.

–          Remedies for breach of fair representation

This changes the way insurers deal with insurance claims, where there has been an accidental breach due to misinformation. Before, insurers could legally void the contract, whereas the new law only allows this in cases where an insurer would not have provided policy cover at all. According to the new law, insurers must now respond proportionately. For example, if the premiums may have been higher an insurer can lower the cover to compensate.

–          Warranties

The adjustment to warranties is perhaps the most significant change in insurance law and one that serves to empower business owners. The new law states that any breaches of warranty that did not have an impact upon the loss cannot invalidate the contract. Not only that, but any breach in contract means that insurer’s liability is suspended rather than completely broken. This allows for a far more flexible and lenient approach in regards to insurance cover and should provide some well needed breathing space for businesses up and down the country.

What do you need to do to comply?

Making sure you get the cover you need relies on gathering all the relevant facts.



You don’t want to run the risk of a claim not being paid, either in part or in full.

  • Factor in plenty of time to gather all the relevant information you need as you come up to the renewal date for your insurance. You will need to present the details in a clear, concise and accessible manner.
  • Make sure senior management have contributed to the information gathering so that all necessary facts are captured and presented.
  • Consult with anyone else in your business who has knowledge relevant to the insurance you are arranging. For example, if looking at cyber insurance you should speak to your IT manager.
  • Be ready to answer any further questions from your insurer on your business and your insurance cover, if they need further clarity. You are responsible for making sure your insurer and broker know everything about your business pertinent to your insurance cover
  • Ensure you understand and agree with everything your broker has passed to your insurer so any mistakes can be rectified. In the same way that you sign off your business accounts each year to confirm they are a true and accurate account of your financial situation, you will effectively need to do the same for your insurance, by confirming your broker and insurer have a true and accurate assessment of your business insurance needs and risks.

Renewal Info


RadDatePicker
Open the calendar popup.
Go

Contact us

Call us now on 01392 426799 or alternatively use the button below to contact us online.

Contact Us