The innovative online portal Broker Power discusses the Insurance Act 2015.
Leading online broker portal, Broker Power, discusses the key elements of the Insurance Act 2015 and the implications it could have to agents.
Enforced on 12th August 2016, the Insurance Act 2015 applies to all policies governed by the laws of England Wales, Scotland and Northern Ireland that are entered into or varied on or after that date.
The key elements of the Insurance Act 2015 are:
A new duty of fair presentation of your risk details
The Insurance Act 2015 will define a new structured approach on how details of businesses should be presented to an insurance broker at every renewal or alteration of a policy – the duty of fair presentation. The primary duty of businesses is to inform their insurance broker about all information that would affect the final judgement in writing cover and on what terms. Alternatively, businesses must provide their broker with enough information to generate further questions.
Changes in the way non-disclosure or misrepresentation of your risk details are dealt with
The Act has introduced a system of proportionate remedies for when a fair presentation is not made. These remedies are based on what should have been done had a fair presentation been made. Insurance brokers will still be able to avoid (i.e. cancel from its start date) a policy and retain the premium if the failure to make the fair presentation was deliberate or reckless.
Nick Watson, Iprism explains: “The revised duty in respect of disclosure is a key change in the disclosure requirements for non-consumer contracts. Now, the insured must make a ‘Fair Presentation of Risk’.”
Broker Power have created a different case for situations that could have been acted upon differently, had the information they were provided with been different. Situations include: If an insurance broker does not provide cover, then they can void the policy and refund the premium. In a situation where they have charged a higher premium, they may proportionately reduce any claim. If different terms in the policy are required, that would be treated as though it contains those terms.
“The new Act focuses on fairness, transparency and certainty over the rules that govern contracts between commercial policyholders and insurers”. Watson also explains that: “It’s your responsibility to make a reasonable search of information available to you about your business. This information will help draw out anything unique about you and your business that your insurer needs to know.”
Changes in the way fraudulent claims are dealt with
Insurance brokers are not liable to pay a claim if a fraudulent claim is made, including any honest elements. Insurance brokers may also recoup money that has been paid out on a claim. The Act also now allows insurers to cancel policies from the point when a fraudulent claim was lodged. Insurers will still be liable for any losses before that point.
Broker Power suggests clients speak to their insurance adviser to discuss any questions regarding the Act and how it may affect businesses.
About Broker Power
Broker Power Ltd offers small business insurance with expert advice on tap. Businesses and tradesmen are able to compare quotes from a network of approved insurance providers. Users search the website for policies via the easy-to-use Trade Finder facility to purchase instant cover online, or get expert advice from a local broker before buying, at no extra cost.
Broker Power Ltd is a trading name of Iprism Underwriting Agency Limited.
- Media Contact:
- Nick Watson, Iprism
- Web: https://www.iprism.co.uk
- Email: info[at]iprism.co.uk