Proposed legal reform could make it harder for insurers to avoid paying out to its business customers based on an argument of non-disclosure.
A law passed in 1906 makes companies’ insurance invalid unless they tell their insurer all relevant information. This has resulted in over 11 per cent of British commercial insurance claims being challenged in the last two years for non-disclosure reasons.
Instead, a proposed shake up of the law could mean that companies have simply to provide a fair description of the risk they want to be covered against, and insurers then would be responsible for finding out any pertinent supplementary information.
The proposed changes are being considered by the Law Commission, which feels that the law in this area has fallen out of date. According to Reuters, this comes amid “signs that insurers, grappling with weak prices, are increasingly disputing claims in an effort to protect their profits.”
Morgan Clark has worked with many companies whose claims have been disputed by their insurers for a variety of reasons including non-disclosure. You can find out more by reading about our business insurance claims services.