What does the new Insurance Act mean for you and your business?

As a purchaser of insurance the new Act that came into force on 12th August 2016 means you have obligations to your insurance company as they do to you.

The Act applies to all insurance underwritten in the UK.

It aims to make recovery from insurers simpler and fairer in the event of a claim.

It applies to both business and consumer insurance although the new ‘Duty of Fair Presentation’ only applies to business insurance, as consumers were already protected by previous


It improves fairness, transparency & certainty in contracts between commercial policyholders & insurers.
Here is a summary of Key changes

Duty of Fair Presentation

The previous duty of disclosure is replaced with the new Duty of Fair presentation which covers two key areas: ‘Reasonable Search’ & ‘Clear and Accessible’.

Reasonable Search

This means you must BE ABLE demonstrate that a reasonable search has been made to obtain all relevant information, pertinent to your risk, prior to presenting this information.

You must include all relevant knowledge of senior management of the business and those involved in buying the insurance (including the broker).

Reasonable enquiries must also be made of any relevant third parties involved, including external consultants, contractors and anyone insured by the business.

Clear & Accessible.

People can no longer supply a mass of data. Simply referring insurers to your website for further information would generally be unacceptable. Also adequate highlighting of unusual activities and/or known areas of concern that could affect the risk is required.


These are the terms of your policy that require you to do something e.g setting your burglar alarm when your premises are closed. The new act aims to be much fairer where a breach that does not affect the circumstances OF THE LOSS cannot now be used to avoid payment of a claim.

So previously if you had not strictly complied with a warranty then the law said your insurer was discharged from all liability. For example even if your alarm had not been serviced but operated when a break in occurred, some insurers could have refused to pay. Now as long as your burglar alarm was on at the time of the theft your claim would be paid.

Fraudulent Claims

The changes mean when an insured makes a fraudulent claim, the insurer will now not be liable to pay any part of the claim, regardless of whether only part of the claim is fraudulent. The insurer can also choose to pay claims relating to any losses suffered after the fraud occurred.

What do you need to do?

Allow plenty of time to collect all relevant information prior to your renewal date. Make sure it is clear, concise and in an accessible format.

Ensure all management have contributed to the information gathering so you have all the facts.

Consult with anyone in the business who has knowledge relevant to the insurance you are arranging. E.g cyber insurance – speak to the IT manager

Be ready to answer any questions from your insurer and you are responsible for making sure they know everything about your business relevant to you cover.

Talk to us making sure you understand and agree with all the requirements.

What will we do for you?

Work closely with you to assess your insurance needs and fulfil your obligations under the new Act.

Work with you to understand who your senior management team is so that you can make sure you have consulted with everyone who may have information relevant to insurance being arranged.

Help you understand the type of information which may be relevant to disclosure to ensure ‘fair presentation’ requirements are met.
If you would like us to sit down with you and chat you through it call us on 01494 450 450 or email us on insure@jbennett.co.uk


Biba https://www.biba.org.uk/

Aviva https://broker.aviva.co.uk/news/article/375/your-customer-guide-to-the-insurance-act-2015/