What You Need to Know about the Insurance Act 2015
You’ve probably already heard of the Insurance Act 2015, but you might not know how it will affect you or your business – or even it will affect you at all! We’re here to clear up any confusion by explaining the sorts of changes that are expected to be rolled out when the Insurance Act 2015 is introduced next year.
The first thing to know is that the Insurance Act 2015 will only affect business insurance and non-consumer insurance. Consumer insurance will remain unaffected. While there are many changes that will be happening to business insurance policies, there are two areas that are of particular interest to businesses: warranties, and disclosure processes. So what exactly is going to change next year?
You may have warranties in place on your existing business insurance policy. That means that there are certain conditions you must meet in order for your business insurance policy to be valid. You may be required to have a working fire alarm, for example, or a comprehensive security system on site.
Under current law, your business insurance policy will be invalid if you fail to meet the requirements, which means that if you claim for fire damage but haven’t met requirements for a security system, you won’t be entitled to financial assistance in getting back on your feet. That’s the way it currently works.
The Insurance Act 2015 proposes that warranties are separated by category. This means that if you need to claim for fire damage, and you’ve met the requirements for the fire portion of your business insurance policy, then you will be able to claim, even if you have not met requirements relating to other risks, such as security or flooding, for example. The aim is to make the system better for businesses.
Currently, businesses are required to disclose anything to their business insurance company that they believe would have an impact upon the rate that the insurer is able to provide. This includes anything that may heighten security risk, fire risk, risk of flooding, risk of information breaches, and so on. If the information provided is found to be false, the insurance policy becomes invalid and may not pay out.
This is one of the most challenging aspects of business insurance, as many are not fully aware of aspects that could heighten risk. Under the Insurance Act 2015, businesses will not have the same obligation to disclose this information. Instead, businesses will be within their right to inform their business insurance company that there are specific areas where they are currently unable to provide full information.
What You Need to Do
It is expected that the Insurance Act 2015 will be rolled out in the UK in August 2016. While this might seem a while away, now is the time to act. It’s time for businesses to start reviewing their business insurance policies, ensuring that information is up-to-date to avoid paying for cover that isn’t needed.
Reviewing current business insurance policies is a great opportunity to take a more in depth look at what you’re paying, and making sure you’re not paying rates that are too high for what you need. If you think you could get a better deal on your business insurance, we’ll find it! Check out our easy-to-use online comparison tool at compareyourbusinesscosts.com to find the best business insurance policy.