Claimed to be “The biggest reform to insurance contract law in more than a century.” But what does it mean for you and your business?
Changes to the law on Insurance warranties
Currently an Insurance Warranty can describe a range of specific conditions applied to your Insurance Policy by an Insurer.
Under the existing Insurance law (Marine Insurance Act 1906 and common law precedent) if the Insurance warranty on your policy is not complied with at any time during the period of insurance, then all policy cover can be avoided. Under current Insurance Law insurers could avoid a claim for water damage if you have not complied with an Insurance warranty to upgrade your burglar alarm.
The Insurance Act 2015 brings in some much called for reforms to Insurance Warranties, however these changes will not come into force on 12th August 2016 and prior to this date it will be at your Insurer’s discretion whether they apply the new rules.
Under the 2015 reforms, Insurers will only be able to refuse payment if the breach of Insurance warranty is directly relevant to the claim event. Further, your cover will now only be void for instances that occurred at a time when you were in breach of the Insurance warranty.
What does this mean for your business?
This allows businesses to take more informed operational decisions, knowing that if they are in breach of a warranty for a short period of time, it won’t have an effect on cover for un-related instances, or claims concerning events that took place whilst the warranty was being complied with.
If you would like further advice on this or any other technical Insurance matter please contact Paul Evans ACII, Chartered Insurance Broker on 0845 4310 448 or email insurance@butlerevans.co.uk