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Archive for 2015

Terrorism risks

Thursday, July 23rd, 2015

With the current increased threat from ISIS terrorists, terrorism is once again high on the agenda.

The terrorism risk has never really gone away but it has been changing.

The perception of a terrorism risk is probably that this will only affect London but this may no longer be the case.

The news reports are suggesting that people from across the country are traveling to Syria for Jihadist training so there is no reason to believe why they may not target outside of London too.

So far, the security forces have thwarted a good number of attempts and specialist anti terrorist units admit to being around three times busier than ever before.

When defining a Terrorist act the UK government provides a clear definition in the Terrorism Act 2000. It states Terrorism is the use or threat of action designed to influence the government or an international governmental organisation or to intimidate the public, or a section of the public; made for the purpose of advancing a political, religious, racial or ideological cause.

For further information or assistance in respect of terrorism cover please do not hesitate in contacting Hensure Business Insurance on 01270 758056.

Law Commission Reforms

Thursday, June 4th, 2015

“Insurance underpins a healthy and prosperous society. It enables businesses and individuals to protect themselves against risk. However insurance contract law is out of date and no longer reflects the realities of today’s commercial practices.

The provisions of the Insurance Act 2015 will modernise the law, balance more fairly the interests of insurers and buyers and provide a framework for an effective, competitive and trusted business insurance Market”, Stephen Lewis, Law Commissioner.


The UK’s Commercial insurance contracts are based on an Act that came into effect more than 100 years ago.

The Marine Insurance Act 1906 imposed a duty to disclose every material circumstance which would influence a ‘prudent underwriter’, potentially giving insurers the opportunity to decline claims where there may be no related material impact, for example intruder alarm failings on a flood claim (although this is rarely used in today’s market it does bring uncertainty to the contract).

So much has changed during that time and the need to modernise rules governing insurance contracts between businesses and insurers is essential.


Change 1. Non Deliberate or Non-Reckless Non-Disclosure/Misrepresentation

There remains a responsibility for presentation of the risk by the customer and this is explained further in the Act.

  • If the insurer would have charged a higher premium had they known about the circumstances of the misrepresentation then market practice will be that the insurer will look to charge the insured the additional premium when the non- disclosure or misrepresentation becomes know to them.
  • Where the insurer would not have written the risk then they can treat the insurance as if coverage was never attached but must return the premium.
  • If the insurer would have imposed terms, they can treat the insurance as if it had been entered into on those different terms ( from the date of the breach).

Change 2. Deliberate or Reckless Non Disclosure/Misrepresentation – Fraud

Where non-disclosure or misrepresentation is deliberate or reckless, the insurer has the right to avoid the policy and also to retain the premium.

Change 3. Warranties

The insurers will aim to remove warranties from their policies and replace with conditions precedent to liability and conditions.

Whilst insurance companies envisage most policies will be “Warranty Free”, they may apply by exception. In these instances they would explain the rationale to the broker or customer. Where warranties are used and are not complied with by the insured, it will only suspend cover and not terminate the policy in accordance with the Insurance Act.

Change 4. Basis Clause

This will be removed from the wordings as such clauses are being abolished

In practice this means :
• The insurer will treat the basis of contract clause as having no effect in all documentation.
• The insurer will not void the policy or refuse indemnity where the breach of specific risk condition is not related to the risk of loss.

Confidence in the insurers ‘Fair’ settlement of claims and certainty that the policy will perform as expected. Benefit of the insurers insight and ‘good customer outcomes’ approach.

Flood RE the long term flood insurance solution in the UK

Wednesday, January 21st, 2015

In 2011, the Association of British Insurers formally recommended Flood Re as a long term flood insurance solution in the UK.

After lengthy discussions between the Government and the insurance industry an outline agreement was reached in June 2013.

Royal Assent was gained less than a year later in May 2014 and the ABI is working hard to get Flood Re established in the summer of 2015.

The Flood Re Scheme will be a not for profit flood reinsurance fund, owned and managed by the insurance industry and established to ensure the highest risk domestic properties can receive affordable cover for the flood element of their household property insurance.

Data Breaches

Wednesday, January 21st, 2015

Over the last 12 months the reported instances of a’ Data breach’ have soared.

What is Data Breach ?

A data breach usually involves financial information such as credit card or bank details, personal health or personally identifiable information being stolen or lost and sensitive, protected or confidential data is copied.

There are also more and more examples of companies having their I T systems hacked in to .

The Insurance market has responded to these problems by highlighting the need for Cyber Liability cover.

Is it time for your company to take these risks seriously and consider a Cyber Liability policy?

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