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Insurance Act 2015 - a guide for our brokers

The Insurance Act comes into force on the 12th August 2016 and represents one of the most significant changes in commercial insurance law to date. The Act is being introduced to change the law so it reflects modern business relationships and re-balances rights and remedies.

Ecclesiastical fully supports the introduction of the Insurance Act 2015. As a trusted specialist insurer, our
current approach to claims and the way we conduct our business complies with the spirit of the Act and we
will be fully adhering to the principles contained in the Act.

Policy wording updates

In line with the Act we have updated our policy wordings and made some additional changes - both are outlined below.

New policy wordings will be available for renewals and new business from 1 August 2016. We will not be providing renewal business with new policy wordings.

New policy documents for your clients will be available online from 1 August 2016.

  • View policy changes


    Insurance Act changes

    This is a copy of the information that will be provided to your client with their renewal invitation.

    General condition changes

    We have updated two conditions to reflect the actions we might take if you misrepresent a risk to us, or you, or someone acting on your behalf makes a fraudulent claim. If the policy did not previously include these conditions, they have now been added.

    1. Policy voidable condition
    If your policy included a Misrepresentation condition this allowed us to cancel the policy from inception following discovery of a misrepresentation by you of the risk to be insured. 

    We have updated this condition, including renaming the condition to ‘Policy voidable’, to reflect the actions we may take if you fail to make a fair representation of the risk to us. A differentiation is now made between deliberate or reckless misrepresentation, where we may cancel the policy, and unintentional (but not reckless) misrepresentation where we will take into account the action we would have taken if you had made a fair representation of the risk to us. 

    2. Fraudulent claims condition
    If your policy included a Fraudulent claims condition this previously allowed us to cancel the policy from inception following discovery of a fraudulent claim.

    We have updated this condition to reflect the actions, in addition to cancellation, which we may take if you or a person acting on your behalf makes a fraudulent or exaggerated claim.  If we choose to cancel the policy we will only do so from the date of the fraudulent act.

    These wordings are detailed in full in the general conditions section of the new policy booklet. Please read the Policy voidable and Fraudulent claims conditions and contact us if you have any queries.

    Basis of contract clauses

    The Insurance Act banned the use of basis of contract clauses which turned information provided to us at new business or renewal into the terms of cover. In response to the Act we have removed any reference to a basis of contract clause. 

    Condition precedent to liability

    Where we use this term, we have now defined our intention. The definition clarifies that your claim will not be paid if you fail to comply with a condition, but only if non-compliance with the condition is material to the loss.

    The Insurance Act banned the use of warranties. Warranties required absolute compliance in order for a claim to be paid even if the warranty was not relevant to the loss. If your policy included warranties these have now been replaced with conditions precedent to liability.

    General policy changes

    The following updates apply, unless your wording had already been reprinted and updated to this effect.

    1. General conditions
    We have added general conditions relating to Sanctions and Assignment.

    The new Sanctions condition confirms that we comply with laws and regulations of the European Union, United Kingdom or United States of America and that we will not provide benefits under this policy where we would be exposed to any sanction, prohibition or restriction under such laws.

    The new Assignment condition states that you must not assign any of the rights or benefits under your policy without our prior written consent.

    The existing Law applicable and Rights of third parties wordings now form part of the general conditions section.

    2. General exclusion changes
    The Radioactive contamination general exclusion has been updated to additionally exclude loss or damage caused by nuclear, chemical, biological, bio-chemical or electromagnetic weapon.

    The general exclusion of War has been simplified.

    3. Property damage extensions
    We have clarified that other than where specifically stated, extensions to the Property damage section do not increase our liability beyond the sums insured. 

    4. Property damage exclusion changes
    The insurable events of Riot and Malicious persons now exclude damage occasioned by confiscation or destruction or requisition by order of the government or any public authority.  This exclusion has been moved from the General War exclusion.

    We have updated our electronic risks exclusion and have applied this to all of our policies.

    If your policy contained an electronic risks exclusion this has been replaced with a clearer wording. Other changes have been made to clarify that damage arising out of misinterpretation, use or misuse of data and damage arising from operator error in respect of data is now excluded.

    5. Terrorism
    We have updated the general exclusion, including the addition of a new definition applying for England, Scotland and Wales.

    New policy section

    If your policy contained the option to insure against Terrorism this has now been added as a separate section of cover in the policy booklet.

    In line with this change, any insurable event for Terrorism, including any extensions for ‘non-certified’ Acts of Terrorism, in other policy sections has been removed. Where an act is not certified as an Act of Terrorism, damage would be considered under the property, business interruption or other applicable sections of the policy.

    Other changes have been made to exclude bankers blanket bonds and the exclusion relating to loss caused by computer hacking and viruses (and the like) also excludes phishing.

Getting in touch

If you have any further questions please contact your Relationship Manager or contact your regional office.

Ecclesiastical Insurance Group plc (EIG) Reg No 1718196. Ecclesiastical Insurance Office plc (EIO) Reg No 24869. Ecclesiastical Life Ltd (ELL) Reg No 243111. Ecclesiastical Financial Advisory Services Ltd (EFAS) Reg No 2046087. Ecclesiastical Underwriting Management Ltd (EUML) Reg No 2368571. E.I.O. Trustees Ltd Reg No 941199. EdenTree Investment Management Ltd (EIM) Reg No 2519319. All companies are registered in England at Beaufort House, Brunswick Road, Gloucester GL1 1JZ. EIO and ELL are authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Firm Reference Number 113848 (EIO) and 110318 (ELL). EFAS and EIM are authorised and regulated by the Financial Conduct Authority. Firm Reference Number 126123 (EFAS) and 527473 (EIM). EUML is an appointed representative of EIO who is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Firm Reference Number 402228.