4.1 Introduction

When the Insurance Act 2015 comes into force on 12 August 2016 for contracts concluded after that date,2 it will affect warranties and similar clauses in insurance policies. In particular, the Act banishes “basis” clauses.3 Although basis clauses were well established in the courts as being what the parties intended, it was difficult to square them with the notion underlying the parol evidence rule, that a document such as an insurance policy which looks like the whole of the contract should be treated as the whole of the contract and as being therefore exclusive of matters not recorded in the policy. It was also difficult to square them with the expectations of reasonable insurance applicants; hence, as far back as 1942 basis clauses were described as “traps” for the unwary.4