Partner Article

New Insurance Act Brings Fresh Optimism

The Insurance Act 2015 will be ‘the biggest reform to insurance contract law in the UK in more than a century’,“ says Alan Green, Senior Commercial Executive for the North East, at H&H Insurance Brokers. The intention of the Act will be to bring a fairer approach to the duty of disclosure of “material facts” and other information which forms the basis of a contract of insurance.

Whilst not coming into force until August 2016, the Act will be principles-based, allowing flexibility in its effect.

This is a big development for the UK insurance market as it will amend many principles that were laid down as long ago as The Marine Insurance Act 1906. The Insurance Act will overhaul the laws governing disclosure in non-consumer insurance contracts.

Remedies, following a breach of the duty of disclosure, should be more fairly set out and more proportionate than the existing courses of action available to insurers. Significantly, the view towards policy warranties and conditions has been reviewed and a more pragmatic stance taken. For example, breach of a warranty will not automatically mean that a policy is considered to be invalid.

Although the new Act applies to both consumer and business-related policies, it will introduce a very important element in relation to businesses, known as the “duty of fair presentation”. This duty will be more structured than the long-established duty of disclosure that has been an inherent part of insurance contracts for many years.

Alan says: “The Act is positive news for business and industry as it should bring much needed clarity and transparency to insurance contracts.

The widespread positive reaction to the Act proves it is good news for businesses everywhere, hopefully setting a precedent and encouraging increasing confidence in the commercial sector moving forward. Insurance legislation has received a much needed update that should benefit all.

With offices in Durham and Carlisle, H&H Insurance Brokers offer independent advice on all aspects of business insurance. The Insurance Act will bring a number of changes for the industry and H&H Insurance Brokers will be updating information as time progresses towards its implementation.

This was posted in Bdaily's Members' News section by H and H Insurance Brokers .