Industry News

Insurance Act 2015

21 October 2016

The Insurance Act 2015 came into force on 12 August 2016, introducing a higher standard of disclosure by firms when arranging PII. 

Firms are now required to make a ‘fair representation of risk’ at proposal stage in order to satisfy the test, to include not only risks of which they are aware, but also those of which they ought to be aware or ought to have disclosed after making reasonable enquiries.  Effectively, this is information which would influence the judgment of a prudent insurer in determining whether to accept a risk or which would put it on notice to make further enquiries. 

Although failure to make a fair representation would not entitle insurers to avoid a claim or cancel the policy, they could seek reimbursement or bring an action for non-disclosure or breach of the duty to make a fair representation. 

The changes highlight the increased importance of good internal risk and compliance procedures and training by firms.  The SRA Minimum Terms and Conditions of Professional Indemnity Insurance have also been amended to reflect the changes.  


 

 


 

Ian Braithwaite
Client Relationship Manager

T: 0845 056 3949
M: 0743 727 4046
E: ian.braithwaite@lbslegal.co.uk

For General Enquiries: Email enquiries@lbslegal.co.uk
24 hour Helpline 0845 0563949
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