A new law is coming into place on the 12th August 2016 which will require businesses to disclose a greater amount of information in order to ensure that their insurance policies that cover them are valid.

What is the Insurance Act 2015?
The Insurance Act 2015 brings in new rules and regulations that focus on what businesses will be required to do before an insurance policy can begin or be renewed. This applies to all policies taken out on or after the 12th of August 2016 and governed by the laws of England, Wales, Scotland or Northern Ireland.

What is the benefit of the Insurance Act 2015 to the consumer?
There are two main benefits of the Insurance Act 2015. The first is that it requires both the insurer to ask the right questions to determine a customer’s eligibility for an insurance policy. Secondly, it provides further clarity on insurance policies, which leads to more appropriate cover, less invalid claims and hopefully less disputes.

Why is it so important?
The Insurance Act 2015 imposes an obligation on policyholders to make a ‘fair presentation of the risk’ before a contract of insurance can be entered into or renewed. For a business to be insured they must carry out a reasonable search within their business to identify every material circumstance which is known or ought to be known.
For businesses that fail to comply with new rules, it would be a breach of the terms of the insurance, meaning that a business's insurance would not be valid until the necessary steps have been taken to resolve these issues.

How can businesses ensure they are compliant?
It is vital that businesses have a clear and defined understanding of all the risks that are being insured. Any of the processes of compiling and checking risk information should be documented and any concerns or failings should be noted. It is also important that businesses define who is responsible for each stage of these processes and where all information can be found. It would also be beneficial for businesses to liaise with brokers and insurers to confirm any requirements of the business.