If you weren’t already aware, The Insurance Act comes into effect on 12 August 2016. Which means that anyone who has responsibility for sourcing insurance needs to be taking action - now. http://www.advantageuk.net/

1. March 2016ISSUE 01Advantage Risk Solutions Ltd is authorised and regulated by the
Financial Conduct Authority (FCA). Firm reference number 629688.
www.advantageuk.net
If you weren’t already aware, The Insurance Act
comes into effect on 12 August 2016. Which means
that anyone who has responsibility for sourcing
insurance needs to be taking action - now.
The Act has many positive outcomes for policyholders
which is great news. For example, insurers will no
longer be able to automatically void cover following a
breach of warranty.
However, you’ll also need to be aware that the Act
imposes new and clear disclosure obligations on
policyholders that must be taken seriously.
New Disclosure Obligations
Before a new policy is started, if your policy is due for
renewal, and whenever there is a material change in
risk, it’s your responsibility to make a clear and
accessible disclosure of all material facts.
In other words, those which would influence the
judgement of an insurer.So this means that before
making this disclosure, you’re required to make
reasonable enquiries of your staff; ensuring that you’re
aware of all circumstances and facts that could be
deemed to be relevant material facts.
EXPERT ADVICE.
WAY ABOVE THE ORDINARY.
The Insurance Act 2015 Are you ready?

2. March 2016ISSUE 01Advantage Risk Solutions Ltd is authorised and regulated by the
Financial Conduct Authority (FCA). Firm reference number 629688.
www.advantageuk.net
For more information, let’s talk
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Any views or opinions expressed in this briefing are for guidance only and are not intended as a substitute for appropriate professional guidance. We have taken all reasonable steps to
ensure the information contained herein is accurate at the time of writing but it should not be regarded as a complete or authoritative statement of law.
What needs to be disclosed
All material circumstances that are known, or ought
reasonably to be known to you. This may include
circumstances that prompted a specific cover to be
requested, potential financial difficulties and anything
that might increase the risk of a claim. Insurers are not
expected to be experts in your particular industry, so
don’t assume anything is common knowledge.
For a small business, the managing director may well
have the sufficient day to day operational knowledge to
confidently make the disclosure.
However, if you employ more than a handful of staff, or if
you’ve delegated important duties and decisions, it’s
crucial that a full enquiry is made of these staff before
you can confidently make your disclosure.
What are the Risks of non
disclosing?
In the event of a failure to disclose a material fact, an
insurer will have various options:
1. If the non disclosure is deliberate or reckless, the
policy can be avoided and your premium retained.
2. In the event of a careless breach, your policy can be
avoided and your premium refunded. Plus terms
can be applied retrospectively or the claim reduced
to reflect the fact that the insufficient premium has
been charged.
Any of these remedies have the potential to have
disastrous consequences for your business. It might
have been better to self insure – at least you know
where you stand.
Steps to ensure you make a
complete disclosure
1. Create a clear questionnaire or circular for your staff
to identify issues.
2. If in doubt about whether something should be
disclosed - disclose it!
3. Circulate the questionnaire or circular - well in
advance of your renewal date.
4. Diarise to ensure key individuals have responded
with details of any material facts.
5. Clearly document all responses.
6. Ensure you make your broker aware of all material
facts arising. And if your broker has not prompted a
full disclosure, it’s time to change your broker.
7. Make sure that you see the submission that’s
prepared by your broker and are given the
opportunity to clarify or amend as necessary.
8. Be prepared to give further information in response
to any insurer questions.