insurance

Question 1

who will it apply to

Answer 1

all commercial policies that are arrnaged renewed or ammended.

Question 2

what does the act aim to do?

Answer 2

aims to establish a fairer, clearer balance between policyholder and insurer. replacing the previous rigid code, the new law offeres a flexible framework or principles which can apply to large coirporates and small businesses alike.
it requires insurers to seek clarficiation wherever necessary

Question 3

the goal of the new legislation

Answer 3

• to ensure all parties work more closely together
• insurers recieve full, relevant and accurat einfo
• your policy works exactly as you expect and need in the event of a claim

Question 4

the 3 key areas in which there is a change

Answer 4

• fair rep of risk
• proportionate remedy
• warranties

Question 5

what has become of the duty of disclosure

Answer 5

• clarifies what info an insurer needs to provide, which staff members must provide it and to whom it must be given.
  must provide a fair rep of risk
• now their responsibility to make a reaosnable search pf the premises. e.g your senior management, what your business does and how it does it.

Question 6

fair rep of risk

Answer 6

• need to list who plays significant roles in making decisins about the organisation and management of business.
• who hold sinfo regarding the insurance you are arrnaging e.g your transport
  -it needs to be presented clearly.
  don’t need to provide any facts that wouldbe common knowledge.
• need to be sure to update insurer about any chnages thta have happened in the year.

Question 7

what is proportionate remedy

Answer 7

• before could have an all or nothing remedy of avoidance, if they failed to provide a fair rep of risk.
  avoidance is still permissible if deliberately conceal.
• it better reflects the intent of the insured.

Question 8

how does proportionate remedy work

Answer 8

• if you don’t provide a fair rep of riskand your failure wa sneither delib or reckless then a proportionate remedy will apply.
• the remedy depends on what the insurer would have done had they known the facts.

Question 9

if they wouldn’t have offered you insurance

Answer 9

may cancel your policy entirely and refuse all claims and return only your premium

Question 10

if still would have given you cover knwoing the new terms

Answer 10

then they are bound to pay your claim based on the cover, premium and terms hada fair presentation been made
For example, let’s say the premium was £500 (based on the incomplete information you gave), and that, had you made a fair
presentation, the insurer would have charged £1,000. In this case, only half of the claim would be paid

Question 11

warranties

Answer 11

promise to take or not to take a specific action during the period of cover.
the term also refers to a promise about a particular state of affairs that does or does not exist at the inception of cover.
if the promsie is untrue or not kept then the insurer may dislcaim all liabiltity under the policy from the date of the breach, whether or not it caused nay loss.

Question 12

how will warranties work

Answer 12

prior to the act failure to comply with a warranty meant the insurer was discharged from all liabiltiy.
e.g set burgular alarm on dta eof theft but not always could still refuse to pay the claim.
now if it was set when the claim occured could get a claim.
you need to understand any warranties enforce from your contract.

Question 13

6 top tips

Answer 13

1. Don’t wait until your insurance renewal date. Allow yourself plenty of time to gather the info.
2. involve all your senior managers in gathering info so that vital facts are captured.
3. consult with anyone who may have info relevant to the insurance your arranging
4. mimisie queries and lost time by presenting the info in the clearest manner possible
5. be ready to answer any questions your insurer may ask about your isnurance and business cover.
6. make sure that you understand evrything your insurnce broker has passed to your insurer.