Businesses are being warned to be prepared for legal changes which could have major implications for how their commercial insurance policies are prepared.
The new Insurance Act comes into force on August 12, 2016, and Nigel West, of Fiveways Insurance in Newport, said it was the biggest legal change the industry had seen for a generation.
He said: “Current insurance legislation is still mainly based on an Act passed in 1906, so the new law is designed to bring commercial insurance into the modern age.
“It brings clarity to what information must be disclosed when insurance is purchased, and importantly what does not have to be.
“But like all new processes, businesses must be aware that it could have quite a significant impact when they are seeking quotations to renew their insurance policies.”
Mr West said the main change regarded how much information a business would have to provide to its broker when a new policy was being prepared.
“The aim of the Act is to bring a far more proportionate response from insurers in the event of misrepresentation, giving greater clarity on the cover provided and certainty should the policy be called upon in the event of a claim,” he said.
“The new process will require additional information and clarification of information from people associated with the business, such as health and safety consultants and accountants, as well as internal management and staff.
“This will undoubtedly result in longer preparation time.
“As much as it might seem like more work at the time, it is vital that this information is prepared correctly and presented clearly to the insurer, so you can be assured that the policy will respond when called upon.”
Mr West added: “Like a lot of things in life, you get what you pay for, and this new legislation provides an opportunity for quality broking businesses to demonstrate their added-value service and for policyholders to focus on the quality of the policy provided rather than on price alone.
“A good broker will work with their commercial clients to gather sufficient information in good time to present in a fair, clear and accessible manner to insurers, and will therefore be able to advise on the best policy for them and their business.”
There is more information about how the new Insurance Act legislation will affect businesses on the Fiveways Insurance website at www.fivewaysinsurance.co.uk – you can also call the team for advice on 01952 812380.