Your Obligations as a Policyholder

‍The Insurance Act

The Insurance Act 2015 exists to enable insurers to provide you with a fair outcome in the event of a claim. Under its terms you have a statutory duty to provide a ‘fair presentation of the risk’. 

This means, before starting a new policy, changing a policy mid-term, or renewing a policy, you must make sure the information you provide is clear, accurate and complete. It is important you disclose all material circumstances that you’re aware of. 

We recommend you carry out an appropriate review, which may include consulting with colleagues, directors and managers of your business. You should also consult with anyone who has particular knowledge about the risk to be insured. If you’re not sure what constitutes material circumstances, or you’ve not been able to gather the necessary information, please let us know. 

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Deliberate or Reckless Failures

Deliberate or reckless failures to present the risk fairly could mean part or all of your claim is declined. In these circumstances, the insurer is entitled to treat the insurance as if it had never existed, and to keep any premium you have paid. If you fail to present the risk fairly, but your failure was neither deliberate nor reckless, insurer’s response will depend upon what would have happened if you had complied with your obligations:

(a) if insurers would not have provided the policy, they may treat the policy as if it never existed, refuse to make any claims compensation from the scheme if we cannot meet our obligations, payments and demand the return of any claims payments already made. However, insurers would have to return any premium payments already made;

(b) if insurers would have provided the policy but on different terms, the policy will remain in force but will be treated as if those different terms would have applied from the start of the policy. This could result in a claim not being met in part or in full.

(c) if insurers would have provided the policy but charged a higher premium, insurers may reduce any payment in proportion to the difference between the premium charged and the premium that would have been charged if you had fairly presented the risk. This could result in a significant reduction to the amount of any payment under the policy.

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Statements and Facts

All statements and facts disclosed on application forms, statement of facts, claim forms and other documents, whether online or not, should be full, true and accurate and must be given after undertaking a reasonable search, including consulting with your senior management.

It is your responsibility to make sure the information submitted to the insurer is presented in a way the insurer will find reasonably clear and accessible. Where a large amount of information is provided you will need to ensure that it is organised and structured to enable the insurer to navigate what is important.

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Checking Details and Documentation

You must check all details on any online application, proposal form or statement of fact, paying particular attention to any declaration you are asked to sign or agree. It’s important that you read all insurance documents issued to you and make sure you’re aware of the cover, limits and any other terms that apply. Particular attention must be paid to any warranties and conditions as failure to comply with them could invalidate your policy.

It is your responsibility to check the documentation we send you in relation to each insurance contract and satisfy yourself that it is entirely in accordance with your understanding and instructions. You should advise us promptly of any incorrect points or changes required. Otherwise, we will assume that the documentation and insurance contract satisfy your requirements.

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Ongoing Duty to Disclose Material Circumstances

Once you have purchased a policy, it is important that you inform us of any changes in circumstances which may affect your insurance as soon as you become aware of them. If you have any doubts as to which changes to your circumstances should be notified, please contact us and we will be able to help.

You should notify us immediately of any changes in the details upon which your insurance was arranged. Please do not wait until the renewal date of your policy as changes to these details could make your policy invalid, until the insurer has been notified and has accepted the change(s).

Examples of changes include (but are not limited to):

• Change in type of business activities.
• Change in type of services or products offered.
• Change in Policyholder Name.
• Merger or acquisition.
• Creation of a new subsidiary.
• Bankruptcy, insolvency, or voluntary arrangement.
• Change in place of work.
• Non occupancy of property.
• Physical changes to property.
• Change in use of vehicle/s.
• Convictions or accidents.
• DVLA-notifiable health issues.
• Modifications to vehicle/s.

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Adequacy of Sums Insured and Limits of Liability

It is your responsibility to ensure that all sums insured and policy limits are adequate. It is recommended that the appropriate professional (e.g. surveyor) be consulted to ensure that the sums insured and limits applicable under the policy are suitable.

We can provide benchmarking services, however we offer no guantees that the amount of cover you decide to purchase will be sufficent to cover all future losses.