The British Insurance Brokers’ Association (BIBA) has welcomed the Insurance Act 2015 which is implemented this month. Designed to increase professionalism in the placing of commercial insurance provide fairer outcomes for customers, the Act will also bring new considerations for brokers and businesses when arranging insurance.
Every business insurance policy placed, renewed or amended will be affected by this legislation which is the biggest change to the insurance market in more than 100 years. It will modernise insurance law and aims to make seeking payment from insurers simpler and fairer in the event of a claim.
Insurance Act changes
The Act includes many positive developments that BIBA lobbied for, such as outlawing the ‘basis of the contract’ clauses which previously turned information provided by customers into warranties so that any change (even trivial or immaterial) could have led to termination of the contract.
BIBA also succeeded in lobbying for ‘terms not relevant to the actual loss’ to be outlawed meaning, for example, that if a policyholder has to comply with a warranty to turn on a burglar alarm but a claim is caused by a flood, then the insurer will accept the claim.
Steve White, BIBA’s Chief Executive, said: “We are delighted that the Insurance Act is now in force. We know there will not be absolute certainty until some of the Act’s provisions have been tested in court but armed with all of the information available, our members will be able to advise customers on the provisions of the Act.”