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The Insurance Act 2015 – Warranties and Other Terms


The Insurance Act 2015 comes into force on 12 August 2016, with changes applying to all insurance and reinsurance contracts that incept or are renewed, and to variations of existing policies, on or after this date.  It will affect contracts subject to the laws of England and Wales, Scotland, or Northern Ireland, regardless of where the policy is placed and where the policyholder is situated.

Our new client adviser provides guidance on the changes to the law relating to warranties and other insurance contract terms under the Insurance Act 2015.

Other key changes under the Act include:

  • Insurers will not be able to rely on breach of a warranty or similar “risk mitigation term” to reject a claim, if the breach is not connected to the actual loss that has occurred.
  • Automatic and permanent termination of cover will no longer be the insurer’s sole remedy for breach of warranty; instead, cover will be suspended while the insured is in breach of warranty.
  • “Basis of contract” clauses will be completely abolished and insurers will not be able to contract out of this.

This adviser explains the changes in detail and examines what insureds should be considering in order to take full advantage of the changes.