McHale & Co. Solicitors Blog

Insurance Act 2015

The Act represents one of the most significant pieces of legislation in recent years.  Since the invention of insurance, insurers have relied upon breaches of warranties and condition precedents to avoid an entire insurance policy and making payment for their clients losses.  This is even when the breaches have nothing to do with the events surrounding the claim.

For example, a business may warrant that they will have a fire alarm working at all times, at its premises; a fire occurs and the insured claims on their policy.  If the insurer could establish that the alarm was not working for a period during the insurance period, regardless whether or not it was working when the actual fire occurred, the insurer could void the policy and not pay.  For all insurance policies incepted from 12 August 2016, the insurer can no longer do so.

For the first time, causation and common sense have been imported into insurance policies.  Section 11 of the Act prevents insurers from relying upon the insured’s non-compliance with the policy to avoid liability, if the non-compliance could not have increased the risk of the actual loss incurred.

Insurers would often also seek to not indemnify on the basis of inaccurate information provided to them by the insured, when the policy was incepted or renewed.  Before, as with warranties and condition precedents, the insurer could avoid liability by relying upon the insured providing slightly inaccurate or withholding information which was not overly important.  Section 3 of the Act provides that the insured has a duty of “fair presentation” and therefore again, an element of common sense and causation as to whether or not the information would have actually effected the insurer’s decision to provide cover would have been effected.

So, insured’s that have policies incepted after 12 August 2016 are in a far better position, in respect of claiming on their insurance policies.

The Consumer Insurance (Disclosure and Representations) Act 2012, which came into force on 6 April 2013, imposed similar rules for consumer insurance contracts.

If you have a claim against your insurer, whichever regime applies, please contact us on 0161 928 3848 or at, for a free consultation.


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