Laytons LLP | Insuring Against Risk

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

22 St. John Street Manchester M3 4EB +44 (0)161 214 1600 manchester@laytons.com

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.