I’ve mentioned the insurance Act 2015 a couple of times now and on 12th August 2016 it finally becomes law. Many Insurance Brokers and Insurance Companies have already tried to increase their compliance to meet the new standards but when your insurance policies fall due for renewal after this date be prepared potentially for a few more questions and a little more work.
Thankfully, several of the changes are mostly applicable to claims and relate to fraud or failure to comply with terms and conditions.
For example a genuine claim that becomes subject to fraud, would still allow a genuine part of the claim to be paid up until the fraudulent activity takes place. No refunds have to be made to a customer that has had their policy terminated due to fraud and so on. Likewise your claim should not be invalidated by breaking a term or condition unless it was directly linked to the claim.
What many customers are likely to notice is that brokers and insurers will want more precise information and ask more questions and be more concerned with answers or incomplete information. Insurers can no longer just claim missing data would have been a material and throw out a claim, so now more questions will be asked!
One of the biggest problems faced by customers and insurers is the number of customers that do not understand (or sometimes choose not to understand) how insurance sees them and this leads to purchasing incorrect policies. Whether this means the policies are entirely inappropriate so the policy is invalidated, or they have incorrect terms and conditions applied or charged an inappropriate premium. This is abundantly clear from a statistic that suggested 35% of claims from policies bought online are thrown out.
We frequently see this lack of understanding (or sometimes customers not caring and just wanting a cheap policy) and hope the new Act will encourage customers to better cover themselves and encourage better service from the insurance industry. As a rule, a company/ trader should consider what their main source of income or predominant activity is.
A few common examples we see are; If you sell at a market once a week but also sell online (or wholesale) and your non market turnover is greater than your market activities you would almost certainly be considered to be an online retailer that also happens to trade at markets. This does not necessarily negate your cover but you should bring this to the attention of the insurer/ broker. Often with small businesses insurers will be more flexible.
Caterers, especially those with mobile units or vans that do catering away from markets, especially weddings and parties and other forms of outside or mobile catering. Sometimes a small amount of this will be acceptable but again if non market activities are your primary source of income a standard market trader policy may not be suitable.
Traders, who offer non market related services such as home visits, if they involve installation or fitting.
Finally, If you are buying online and your retail type or trade isn’t listed, if you pick something you feel is similar you should check with the relevant company that they are happy with you being considered that trade type. Whilst, this can be frustrating (we have this problem a lot when arranging shop insurance) this is not something the new Act is likely to make much easier!
If in doubt get advice from a professional.