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The Insurance Act 2015 – and how it will affect you

Have you ever felt that the dice are loaded sometimes, when it comes to insurance, with more of the contract weighted in favour of the insurer, rather than you the insured? The good news is that the tables have been turned somewhat – or at least a more level playing field created – by the coming into force on the 12th of August 2016 of the Insurance Act 2015.

What’s changed?

Disclosure of material circumstances

The new legislation takes issue with the way in which an especially onerous burden was formerly placed on the insured when it came to disclosing every aspect of the risks to be insured.

The new legislation continues to require the insured to inform the insurer about all “material circumstances” likely to affect those risks, but also allows for the fact that the insured might simply be giving an indication of possible circumstances, which it is now the insurer’s responsibility to explore further and ask relevant questions about.

In other words, explained the National Law Review in an article on the 29th of June 2016, the insured has a duty to provide the type of information which is likely to be a signal for any prudent insurer to ask more questions.


Greater changes are made in the Insurance Act 2015 with respect to the remedies to be used by an insurer if it appears that the insured has failed to disclose every fact or circumstance relevant to the risks which are being insured.

In the past, for instance, if the insurer had been able to show that, for whatever reason, the insured had failed to disclose anything the insurer considered to a material fact or circumstance, the insurer was at liberty simply to avoid any subsequent claim and declare the insurance contract invalid. Any claim settlement already made, then needs to be repaid to the insurer.

Instead, the new legislation makes provision for remedies which are “proportionate”.

What is meant by this is that if the failure to disclose material circumstances was the result of a deliberate misrepresentation or recklessness on the part of the insured, the insurer may continue to avoid the insurance contract.

If the failure to disclose was a purely innocent or negligent oversight on the part of the insured, however, the insurer is now required to adopt a more flexible approach and declare how it might have handled the initial insurance proposal if those material circumstances had been fully disclosed.

If it emerges that the insurer might still have entered into a contract of insurance with the insured, but on different terms, the contract still holds good, but on the basis of those revised terms.

If it emerges that the insurer would not have entered the contract if it had known the relevant material circumstances, it may be possible for the insurer to avoid the contract – but any premiums already paid by the insured must then be refunded.


The other principal amendment introduced by the Insurance Act 2015 relates to the way in which insurers must honour warranties.

In future, an insured is not to be held liable for any breach of warranty (and a claim thereby avoided) if steps are taken to repair that breach some time before any claim is made.

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