Insurance Act 2015—implications for law firms
Insurance Act 2015—implications for law firms

The following Practice Compliance guidance note provides comprehensive and up to date legal information covering:

  • Insurance Act 2015—implications for law firms
  • Duty of disclosure
  • Warranties
  • Fraudulent claims
  • Contracting out
  • What next?

The Insurance Act 2015 (IA 2015) came into force on 12 August 2016, and has brought about a clarification of existing law. The changes relate particularly to:

  1. duty of disclosure

  2. warranties

  3. fraudulent claims, and

  4. contracting out

This Practice Note, which is produced in conjunction with Professions at Lockton Companies insurance brokers, outlines a summary of the changes and what they mean in practice. The current view is that the changes will generally be beneficial to insureds, particularly non-consumer clients. The changes also remove some of the more draconian measures previously available to insurers—one aim of which is to reduce the number of legal disputes.

Duty of disclosure

The old duty to disclose all known (or which ought to be known) material circumstances to an insurer has been replaced by a duty to make a 'fair presentation of the risk'.

As the insured party, there are two ways to meet this requirement:

  1. disclose all material circumstances of which the you are aware (or ought to be aware)—you will need to make a reasonable search for information, and enquiries of your senior management team/those responsible for insurance, or

  2. provide enough information to put a prudent insurer on notice that it ought to be making further enquiries to reveal material circumstances

All representations must be substantially correct and made in good faith. Any information disclosed