The Association of Insurance and Risk Managers in Industry and Commerce (AIRMIC), has published a technical briefing paper which is designed to help commercial policyholders benefit from the changes introduced by the Insurance Act 2015 before it comes into force in the autumn of 2016 (in relation to contracts made after that date).

The Insurance Act was passed in February of this year. It represents fundamental reform of the laws governing commercial insurance and includes critical safeguards for policyholders. As well as providing extra protection for commercial policyholders, the act will bring the UK up-to-date and into line with other insurance markets. As a result, AIRMIC has been encouraging its members to start preparing for the changes as soon as possible, and to start talking to their brokers and insurers. Unless current policy wordings are changed, policyholders will not see the benefits introduced by the new act until 2016.

AIRMIC’s briefing paper provides a series of sample wordings and endorsements which policyholders can use to amend the terms of an existing policy so as to bring it into line with some of the key reforms introduced by the act. The elements of the act covered by the endorsements include the provisions relating to basis of contract clauses, breach of warranty, breach of terms unrelated to the actual loss and remedies for non-disclosure. The draft endorsements do not cover the provisions in the act which deal with the duty of fair presentation of risk or fraudulent claims. AIRMIC’s chief executive has urged members to read the briefing paper and use it as the basis of discussions with its insurers. The wordings should be incorporated into existing policies carefully, and insureds should of course exercise particular caution of their existing policies are more advantageous than the terms of the act.

A copy of the technical briefing paper which contains the sample wordings and endorsements can be found here: