What is it?
The Insurance Act 2015 is the most significant update to commercial insurance law in the last 100 years, overhauling principles originally laid down by the Marine Insurance Act 1906. The Act is the culmination of several years work by the Law Commission in conjunction with insurers, brokers and customers. It is designed to reflect the requirements of a modern insurance market, and reflects best practice in the UK insurance industry. Insurers are welcoming the changes brought about by the Act which better reflects the needs of customers.
The Insurance Act 2015 mainly applies to commercial insurances (non-consumers) and will apply by law to contracts issued, renewed or varied after 12th August 2016 provided such contracts are governed by the laws of the United Kingdom (England, Wales, Scotland or Northern Ireland). However, as the intention of the Act is to create a more balanced relationship between insurer and customer.
The Act aims to clarify how companies provide information to insurers and what information is to be provided to them. Under the Act, commercial policyholders must in future demonstrate a comprehensive understanding of their insurance risk as they will have what is called a duty of “fair presentation” to the insurer. It will come into force on 12th August 2016.