Three Ways the Insurance Act of 2015 Will Affect Commercial Insurance Brokers

Three Ways the Insurance Act of 2015 Will Affect Commercial Insurance BrokersIn 2015, a new act destined to update the century-old rules regulating the operations of insurers and commercial insurance brokers across the UK – dubbed the Insurance Act of 2015 or simply The Act – was approved by the British Parliament. That act, now set to come into effect, promises to change a few key factors within the British insurance field. Listed below are three of the main ways in which the new legislation will affect the way commercial insurance brokers do business.

Fair Presentation            

The duty of fair presentation of the risk is perhaps the biggest impact this new law will have for commercial insurance brokers. This measure requires the insured (or the broker) to present the insurer with every potential material risk which may affect the contract prior to it being celebrated, in a clear and understandable manner. Commercial insurance brokers are therefore discouraged from presenting unnecessary information which could muddle policy underwriting, making the entire process more streamlined for both parties.

Additional Remedies

Until now, the only way for an insurer to act in case of a breach of contract by the insured was to act as though the policy had never existed. The new Act introduces new provisional remedies destined to make sure the insurer is protected in case of a situation like this, and makes the distinction between deliberate or reckless breach and innocent or negligent breach clearer and more defined.

Law of Warranties Reform

Finally, the Act reforms the existing Law of Warranties, to ensure a breach of warranty does not necessarily result in immediate termination of a policy, and that insurers cannot claim it for circumstances which do not directly affect said policy. This, in turn, protects the insured, which may in certain cases continue to enjoy cover even in a case where their warranty was breached.

Needless to say, here at Watson-Laurie, our team of expert commercial insurance brokers are already prepared for these changes, and will be looking to put them into practice starting next month!


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