Fenchurch Law
4 Experts
6 Contributions by Fenchurch Law Experts
PRACTICE NOTES
The Building Safety Act 2022 (BSA 2022) marks the most significant shake-up of building controls in forty years, reshaping oversight for the design, construction and management of, among others, residential properties and, in particular, ‘higher-risk’ buildings (HRBs) (for what qualifies as a HRB, see Practice Note: Building Safety Act 2022—what is a higher-risk building?).
Stricter requirements on competence and safety reporting, coupled with new causes of action and court orders to expedite remediation of historical defects, carry notable insurance consequences. The anticipated uptick in claims against construction and real estate professionals will trigger more policy notifications and potential coverage disputes, as the market calibrates to novel exposures amid developing case law.
This Practice Note therefore examines key insurance issues likely to arise from BSA 2022 in relation to enhanced duties, extended liabilities, new remedies and policy
Insurance & Reinsurance
PRACTICE NOTES
This Practice Note reviews the authorities on the meaning of ‘fraud’ and sets out the core principles applicable to business insureds, both when arranging insurance at inception and throughout the claims process. What amounts to fraud, and how is it established?
Fraud
There is no rigid definition of fraud in the insurance sphere. A leading statement of the test for deceit appears in Lord Herschell’s speech in Derry v Peek: first, an action for deceit requires proof of fraud; nothing less will do. Secondly, fraud is made out where a false representation is shown to have been made (i) knowingly, (ii) without any belief in its truth, or (iii) recklessly, being indifferent as to whether it is true or false. Although the second and third limbs are often described separately, the third is really an example of the second, because a person who makes a
Insurance & Reinsurance
PRACTICE NOTES
Insurance contracts have long seemed enigmatic to law students and practising lawyers. The reason is that they are contracts of the utmost good faith. They are unlike ordinary agreements: they must be treated with exceptional care. The central element of the obligation of utmost good faith, as articulated in the Marine Insurance Act 1906 (MIA 1906), is the policyholder’s duty to volunteer information to the insurer that would ‘influence the judgment of a prudent insurer’ when deciding whether to accept the risk and what to charge for it (see: MIA 1906, s 18). This has always been a demanding requirement. In truth, it has long been a tall order. It expects the policyholder to second‑guess the insurer’s thinking and make disclosure on that basis. The insurer, by contrast, was free to sit back and remain passive, under no obligation to offer the
Insurance & Reinsurance
PRACTICE NOTES
Consumer insurance and commercial insurance for businesses
This Practice Note sets out an overview of several widely used insurance types, who may require them, and how they operate. Broadly, insurance falls into two groupings:
cover for consumers
cover for businesses
For individuals purchasing as consumers, the governing statute is the Consumer Insurance (Disclosure and Representations) Act 2012 (CI(DR)A 2012). CI(DR)A 2012 describes a consumer as an ‘individual who enters into the contract wholly or mainly for purposes unrelated to that individual’s business trade or profession’. The Act addresses what a consumer is obliged to tell the insurer before making, or changing, an insurance contract. See Practice Note: A guide to the Consumer Insurance (Disclosure and Representations) Act 2012 for additional detail.
For business policyholders, the applicable legislation is the Insurance Act 2015 (IA 2015). IA 2015 signifies a paradigm shift away from what had been seen as an
Insurance & Reinsurance
PRACTICE NOTES
This Practice Note outlines the key principles on reinstatement in property insurance.
What is reinstatement?
Reinstatement means repairing or replacing property so that it is restored to its pre-loss condition, or to a state that is materially equivalent. The drafting of reinstatement clauses differs from policy to policy and can lead to markedly different outcomes for the policyholder. Depending on the exact wording, the policyholder may or may not receive a cash settlement, may or may not be obliged to rebuild, and may or may not have to rebuild on the same site. Many policies also give the insurer the option to reinstate.
Who does it?
Typically, the policyholder undertakes the reinstatement. However, numerous policies allow the insurer, at its election, to carry out the reinstatement.
Why might an insurer choose to do so?
Insurers may have several reasons for electing to reinstate themselves rather than allowing the
Insurance & Reinsurance
PRACTICE NOTES
This Practice Note offers an in-depth examination of underinsurance, its principal causes, the remedies available to insurers when policyholders underinsure, and recent case law concerning brokers’ duties.
Introduction
Underinsurance remains one of the most entrenched problems in UK property and business interruption (BI) insurance. A majority of policyholders arrange cover for less than the full value of their assets and, as a result, risk significant shortfalls if they need to claim. Despite how common it is, reported decisions on underinsurance are scarce. Much of the applicable law stems from the Insurance Act 2015 (IA 2015), the Consumer Insurance (Disclosure and Representations) Act 2012 (CI(DR)A 2012), and older authorities on materiality and disclosure. For more on IA 2015, see Practice Note: Insurance Act 2015 (IA 2015)—essentials, and for CI(DR)A 2012, see Practice Note: A guide to the Consumer Insurance (Disclosure and
Insurance & Reinsurance
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