August 12 2016.

The Insurance Act, which affects all new contracts from today onwards, introduces a more policyholder-friendly regime. Billed as good news for business, the Act addresses the imbalance in rights and remedies, previously in favour of insurers, and provides enhanced protection for policyholders who all too often are tripped up by the onerous obligations presently found in commercial policies.

According to Garbhan Shanks, partner and head of insurance and reinsurance at Michelmores, businesses must keep their eye on the ball if they are to benefit.

Shanks says the Insurance Act fundamentally changes the way insurance is underwritten and corporate policyholders need to be fully aware of both its implications and their duties, otherwise they run the risk of not having policies in place which will properly respond to protect their business and employees.

‘A fair criticism of many boards of directors is that they do not tend to engage much with the business’ insurance programmes, unless and until of course something goes wrong and there is a problem with the insurance responding for the company, or indeed themselves,’ Shanks says.

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