When arranging business insurance, it’s your duty to provide complete and accurate information relating to the risks you face. If you fail to do so, it may compromise your cover.

On 12th August 2016, a new act was introduced (the Insurance Act 2015), requiring any company taking out business insurance to disclose and give a ‘fair presentation’ to the insurance company of the risks facing their business.

Why was the new law introduced?

The new law was introduced to make circumstances and risks more transparent to the insurance company, ensuring there is no ambiguity and that the correct level of cover is set in place. Answers such as “see our website” or “refer to your records” will not be deemed acceptable.

What does this mean for me?

It means, when you take out business insurance, you must present any known business risks in a clear, accessible way. You’ll need to include all relevant facts, information and circumstances, enabling the insurer to make a fair judgment about the risk, level of the premium and terms of the policy, and whether they want to take on the risk.  This is described as information your senior management ‘ought to know’, which would be available to anyone conducting a search into your company.  

What happens if I fail to disclose information?

If you fail to disclose relevant information, your insurer may reduce payment for a claim, apply terms to the policy or even refuse to insure you.

What if I want to make changes to the policy?

The same criteria apply. If you need to make changes, or at renewal, it’s your duty to provide any additional or relevant information pertinent to the risk.

How do I know what information to disclose?

As your broker, J. Bennett & Son can help. It’s our job to advise you, ensuring you provide your insurer with all the necessary information so they have a real understanding of the risks involved and can provide you with appropriate cover. To find out more about disclosing and presenting risks, talk to us today on 01494 450 450 or email us at insure@jbennett.co.uk

Sources:

https://www.bluedropservices.co.uk/blog/262/duty-of-disclosure-and-fair-presentation-of-risk-can-invalidate-insurance/

https://www.marsh.com/uk/services/multinational-client-service/duty-of-disclosure-and-fair-presentation-guidance.html (Note: Contains Duty of Disclosure and Fair Presentation download document)