Writing in CIR magazine, BLM partner Gemma Pearce has examined the impact that the Insurance Act, which will come into place next August, is likely to have on marine insurance and policy wordings.
“Insurance contracts still remain contracts of good faith, but the remedy for breach is no longer total avoidance of the contract from inception. Additionally, while the onus still remains largely on the insured – who is still required in pre-contract negotiations to disclose every ‘material circumstance’ which s/he knows or should know of under the Act, an insured will also satisfy the duty of utmost good faith (and pre-contract disclosure) if ‘sufficient information to put a prudent insurer on notice that it needs to make further enquiries to reveal such material circumstances’ is provided.
“Under the Act, any more disadvantageous term for the insured, when compared with the Act, must be clear and unambiguous as to its effect and the insurer is obliged to bring such a term to the insured’s or the broker’s attention before the contract is entered into.”
You can read Gemma’s comments in full on the CIR website.