Today the new Insurance Act 2015 has come into play, meaning that the rules and regulations for businesses buying insurance have changed. To make sure you stay on the right side of the new laws, this guide will provide all of the information you need to know about the Insurance Act.
What is the Insurance Act 2015?
Put simply, the Insurance Act 2015 is a legal framework that aims to modernise insurance law. All business insurance policies that are placed, amended or renewed from today (12th August 2016) will be affected. The whole aim of the Insurance Act is to make it simpler – and fairer – to make a recovery should you need to claim. This will potentially speed up the whole claims process for businesses, as long as those businesses have made a ‘fair presentation of risk’.
Fair Presentation of Risk
This added element to the Insurance Act 2015 is one of the key concerns for customers. While you may be able to reap the benefits of a simpler and fairer recovery process in the event of a claim, there are some caveats involved. Both existing obligations of ‘accuracy of material information’ and ‘good faith’ still remain in the updated Insurance Act. However, there are now two new elements included, that a customer must carry out to provide a ‘fair presentation of risk’. These include:
Clear and Accessible
This is based on how you present the risk information to your insurer. All information must be presented in a clear way that enables the insurer to properly evaluate risk. Businesses will not be allowed to ‘data dump’ large amounts of information, which could make it difficult for the insurer to assess risk. Everything must be signposted and presented in a clear and concise manner. Customers will also have to make a note of any areas of concern or unusual activities, which could impact risk.
This element will vary from business to business, depending on their circumstances. Firstly, the customer must identify and verify all information relevant to any risk or risks within the business. Adequate enquiries must be conducted within the company, to ensure all risk(s) have been identified. This also includes any knowledge required about any ‘senior management’ within the business, any person(s) involved in buying the insurance (such as an insurance broker), and any relevant third parties involved in the business. Third parties include contractors, consultants, or anyone else that may be insured by the policy.
Implementing the Changes
With a greater responsibility on determining risk(s), businesses will have to put in more legwork than ever to get insured. However, this does mean that claims and recoveries will be processed quicker – which is a positive change. Here are our top tips for implementing the new changes:
- Those in charge of insuring the business will have to ensure they have identified and verified all risk(s) involved and present this information to their insurer in a transparent manner.
- It is important to liaise with your insurance broker and insurer themselves, to make sure you’re staying on the right side of the new regulations.
- Ensure you start the process with enough time before you need to renew or apply for a new insurance policy.