The Insurance Act 2015 came into force on 12 August 2016 and it will affect everyone in the insurance market, including those in the agricultural sector.
The Act introduces a new concept of “fair presentation” which will see businesses having to volunteer information when entering into an insurance contract. There will be an increased responsibility on the policyholder to disclose such information but, equally, there will be an increased responsibility on the broker to know the ‘ins and outs’ of their client’s business so, any business should expect to be asked more questions at renewal time. Setting up policies could take far longer and, potentially, there will need to be greater involvement from all staff across the business.
All information will have to be presented clearly and accessibly to the insurer. Merely providing the insurer with lots of information won’t discharge the duty of fair presentation – the information must be presented in such a way that the insurer can make sense of it all.
Essentially, insurance contracts will still be based on good faith but there is now a greater onus on the policyholder to fairly present the risks to their insurer. Brodies’ insurance team has put together a more detailed note on the changes that have been brought about by the Insurance Act 2015, which you can read here.