UK insurance law has received its first makeover in over a century bringing it up to date with the evolving business landscape. The Insurance Act 2015 came into force August 2016. As you look to renew or purchase cover in 2017 it is important to understand how the changes affect you.
Guest article: Jelf Insurance
Beacon supply partner, Jelf is on hand to help with your business insurance needs. Read on to see how they are advising hoteliers for 2017.
What is the Insurance Act 2016
The Act came into effect on 12 August 2016, replacing law that has been
in place since 1906. The adapted law was devised to re balance the
position between the buyers of insurance and Insurers themselves. Included within the update is the duty of fair presentation. This new duty will require you (the Insured) to change how information is provided to Insurers, and is explicit
regarding who needs to be consulted when gathering such information.
The Act applies to policies that are taken out or renewed on or after 12 August 2016.
Bringing the changes to life... A scenario
A hotel purchases a policy that includes a condition that extraction hoods are cleaned at frequent intervals in accordance with manufacturers recommendations, but not less than once a month. However, this isn’t adhered too. Heavy rain causes flooding and damages their building.
Pre Insurance Act treatment
Before the Insurance Act, the insurer may have refused to cover the business’ losses for failure to adhere to the condition.
Post Insurance Act treatment
With the Act in force, a broker could argue that failure to comply with the condition couldn’t have increased the risk of the property being flooded and that any claim should be paid.
Things to remember
It’s important to understand and comply with the terms of your cover. If this claim were for a fire, the insurer’s decision to refuse payment may have been valid. It’s also important to understand your new rights under the Act and the obligations you need to meet:
- Fair presentation - you must disclose all material circumstances these are facts/situations that may influence an insurer's assessment of your risk.
- Reasonable search - you are expected to conduct a thorough investigation for all information relating to your business, including asking external parties, to fully disclose your risks to insurers. Ask your broker to help you.
- Insurance team – the disclosure obligations in the Act also require the knowledge of senior management and those who are responsible for arranging the insurance to be disclosed.
For more information about how the act affects your business, simply contact a member of the Beacon team and we will discuss how you can work with Jelf and around 200 additional supply partners, all specially selected to help hospitality, leisure and healthcare businesses.
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