The Insurance Act 2015 came into force on 12 August 2016, and is said to have made the biggest reforms to insurance law in over a century.
The Act sets out provisions on “duty of fair presentation” of risks, meaning information must be fairly provided before an insurance contract can be signed. This could include environmental and health and safety risks, for example, a disclosure that you store or carry hazardous substances.
The knowledge of the parties provision sets out what the insurer and insured know, and ought/are assumed to know. This must extend up to senior management.
The material knowledge must be as correct as possible prior to entering into a contract, as the remedies for breaches where information should have been shared can include a higher premium and invalidation of insurance. Such premiums are expected to be much higher as the remedies have been calculated based on factors including whether information was withheld deliberately or recklessly.
The Act itself has been added to Cedrec alongside the Plain English summary, however the Act itself can be interpreted very differently. Insurers are expecting precedents to be set in case law, meaning the importance of disclosure and actively providing relevant information to insurers has never been more crucial.
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