What is the Insurance Act 2015?

The Insurance Act 2015 is a piece of UK government legislation that came into effect on August 12 2016. The Act is designed to make insurance clearer and fairer by clarifying rules relating to your relationship with your insurer, including when your insurer is allowed to reject a claim.

Frequently Asked Questions:

What do you need to know about the Insurance Act 2015?

The main three areas affecting customers are:

  • The Duty of Fair Presentation: You must undertake a reasonable search to provide Us with all material information relating to the insurance. We may make further enquiries as necessary.
  • Terms and Conditions: If you make a claim we will take into account Your Policy terms and conditions that are relevant to the claim and that apply when the claim occurs.
  • Making a claim: If you don't fully meet our terms and conditions or provide all material information, we will, when processing the claim, take this into account. This may reduce your claim payment or could result in your policy being invalid. If you deliberately or recklessly provide inaccurate information your policy may be invalid.

Before a contract of insurance is entered into, the policyholder must undertake a reasonable search to provide us with all material information relating to the insurance, so you can make a fair presentation of the risk to us. The 'duty of fair presentation of risk' means that a policyholder must tell us about every 'material circumstance' which they know or ought to know.

In order to comply with your duty to make a fair presentation you must also have conducted reasonable searches for all relevant information held within your business. This includes information held by your senior management and anyone responsible for your insurance; and by any other person for whom cover is provided by this insurance.

You must give this information to us when you're buying, changing, or renewing your insurance policy as it could influence our decision about whether to offer you a policy or not and what terms and conditions to apply. This includes any special or unusual facts relating to the risk, and any concerns that have led to you looking for insurance to cover this risk.

If you're unsure if something is a 'material circumstance', you should tell us about it.

If you've failed to make a fair presentation of risk we can void the policy. This means it can be treated as if it never existed. When looking at voiding the policy we will consider whether this has been done deliberately, recklessly, or carelessly.

If you've deliberately or recklessly failed to make a fair presentation of risk and we would not have insured you had we known the full facts, we can void your policy and keep the premium.

If you didn't do it deliberately or recklessly but carelessly and we still wouldn't have insured you had we known the full facts, we can void your policy but we must refund you the premium.

If we continue to insure you but this would have been on different terms, conditions, excesses, an increased premium, or additional endorsements, then in the event of a claim, the claim would be treated as if these apply to the policy. This could result in the claim payment being reduced or the claim itself could be invalid based on the additional conditions, terms, excesses, and endorsements.

Where can you find your policy wording?

If you have an online account you'll be able to access it there. You can also find our latest policy wordings on www.directlineforbusiness.co.uk. Please check when your policy starts as it's important to download the policy wording that applies to you.

As with all insurance policies, you should read your policy documents to make sure all the details are correct and that you have the right level of cover you need. If you need to make any changes or have any questions about your policy, let us know either online or over the phone.

Find out more about the Insurance Act 2015.