Practical Guide to the Insurance Act 2015

Page 175 Index Index affirmation: loss of right to avoid 5.10 , 5.38 agency and subscription risks 5.45 agent of insured 5.44 ; commission 5.17 ; confidential information 4.13 –19; contracting out of Act: transparency 8.13 ; deemed not to be known: fraud against principal by 4.61 –3; fair representation, duty of 3.11 , 3.26 ; knowledge 4.10 , 4.11 , 4.13 –19, 4.27 , 4.32 , 4.61 –3, 5.9 ; reasonable search 4.27 agent of insurer: confidential information 4.57 ; deemed not to be known: fraud against principal by 4.61 –3; knowledge 4.38 , 4.39 , 4.40 , 4.57 agent for other insureds: duty of fair presentation 3.6 , 3.7 , 3.10 applicable law 2.13 , 7.1 AIRMIC 4.26 Australia 7.6 , 7.7 , 7.8 , 7.31 aviation insurance 1.8 avoidance 5.15 –20, 5.28 ; affirmation and loss of right to avoid 5.10 , 5.38 ; composite policy with more than one insured 5.16 , 5.20 ; contracting out of Act: disadvantageous term 8.7 ; deliberate or reckless breach 5.10 ; example 5.39 –40; fraudulent claims 1.17 , 9.2 , 9.4 , 11.1 ; premium 5.15 , 5.16 –20, 5.32 ; utmost good faith and 1.12 –14, 1.17 , 2.4 , 3.12 , 5.10 , 9.2 , 9.4 , 11.1 , 11.2 , 11.3 ; variations, contractual 5.31 , 5.32 ; waivers 5.38 , 10.5 basis clauses 1.15 –16, 6.1 –2; abolition of 6.3 ; contracting out of Act and 8.5 ; permissible alternative 6.4 beneficiaries, third-party: deliberate or reckless breach 5.11 ; fair representation, duty of 3.7 , 3.8 , 3.10 , 9.13 British Insurance Law Association (BILA) 1.8 , 3.15 brokers 3.17 , 3.26 , 3.27 , 5.44 ; commission 5.17 –18; confidential information 4.13 –19; contracting out of Act: transparency 8.13 , 8.15 , 8.16 , 8.17 , 8.23 ; knowledge 3.11 , 4.10 –11, 4.13 –19, 4.27 , 4.29 , 4.34 ; neither deliberate nor reckless breach 5.13 ; subscription risks 5.44 , 5.46 burden of proof: deliberate or reckless breach 5.7 ; exclusion clauses 7.22 captive insurance company: reasonable search 4.28 causation test 7.4 , 7.5 , 7.6 –10, 7.12 –13, 7.16 , 7.26 , 7.28 , 7.30 , 7.31 change in circumstances or in law: excuses for breach of warranty 6.41 charitable trusts: knowledge of insured 4.4 , 4.5 –11 claims already paid: avoidance 5.15 ; deliberate or reckless breach 5.10 ; proportionate reduction of 5.26 ; termination from date of variation 5.31 ; varying terms of contract, remedy of 5.23 –4 co-insurance in subscription market: LMA standard clause 5.49 commencement 2.1 –5 commission: brokers 5.17 –18 companies see corporations composite policy with two or more insureds 3.6 , 3.7 ; avoidance and premium repayable 5.16 , 5.20 ; deliberate or reckless breach 5.12 ; proportionate reduction of claim 5.27 ; varying terms of contract, remedy of 5.27 conditions 7.23 ; precedent 6.5 , 6.9 , 6.32 , 6.36 –40, 7.19 , 7.23 , 11.6 confidential information 4.12 –19, 4.56 –7 confidentiality: breach of warranty of 6.28 consent: confidential information 4.18 consortium leaders 5.45 Page 176 consumer insurance: contracting out 8.1 , 8.3 , 8.4 , 8.24 , 9.6 ; fraudulent claims 9.1 , 9.6 ; meaning 2.16 , 3.2 ; non-consumer vs 2.15 –21; pre-contractual duties 3.1 –2, 8.4 ; remedies 5.1 consumer vs non-consumer insurance: application of Act 2.15 –21; business, trade or profession 2.18 ; case law in other areas 2.19 ; mixed use 2.16 , 2.20 ; objective assessment 2.17 contracting out of Act 8.1 –2; commencement 2.1 ; consumer insurance 8.1 , 8.3 , 8.4 , 8.24 , 9.6 ; disadvantageous terms 8.2 , 8.7 –8; entire agreement clauses 8.6 ; exceptions: non-consumer insurance 8.5 –6; flexibility 8.10 , 8.11 ; fraudulent claims 9.6 ; group insurance 8.24 ; meaning of consumer insurance 8.3 ; small businesses 8.1 , 8.10 , 8.12 , 8.14 ; sufficient steps to draw term to insured’s attention 8.9 , 8.10 , 8.11 –17, 8.23 , 8.24 ; term must be clear and unambiguous as to effect 8.9 , 8.10 , 8.18 –23; transparency 8.1 , 8.2 , 8.6 , 8.7 , 8.9 –23, 8.24 conveyancing 4.29 corporations: deliberate breach 5.9 ; directing mind and will 3.22 , 4.7 ; fraudulent claims 9.11 , 9.12 ; groups 3.7 , 3.10 , 4.28 ; knowledge of insured 4.4 , 4.5 –11, 4.28 , 5.9 ; representation of expectation or belief 3.22 , 3.23 coverholders 5.45 criminal convictions 3.17 , 6.32 ; directors’ and officers’ liability (D&O) policies 6.4 , 7.19 ; employees of insured 3.25 , 6.4 , 7.19 damages 5.28 , 5.29 , 11.4 ; fraudulent claims 9.2 damages for late payment 1.3 , 1.18 –19, 10.1 –3; causation 10.13 ; commencement 2.2 ; contracting out 8.5 , 8.6 , 8.7 , 8.16 , 8.21 , 8.22 , 10.21 ; implied term 10.2 ; limitation period 10.20 ; parliamentary passage of Insurance Bill 1.21 , 1.23 ; reasonable grounds for disputing claim 10.8 –10; reasonable time 10.4 –7; reinsurance 10.15 –19; remedies 10.11 –14; small businesses 10.14 data-dumping 1.12 , 1.13 , 3.29 , 3.31 ; reckless or deliberate breach 5.7 databases, subscription: knowledge of insurer 4.41 , 4.42 , 4.45 , 4.47 date contract entered into 2.7 –12, 3.26 date of inception 2.7 deceit 3.12 , 5.28 , 11.4 definitions: circumstance 3.14 ; consumer insurance contract 2.16 , 2.20 , 8.3 ; contract of insurance 2.1 ; senior management 4.5 deliberate or reckless breach 5.7 –12, 5.31 ; duty to pay claims within reasonable time and 8.5 , 8.6 , 8.21 ; neither 5.13 –14, 5.32 , 5.35 directors’ and officers’ liability (D&O) policies 6.4 , 7.19 disclosure of documents in civil proceedings 4.29 disclosure, duty of 3.1 –4, 3.13 –17, 3.22 ; disclosure putting insurer on notice 3.33 –7; knowledge see separate entry ; matters not required to be disclosed 3.41 ; misrepresentation and non-disclosure 3.24 –5; reasonably clear and accessible 3.29 –32, 3.36 ; timing and content of presentation 3.26 –7; what must be disclosed 3.38 –40 entire agreement clauses 8.6 estoppel 6.9 ; fraudulent claims 9.5 excess insurance 5.43 , 5.50 –1 exclusion clauses: terms not relevant to actual loss 7.20 –2, 7.23 expert evidence: matters not required to be disclosed 3.41 ; reasonable search 4.29 ; varying terms of contract: remedy for breach of fair presentation duty 5.22 Explanatory Notes 1.28 ; duty of fair presentation 3.9 ; knowledge 4.1 , 4.8 –9, 4.11 , 4.29 , 4.36 , 4.46 , 4.55 , 4.63 ; remedies for breach of fair presentation duty 5.8 ; terms not relevant to actual loss 7.20 , 7.25 –6; contracting out 8.13 ; fraudulent claims 9.3 , 9.7 extent of application of Act 2.14 facts 3.17 , 3.39 ; opinion or belief 3.39 facultative reinsurance: confidential information 4.19 ; date contract entered into 2.11 facultative/obligatory (fac/oblig) contracts: date contract entered into 2.10 fair presentation, duty of 1.3 , 6.4 , 9.13 , 11.1 , 11.5 ; commencement 2.1 , 2.3 , 2.4 , 2.5 ; disclosed, what must be 3.38 –40; disclosure, duty of 3.13 –17; disclosure putting insurer on notice 3.33 –7; disclosure reasonably clear and accessible 3.29 –32, 3.36 ; fac/oblig open cover 2.10 ; fraud unravels all 3.36 ; knowledge see separate entry ; matters not required to be disclosed 3.41 ; misrepresent, duty not to 3.18 –23; misrepresentation and non-disclosure 3.24 –5; owed by insured 3.5 –12; pre-contractual duties 3.1 –4; remedies see remedies for breach of fair presentation duty; timing and content of presentation 3.26 –8; variations, contractual 2.4 , 5.30 Page 177 fiduciary relationships 5.45 Financial Conduct Authority (FCA) 10.6 financial institution crime insurance: disclosure putting insurer on notice 3.35 floating policies: date contract entered into 2.9 fraud against principal by agent: matters deemed not to be known 4.61 –3 fraud unravels all 3.36 fraudulent claims 1.17 , 9.1 –4, 11.1 ; attribution of fraudulent intent 9.11 –12; collateral lie 9.6 , 9.9 ; commencement 2.1 , 2.5 ; contracting out of Act 9.6 ; fraudulent act 9.6 ; group insurance 9.13 ; old law 9.2 ; relevant event giving rise to claim 9.7 ; remedies 9.4 –10; right to terminate 9.4 , 9.5 –10; waivers 9.5 , 9.9 fraudulent misrepresentation 5.28 freedom of contract 8.1 good faith: representation of expectation or belief 3.17 , 3.18 , 3.22 –3; utmost see separate entry group companies: fair presentation, duty of 3.7 , 3.10 ; reasonable search 4.28 group insurance: contracting out of Act 8.24 ; fraudulent claims 9.13 history of insurance law reform 1.6 –8 hold harmless fiction 1.19 implied representation 5.46 ; conveyancing 4.29 implied term about payment of claims see damages for late payment implied warranties 6.8 , 6.9 , 6.18 inception date 2.7 inducement 5.3 –5; subscription risks 5.47 inequality of arms 1.14 insolvency 3.17 Insurance Conduct of Business Sourcebook (ICOBS) 10.6 interest: compound 10.11 , 10.14 ; damages for late payment 10.11 , 10.14 ; hold harmless fiction 1.19 ; premium repaid 5.19 internet: knowledge of insurer 4.41 , 4.51 interpretation: aids 1.24 –8; utmost good faith 11.5 –6, 11.7 intranet: knowledge of insurer 4.41 jurisdiction clause 2.13 knowledge 1.4 , 3.4 , 3.14 , 3.22 , 4.1 –4; commencement 2.4 ; confidential information 4.12 –19, 4.56 –7; contracting out of Act: disadvantageous term 8.7 ; deemed not to be known 4.61 –3; deemed to be known 3.23 , 4.3 , 4.58 –60; deliberate breach and 5.9 ; fraudulent claims 9.11 ; of insured 4.1 , 4.2 –34, 4.58 –63, 5.9 , 8.7 ; of insurer 3.41 , 4.1 , 4.35 –63; non-disclosure and 3.24 ; senior management 4.5 –9, 5.9 ; those responsible for insured’s insurance 4.10 –11, 5.9 knowledge of insured 4.1 , 4.2 –3; brokers 3.11 , 4.10 –11, 4.13 –19, 4.27 , 4.29 , 4.34 ; confidential information 4.12 –19; contracting out of Act: disadvantageous term 8.7 ; deemed not to be known 4.61 –3; deemed to be known 3.23 , 4.3 , 4.58 –60; deliberate breach and 5.9 ; differences between old and new law 4.31 –4; forgotten matters 4.3 ; not an individual 4.4 ; (senior management) 4.5 –9, 5.9 ; (those individuals responsible for insured’s insurance) 4.10 –11, 5.9 ; partnerships 4.4 ; reasonable search 4.3 , 4.4 , 4.6 , 4.9 , 4.20 –30, 4.32 , 4.34 , 8.8 ; timing of exposure to information 4.3 knowledge of insurer 3.41 , 4.1 , 4.35 –57; confidential information 4.57 ; deemed not to be known 4.61 –3; deemed to be known 4.58 –60; ought to know 3.41 , 4.39 –47; presumed to know 3.41 , 4.48 –55 liability policies: exclusions clauses 7.21 , 7.22 ; fraudulent claims 9.8 limitation period 1.19 ; damages for late payment 10.20 limited liability partnerships: knowledge of insured 4.4 , 4.5 –11 lineslip 5.45 Lloyd’s Market Association (LMA) 3.19 , 4.4 , 5.18 ; co-insurance: standard clause 5.49 ; definition of “insured’s organisation”: standard clause 4.28 ; definition of “senior management”: standard clause 4.9 ; rely on effect of legal advice without waiving privilege: standard clause 10.9 ; standard clauses contracting out of ss. 10 & 13A Insurance Act 8.16 –8, 8.20 –2; standard clause contracting out of s.11 Insurance Act 8.19 –20 Lloyd’s Minimum Standards for Conduct Risk 10.6 Page 178 long-tail contracts: date contract entered into 2.12 loss adjusters 9.12 loss experience, disclosure of existing 3.17 managing general agents 5.45 marine, aviation or transport insurance 1.8 marine insurance: exclusion clauses 7.21 ; term defining risk as a whole 7.18 , 7.23 ; territorial limits 7.18 ; warranties 6.14 , 7.33 materiality 1.6 , 1.16 , 3.2 ; disclosure, duty of 3.13 , 3.15 –17; misrepresent, duty not to 3.20 misrepresentation 1.6 , 1.13 , 1.14 , 3.12 , 3.34 ; co-insurers in subscription market 5.49 ; corrected before insurance underwritten 3.28 ; damages 5.28 , 5.29 , 11.4 ; duty not to misrepresent 3.18 –23; fraudulent 5.28 ; knowledge of insurer 4.35 ; negligent 5.28 , 5.29 ; non-disclosure and 3.24 –5 mistakes: corrected before insurance underwritten 3.28 moral hazard 7.19 , 9.3 multiple persons insured under same policy: deliberate or reckless breach 5.12 ; fair representation, duty of 3.5 –12 negligent misrepresentation 5.28 , 5.29 New Zealand 7.6 , 7.18 non-consumer insurance: basis clauses 6.1 , 8.5 ; consumer vs 2.15 –21; contracting out of Act 8.1 , 8.3 , 8.5 –6, 8.10 , 8.13 , 8.24 ; fair representation, duty of see separate entry ; fraudulent claims 9.1 non-executive directors 4.8 Northern Ireland 2.14 notification clause 7.19 obligatory/obligatory (oblig/oblig) contracts: date contract entered into 2.9 official secrets 4.12 open cover insurance: date contract entered into 2.8 , 2.9 , 2.10 opinions: duty of disclosure 3.17 , 3.39 overview 1.1 –5 P&I Clubs 8.1 parliamentary passage of Insurance Bill 1.20 –3; Special Public Bill Committee 4.8 –11, 4.26 , 4.32 , 7.14 partnerships: knowledge of insured 4.4 placing brokers 3.26 ; knowledge 3.11 , 4.11 ; neither deliberate nor reckless breach 5.13 pre-contractual duties 3.1 –4; fair presentation, duty of see separate entry premium 5.21 , 6.28 ; avoidance 5.15 , 5.16 –20; brokers’ commission and 5.17 ; composite policy with more than one insured 5.16 , 5.20 ; damages 5.29 ; deliberate or reckless breach 5.10 , 5.31 ; example of operation of remedies 5.39 –42; fraudulent claims 9.4 , 9.9 ; MIA 1906 s84 and new remedies 5.37 ; negligent misrepresentation 5.29 ; payment warranties 6.13 , 6.18 , 6.20 , 6.21 , 7.19 ; proportionate reduction of claim 5.25 –7, 5.32 , 5.35 , 5.36 , 5.42 ; variations and remedies 5.31 , 5.32 , 5.35 ; varying terms of contract, remedy of 5.21 , 5.24 problem of old law 1.11 professional indemnity insurance: ‘claims made’ policy 9.7 ; fraudulent claims 9.7 , 9.10 ; premium payment warranty 6.13 proportionality: reasonable search 4.29 proportionate reduction of claim: breach of duty of fair presentation 5.25 –7, 5.29 , 5.35 , 5.43 ; example 5.39 –42; excess insurance 5.51 ; subscription risks 5.48 public authorities: knowledge of insured 4.4 , 4.5 –11 qualifying breach 5.6 ; deliberate or reckless breach 5.7 –12, 5.31 ; neither deliberate nor reckless breach 5.13 –14, 5.32 , 5.35 ; subscription risks 5.48 reasonable search 4.3 , 4.4 , 4.6 , 4.9 , 4.20 –30, 4.32 , 4.34 , 8.8 ; groups of companies 4.28 ; scope of search 4.27 ; timing 4.30 reckless see deliberate or reckless breach records: retention of written 7.19 regulatory oversight 10.6 reinsurance contracts 2.6 , 2.13 , 10.2 ; confidential information 4.19 ; damages for late payment 10.15 –19; date contract entered into 2.8 , 2.9 remedies for breach of fair presentation duty 5.1 –2; affirmation 5.10 , 5.38 ; avoidance see separate entry ; commencement 2.3 , 2.4 ; contracting out of Act: disadvantageous term 8.7 ; damages 5.28 , 5.29 ; deliberate or reckless breach 5.7 –12, 5.31 ; example of operation of 5.39 –42; excess insurance 5.43 , 5.50 –1; inducement 5.3 –5, 5.47 ; MIA 1906 s84 and 5.37 ; neither deliberate nor reckless breach 5.13 –14, 5.32 , 5.35 ; proportionate reduction of claim 5.25 –7, 5.29 , 5.35 , 5.36 , 5.42 , 5.43 , 5.48 , 5.51 ; qualifying breach 5.6 ; subscription risks 5.43 , 5.44 –9; variations and 5.30 –6; varying terms of contract 5.21 –4, 5.41 , 5.47 , 5.51 ; waivers 5.38 Page 179 remedies for fraudulent claims see fraudulent claims representation of expectation or belief 3.22 –2 representation of fact: compared with nondisclosure 3.24 –5; substantially correct 3.18 , 3.21 rescission 11.4 restitutio in integrum 5.10 , 5.15 , 5.19 retention of written records 7.19 retrocession contracts 2.6 , 2.13 retrospective effect: fraudulent claim and right to terminate 9.5 ; varying terms of contract: remedy for breach of fair presentation duty 5.23 –4 rumours 3.39 Scotland 1.19 , 2.14 , 10.1 senior management: definition of 4.5 ; deliberate breach 5.9 ; fraudulent claims 9.12 ; knowledge of 4.5 –9, 4.37 , 5.9 several liability 5.44 social media 4.51 solicitor: premium payment warranty 6.13 ; professional indemnity insurance 6.13 , 9.10 statutory bodies: knowledge of insured 4.4 , 4.5 –11 subscription risks 5.43 , 5.44 –9 Terms of Business Agreements (ToBAs): avoidance and premium 5.18 terms not relevant to actual loss 1.4 , 1.15 –16, 7.19 , 7.23 ; 1980 Law Commission proposals 7.3 –5; 2006/7 Law Commissions’ proposals 7.6 –9; 2012 and 2014 proposals 7.10 –13; 2014 (7 Nov) proposal of Law Commissions 7.14 –16; causation test 7.4 , 7.5 , 7.6 –10, 7.12 –13, 7.16 , 7.26 , 7.28 , 7.30 , 7.31 ; condition precedent 7.19 , 7.23 ; contracting out of Act: disadvantageous term 8.7 ; effect of section 11 7.25 –7; examples 7.28 –32; exclusion clauses 7.20 –2, 7.23 ; historical background 7.2 ; interaction between sections 10 and 11 7.33 ; mischief 7.1 , 7.23 , 7.31 ; not applicable to terms defining risk as a whole 7.17 –19, 7.20 , 7.23 ; parliamentary passage of Insurance Bill 1.21 –3; risk mitigation terms 7.17 , 7.23 –4 third-party beneficiaries: deliberate or reckless breach 5.11 ; fair representation, duty of 3.7 , 3.8 , 3.10 , 9.13 time-specific warranties 6.17 , 6.18 , 6.19 –27; examples of 6.24 –7; risk becomes essentially same as originally contemplated 6.20 , 6.21 , 6.22 –3; risk to which warranty relates 6.20 –1 trade sanctions 10.5 transparency: contracting out of Act 8.1 , 8.2 , 8.6 , 8.7 , 8.9 –23, 8.24 ; examples 8.12 , 8.14 –17; sufficient steps to draw term to insured’s attention 8.9 , 8.10 , 8.11 –17, 8.23 , 8.24 ; term must be clear and unambiguous as to effect 8.9 , 8.10 , 8.18 –23 underwriters: date contract entered into 2.7 , 3.26 ; neither deliberate nor reckless breach 5.13 , 5.14 ; subscription risks 5.43 , 5.44 –9 underwriting at claims stage 1.12 , 1.13 , 3.37 utmost good faith 1.3 , 1.6 , 1.8 , 1.11 , 3.1 ; avoidance 1.12 –14, 1.17 , 2.4 , 3.12 , 5.10 , 9.2 , 9.4 , 11.1 , 11.2 , 11.3 ; commencement 2.1 ; cut-off date 2.3 , 2.4 ; fraudulent claims 1.17 , 9.2 , 9.4 , 11.1 ; insured withholds information 3.36 ; no remedy for insurer’s breach 11.3 –4; remedies for post-contractual breach 11.7 ; tool of interpretation 11.5 –6 variations, contractual 5.30 ; commencement 2.4 , 2.5 ; deliberate or reckless breach 5.31 ; fair representation, duty of 2.4 , 5.30 ; neither deliberate nor reckless breach 5.32 ; proportionate reduction of claim 5.35 , 5.36 ; remedies for breach of fair presentation duty 5.30 –6; termination from date of variation 5.31 varying terms of contract: remedy for breach of fair presentation duty 5.21 –4; example 5.39 –41; excess insurance 5.51 ; subscription risks 5.47 waivers 3.41 , 4.43 , 5.38 , 10.5 ; breach of warranty 6.9 , 6.41 ; confidential information 4.12 ; disclosure putting insurer on notice 3.33 , 3.34 , 3.41 ; fraudulent claims 9.5 , 9.9 ; privileged legal advice 10.9 ; reasonably clear and accessible disclosure 3.31 –2, 3.41 warranties 1.3 , 1.7 , 1.11 , 6.8 –9, 7.1 , 7.23 , 11.7 ; attributable to test 6.11 , 6.12 , 6.13 , 6.14 , 6.15 ; basis clauses 1.15 –16, 6.1 –3; change in circumstances 6.41 ; commencement 2.1 , 2.3 , 2.5 ; condition precedent 6.5 , 6.9 , 6.32 , 6.36 –40; confidentiality 6.28 ; contracting out of Act: disadvantageous term 8.7 ; disclosure and 3.40 ; excuses for breach of 6.41 ; general 6.14 , 6.17 , 6.18 , 6.28 –31, 6.34 ; identification of 6.8 ; implied 6.8 , 6.9 , 6.18 ; interaction between sections 10 and 11 7.33 ; liability after breach remedied Page 180 6.15 , 6.16 ; liability before breach of 6.15 ; mischief 6.5 –7; no liability before breach remedied 6.11 –14; of past or present fact 6.4 , 6.32 –5; play the system 6.21 , 6.30 ; premium payment 6.13 , 6.18 , 6.20 , 6.21 , 7.19 ; remedying breach of general 6.28 –31, 6.34 ; remedying breach of time-sensitive 6.19 –27; suspension, period of 6.10 ; suspensory condition 6.9 , 6.33 ; time-specific 6.17 , 6.18 , 6.19 –27; two types of 6.17 –18; typhoon 6.18 ; varying terms of contract: remedy for breach of fair presentation duty 5.21 , 5.22 ; see also terms not relevant to actual loss