LAYTONS LLP
Insuring Against Risk
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Insuring Against Risk | Reducing Legal Risk
Insuring Against Risk Businesses expose themselves to risks every day, making it essential to have the right insurance in place. One legal claim or catastrophic event could be enough to wipe out a small business or make a serious dent in a larger one. Fortunately, businesses have access to a wide range of insurance products to protect them, and it is imperative you consider the risks relevant to your business and ensure your business is insured accordingly.
Nicola Khan Solicitor nicola.khan@laytons.com +44 (0)20 7842 8000
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Insuring Against Risk | Reducing Legal Risk
"Traditional" forms of insurance Some “traditional” areas of insurance for businesses include:
•
Directors & Officers (“D & O”) Liability Insurance
provides cover for directors and officers of a company •
Professional Liability (or Indemnity) Insurance
against losses suffered as a result of a legal action
helps protect professional advice and service providing
brought for alleged wrongful acts in their capacity as
businesses from bearing the full cost of a negligence
directors or officers.
claim brought against them by a client. Such insurance is often industry specific which would be addressed in a
There are many other areas of insurance that a business can
customised policy.
and should have in place, and it is important to discuss with your insurance broker what forms of insurance are advised for
•
Public Liability Insurance
your particular type of business and needs.
protects you if your clients or members of the public suffer personal injury or property damage as a result of
•
your business.
"New" forms of insurance
Employers' Liability Insurance
As well as these more “traditional” forms of insurance, it is
protects you against the cost of compensation claims
increasingly important for businesses to consider new issues
arising from employee illness or injury, sustained as a
and areas of risk coming to light that may not typically have
result of their work for you. This is a legal requirement
been thought about, for example:
as soon as you become an employer and your policy must cover you for at least £5 million and come from
•
an authorised insurer.
Cyber and Data Risks Insurance
is designed to support and protect your business if it experiences a data breach or is the subject of an attack
•
Product Liability Insurance
by a malicious hacker that affects its computer systems.
protects against claims for personal injury or property damage caused by a product your business designed, sold or supplied.
•
IT System Failure Insurance
which is becoming all the more relevant with the rise of the “internet of things” and the reliance on third-
•
Property Insurance
party cloud providers, which means a host of devices
can protect against most risks to property including
connected to the internet are now exposed to new
equipment, signage and contents in the event of a fire,
types of risk.
storm or theft, irrespective of whether your business owns or leases its space.
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Insuring Against Risk | Reducing Legal Risk
Introduction of the Insurance Act 2015 There have been significant changes in UK commercial insurance law. The introduction of The Insurance Act 2015 represents the most significant reform of insurance contract law in the UK for over 100 years. The Act came into force on 12 August 2016 and applies to all contracts of insurance and reinsurance issued or varied after that date.
•
Breach of warranties will no longer permanently discharge the insurer’s liability
Previously the insurer could avoid paying a claim if any statement on the proposal form was inaccurate, even if immaterial or minor. Under the new Act, if the breach is remedied prior to loss, cover will remain in place, and breach of a warranty unconnected with the loss is no longer grounds for terminating cover. •
The Act allows insurers to contract out of the new law and introduce less favourable terms to the insured
The key changes include:
They must however meet certain requirements, including taking sufficient steps to draw the
•
The previous pre-contract duty of disclosure has
disadvantageous term to the insured’s attention before
been replaced by a new duty of fair presentation
the policy is entered into.
The Act aims to encourage co-operation between the insured and the insurers at the pre-contract stage, and does this by introducing a new obligation on the insured to make a fair presentation of a risk to
•
An insured will be able to claim damages for late payment of a valid claim
An insurer will be required to pay sums due within a
its insurer. This includes disclosure of every material
“reasonable time”, although what this is will depend on
circumstance which the insured knows or ought to
the specific circumstances and remains to be seen.
know, much like the traditional duty of disclosure. While the new Act goes some way to redress the imbalance If the insured is in breach of the duty of fair
under the old law between the interests of the insured and
presentation deliberately or recklessly, the insurer can
insurers, businesses need to be aware of the specific risks
avoid (i.e. rescind) the policy and keep all premium(s)
to their business and work with their broker to find the
paid. If the breach is not deliberate or reckless, the
appropriate insurance products for their needs, based on
insurer has a number of other remedies including
accurate disclosure of all material facts and circumstances.
applying different terms, charging a higher premium and reducing the claim proportionately, if they can show that this is what they would have done if they had known about the relevant circumstances and risk from the outset.
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Insuring Against Risk | Reducing Legal Risk
Disputes
Avoidance, Management & Resolution Our specialist team is experienced in avoiding, managing and resolving claims and disputes in a variety of contexts. Our work involves the identification of legal problems and solving them by effective advice and negotiation. Where necessary we use litigation in a variety of courts and tribunals.
Our Team John Abbott
Simon Foster
Rebekah Parker
Partner john.abbott@laytons.com +44 (0)20 7842 8000
Partner simon.foster@laytons.com +44 (0)20 7842 8000
Associate Partner rebekah.parker@laytons.com +44 (0)20 7842 8000
Luke Arnold
Richard Harrison
Nigel Parnell
Solicitor luke.arnold@laytons.com +44 (0)20 7842 8000
Partner richard.harrison@laytons.com +44 (0)20 7842 8000
Director of Trade Marks nigel.parnell@laytons.com +44 (0)20 7842 8000
Russell Beard
Paddy Kelly
Will Slater
Partner russell.beard@laytons.com +44 (0)20 7842 8000
Partner paddy.kelly@laytons.com +44 (0)20 7842 8000
Consultant will.slater@laytons.com +44 (0)20 7842 8000
Robert Clark
Nicola Khan
Geraint Thomas
Partner robert.clark@laytons.com +44 (0)20 7842 8000
Solicitor nicola.khan@laytons.com +44 (0)20 7842 8000
Partner geraint.thomas@laytons.com +44 (0)20 7842 8000
Sven Clarke
Ciara McCroary
Ben Thorogood
Associate Partner sven.clarke@laytons.com +44 (0)20 7842 8000
Trainee Solicitor ciara.mccroary@laytons.com +44 (0)20 7842 8000
Solicitor ben.thorogood@laytons.com +44 (0)20 7842 8000
Miriam Giorgioni
Bunmi Oduntan
Pooja Verma
Registered European Lawyer miriam.giorgioni@laytons.com +44 (0)20 7842 8000
Trainee Solicitor bunmi.oduntan@laytons.com +44 (0)20 7842 8000
Trainee Solicitor pooja.verma@laytons.com +44 (0)20 7842 8000
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This information is offered on the basis that it is a general guide only and not a substitute for legal advice. We cannot accept any responsibility for any liabilities of any kind incurred in reliance on this information.
LAYTONS
LLP
London
Manchester
Guildford
2 More London Riverside London SE1 2AP +44 (0)20 7842 8000 london@laytons.com
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Ranger House, Walnut Tree Close Guildford GU1 4UL +44 (0)1483 407 000 guildford@laytons.com
www.laytons.com
Š Laytons LLP which is authorised and regulated by the Solicitors Regulation Authority (SRA Nº 566807). A list of members is available for inspection at the above offices.