What’s this all about?
The Insurance Act 2015 comes into force today. One of the most important changes of the new Act is that it redefines the customer’s duty of disclosure as one requiring a ‘fair presentation’ of their insurance risk.
How does this affect you?
The Act makes important changes to the law, the key elements being:
1) Duty of Disclosure & Representation – The existing duty remains and is clarified with the requirement for customers to make a ‘fair presentation’ of their risk to their brokers or insurers. The customer must disclose every material circumstance which they know or ought to know.
2) Remedies for Non-Disclosure or Misrepresentation – Remedies must now be proportionate and reflect the actual underwriting impact, had the correct information been provided originally.
3) Basis of Contract Clauses – These have been abolished, removing mechanisms which allow avoidance if information provided by the customer is inaccurate.
4) Remedy for Breach of Warranty – Warranties can continue to be applied, but a breach of these warranties will now mean liability is only suspended for the period of the breach and only where relevant to a claim.
5) Remedy for Fraud – The new remedy removes the option of avoidance. In the event of fraud, an insurer will keep the insurance ‘on cover’ for claims made before the fraud occurs, but has the option to cancel the policy with effect from the date of the fraudulent act.
How can we help you?
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We do everything we possibly can to check that we have got our facts straight, but it’s always possible that we could make a mistake (hopefully not or never would be better). Therefore we would like to make you aware that we accept no responsibility for information that may be factually incorrect or out of date, but we will do our best to make sure that all content is accurate. Our vision behind bringing the blog to the wider community is to keep our clients and prospective clients informed of their legal requirements, the different products on offer and how they may benefit your business and the new schemes we find which we think will benefit you.
We are Personal and Commercial Insurance Brokers based in Newquay covering the whole of Cornwall and the UK
Update on previous blog post 28.06.2016
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