Business Insurance in ACTion
What the Insurance Act 2015 means for our business clients
Current insurance legislation is almost entirely founded on the Marine Insurance Act written in 1906 - but things are about to change.
The Insurance Act 2015 comes into force on 12th August 2016, bringing with it the biggest legislation change the industry has seen for a generation.
The 1906 Act reflected the much simpler world of its day with insurance products dominated by marine insurance. Globalisation and the impact of IT were not even contemplated.
The new law is designed to cope with a more complex world, and brings clarity to what information must be disclosed when insurance is purchased, and importantly what does not have to be.
It also clarifies what knowledge the customer is expected to know, which other people involved with the business need to be consulted in the provision of the information, and how the information should be presented to the insurer.
In return for more proportional remedies in the event of mis-representation, the Act imposes greater clarity on the insured’s obligations.
All this provides an opportunity for brokers such as ourselves to reflect on current practices and make our service even better in order to provide the best outcome to you, our commercial clients.
We understand that you continually feel financial pressures to keep your costs down, but when it comes to insurance, no matter how much cost is saved, the policy is of no value if it does not respond when a crisis strikes.
Bruce Hepburn, CEO of Mactavish, which has been instrumental in the development of the new legislation over the past eight years, says: “With its emphasis on a more professional market, the new law is a great opportunity for well-informed and well-prepared brokers to add value by providing crucial advice, and for policyholders to focus on the quality of the policy provided rather than price alone.”
There is much that can be done to prepare for the new regime, but the Act undoubtedly presents a number of challenges for customers, brokers and insurers alike. Such as:
- Whose knowledge must be captured?
- Where does a ‘reasonable search’ stop?
- What qualifies as a ‘fair presentation’?
- How do you ensure that the information provided is ‘clear and accessible’?
At Fiveways, we have always offered a professional service, advice and guidance in the sourcing and arranging of your insurances. We are committed to continuing to providing accessible, affordable, high quality advice for your business insurance requirements and will be working with our commercial clients to gather and collate sufficient information in good time to present in a fair, clear and accessible manner to insurers and advise our clients on the best policy for them and their business.
The requirements of the Act may well mean longer lead and preparation times, additional information and clarification of information from people associated with the business such as health and safety consultants, accountants, as well as internal management and staff, but it also provides an opportunity to enhance the service and cover we are able to provide, as well as giving even greater peace of mind, assured that the policy will respond when called upon.
For more information about our services or to arrange a visit to review your business insurance requirements, please give us a call on 01952 812380.