In February last year the Insurance Act 2015 received Royal Assent and will become effective from August 12, 2016. The Act will change the UK’s commercial insurance law. The current regime, underpinned by the Marine Insurance Act 1906, will continue to apply to policies incepted or renewed for a period of 18 months but thereafter the 2015 Act will apply, by default, to commercial (‘non-consumer’) insurance policies.
The simple guide below has been developed by Romero Insurance Brokers to provide a concise update of what these changes will mean to you.
The Act Deals with
Duty of fair presentation
 Knowledge of Insured and Insurer
Remedies for breach of duty of fair presentation
Remedies for fraudulent claims
Contracting Out
For non-consumer insurance, the provisions of the Act are intended to provide default rules. However, parties are free to agree contract terms which are less favourable than those in the Act, provided that the insurer satisfies two transparency requirements. This ability to contract out is not true of consumer insurance contracts. An insurer will not be able to use a contractual term to put a consumer in a worse position that they would be in under the terms of the Act.
Where insurers do intend to opt out (and hence include a “disadvantages term” they must take sufficient steps:
  1. To draw it to the insured’s attention before the contract is entered into, and
  2. The disadvantages term must be “clear and unambiguous as to its effect”.
What is sufficient to meet the above two requirements will depend on the characteristics of the insured and the circumstances of the transaction (where and how is the contract made).
The contracting-out provisions will not apply to settlement agreements or the prohibition in respect of basis of the contract clauses.
In many respects the new Act codifies existing case law rather than effecting wholesale revisions to the status quo, although some changes – such as the new law on warranties – will be significant. The Act will, however, take time to bed in and there are bound to be test cases in years to come about what some of the new provisions mean.
For further information please speak to your usual Romero contact or for new customers, please contact Richard Nicholson or Robin Kinkead on 0113 281 8110.

Important Update for Motor & Fleet Policy Holders