No Employers' Liability? Big Brother is Watching You!
Okay, Big Brother may not be watching you but in this modern age of Social Media and Whistle Blowers are you leaving yourself open to legal action?
It may seem like a good idea to withhold information when obtaining insurance, but with the onset of the Insurance Act brokers, insurers and underwriters are more active in ensuring they are providing an open and honest service. Part of our service is to check every activity carried out by your business meticulously. The reason we do this is so that should you need to make a claim the insurer will honour your policy.
Any company that believes insurance brokers are only there to find the best possible premium for their coverage is living in the past. Insurance agents do offer a professional service, and only a part of their remit is to find you the best price. However, regulatory bodies are doing more to ensure you are treated fairly and receive the correct insurance, and that means we have to do our homework and research to make sure every effort is made to gather all the facts.
It's not just brokers either, insurers and underwriters carry out the same attention to detail checking social media, company websites and other available public information. You may think this is a little intrusive, and we understand that, but if we miss something, it could end up with your business facing hefty fines, or worse still having a claim refused due to exclusions.
Currently, you can be fined £2,500 every day you are not adequately insured, and you can also be fined a further £1000 for not correctly displaying your employer's liability certificate or refuse to make it available to inspectors when they ask. Full information can be found here https://www.gov.uk/employers-liability-insurance. Something like that could put a serious damper on the romantic weekend away you had planned with the person you love, all because you wanted to save a few extra pounds.
Since the inception of the Insurance Act, not only you but also insurance brokers have the duty of fair presentation.
To quote Berwin Leighton Paisner http://www.blplaw.com/expert-legal-insights/articles/insurance-act-2015-quick-guide-what-are-the-key-changes
1. New duty of fair presentation (Business Contracts only)
The Act aims to encourage cooperation between an insured and insurers at the pre-contract stage. It does this by introducing a new obligation on an insured to make a fair presentation of a risk to its insurer.
Under the Act, an insured is required to:
disclose every material circumstance which the insured knows or ought to know, and conduct a reasonable search of its records to discharge the duty of fair presentation.
The fair presentation should:
disclose information in a reasonably clear and accessible manner. ‘Data dumping’ will not be permissible and the insured should ‘signpost’ material information to bring it to the insurer’s attention, and ensure that:
(i) every material representation as to a matter of fact is substantially correct, and
(ii) every material representation as to a matter of belief or expectation is made in good faith.
If the insured is in breach of the duty of fair presentation deliberately or recklessly, the insurer can avoid (i.e. rescind) the policy and keep all premium(s) paid.
If the insured’s breach is not deliberate or reckless:
The insurer can avoid the policy but return all premium(s) paid if it can prove it would not have entered into the policy at all.
If the insurer would have entered into the policy but on different terms, the policy will be treated as if it included those terms.
If the insurer would have entered into the contract but would have charged a higher premium, the insurer may reduce the amount proportionately to be paid on a claim to reflect that premium adjustment."
"Thanks to Berwin Leighton Paisner for the use of their content and thanks to Caroline Grant (BLPLaw London Press Enquiries) for arranging permission so quickly."
So please be aware that in the course of our duties we will do everything in our power to gather the facts to protect you, your employees and your business (Not to mention your romantic weekend away). It's in everyone's best interest especially yours to disclose a full and proper account of your business' activities.
If an insurer finds any discrepancy, including withholding information, it could affect your chances of obtaining insurance both now and in the future.
Let's look at it another way. You go to your doctor with chest pains, and he writes you a prescription for painkillers without even looking at you, would you be happy about that? Of course not. However, if he was thorough and gave you a good medical check-up, blood test, checked your blood pressure, family medical history, etc. and did everything in his power to ensure there wasn't anything seriously wrong with you, would you be happier? Yes, of course, and you'd also have peace of mind.
Most problems arise with underinsurance, especially with commercial insurance coverage. Just ask yourself this question; If there was a National Business Insurance that you paid into each month would you want the best service possible? Better still what if insurance was free? Would you accept lacklustre cover then? Would you be inclined to withhold information that leaves your business at risk?
Any insurance broker who cares about their clients will do everything in their power to make certain you have the correct cover, that has never changed. Now though, due to the Insurance Act, this attention to detail is part of UK law.
So, if you want the best service, correct cover and still get an affordable premium, please help us to help you and disclose all the facts, and we in return will provide you with the best advice and the best service that we can offer.