2016-05-13

The Insurance Act 2015 will come into force this August and is expected to provide the biggest industry shake-up since 1906. Learn all about the Act and what it could mean for you:

What Is The Insurance Act 2015?

The Insurance Act 2015 is designed to "re-engineer the foundations on which policies are built." It will clarify the rules and regulations regarding what customers need to tell their insurers, with the hope of raising the percentage of claims that are paid out. This will see a switch in the industry from insurer-friendly to customer focused.

This legislation will replace the 1906 Marine Insurance Act with a more current up-to-date set of regulations. And the British Insurance Brokers' Association (BIBA) is encouraging the industry to accept this new fairness.

Steve White, BIBA Chief Executive, said:

"The industry has never experienced such a massive change in the legislation governing our practices.

"We would like to see brokers and insurers alike unite in the way in which the Act is adopted ideally by embracing our implementation guide to create a transparent and fair approach for all."

Steve Lewis, RSA Insurance Group CEO UK & Western Europe, has also commented. He told the press,

"The Act will help to modernise the industry and improve the service we provide to our customers."

How Will The New Act Affect You?

As a business owner, from August you will be responsible for ensuring that your insurance provider understands the sort of risks your company is running and therefore how much cover you'll require. You will also be required to consult with anyone who may benefit from the cover if they know of any material information that may influence the risk.

This in theory should reduce the number of non-disclosure responses and improve the probability that you would receive a payout should you make a big claim.

Due to coincide with a clause in the newly passed Enterprise Act, there will also be pressure on insurers to respond to insurance claims promptly. This means, if you make a claim, you should receive a response quicker than ever as of August.

If prompt payment is not received and your business is affected, you may be able to claim damages for the late payment under the new scheme.

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