A new development interesting for all insurances written under English Law:
Τhe Insurance Act (2015) comes into force on 12th August 2016. The Act applies to contracts governed by English law entered into after 12th August 2016. The most important changes it will make concern the application of warranties and other terms in policies and the late payment of claims. Both of these reforms favour the Insured.
Currently marine insurance contracts are codified in the Marine Insurance Act 1906; the new Act follows the English Welsh and Scottish Law Commissions’ desire to update the Act. The new Act is generally client-focused but it will take several years before we have sufficient case law to fully understand its implication.
The International Group of P&I Clubs issued a circular that can be found on any IG P&I Club webpage highlighting the key areas of the Insurance Act, namely:
· Duty of Fair Presentation
· Remedies for Breach of Fair Presentation
· Warranties and other terms
· ‘Basis of Contract’ clauses
· Fraudulent claims
· Contracting out
· Application of the Act
The International Group will be exercising insurers’ right to contract out of certain areas of the Act, in light of the sophisticated nature of marine insurance contracts.
The Joint Hull Committee is working on a circular (JH2016/00) too to integrate certain provisions of the Insurance Act within Institute Time Clauses – Hulls. We understand that they will be issuing similar amendments to American Institute Hull Clauses written subject to English Law.
Please contact our office for any further information.