Insurance - A Fairer Future

On the 12 February 2015 the Insurance Bill introduced into parliament on 17 July 2014 received royal assent. When that law comes into force in August 2016, insurers will find it that much harder to wriggle out of their insurance contracts by alleging that information given to them by the insured before the policy came into being was inaccurate. As things stand at present, insurance companies are able to seize on any minor inaccuracy in the information provided to them by the insured before they agreed to provide cover, in order to refuse cover under the policy. The new Act will do much to prevent that by abolishing clauses which have the effect of converting pre-contractual information supplied to insurers into warranties and by providing that if there is a breach of warranty the insurers liability should be suspended, not discharged, so that insurance coverage is restored after a breach has been remedied. Finally and importantly the new Act provides that a breach of a warranty should not allow an insurer to refuse to pay a claim if the insured shows that the breach was completely irrelevant to the loss suffered. Additionally, the Act amends the current duty on business policy holders to disclose all possible risk information to insurers before entering into an insurance contract. It does that by introducing a duty on business policy holders to fairly present the risk and it also provides the insurers with a number of proportionate remedies when the duty is breached. All in all the Insurance Act 2015 is to be welcomed by those wishing to take out insurance contracts, whether businesses or private individuals, as it goes a long way to levelling what is currently an uneven playing field in the relationship between large and powerful insurance companies and their policyholders. For further information please contact Nick Lambert at or on 0114266 6660.

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