WHAT DOES ‘FAIR PRESENTATION’ MEAN FOR YOUR BUSINESS? 1. INTRODUCTION This Guide has been produced to help you Buyers of commercial insurance understand Fair Presentation and prepare should be aware of the Insurance for the new requirements. Act 2015 – which affects all business insurance subject to the The key things to remember law of England, Scotland, Wales about Fair Presentation are: or Northern Ireland arranged · All commercial insurance arranged or amended after 12 August 2016. or amended after 12 August 2016 will The change in law updates the legal be affected, so businesses should start framework to be more appropriate for to prepare now. modern business requirements. The It builds on existing underwriting · key new requirement that businesses practices, but is more process focused need to be aware of is the Duty of Fair than the duty of disclosure it replaces. Presentation. It should not mean reinventing · The law is being updated to make the wheel – building on existing it simpler and easier for businesses practices and internal information to get claims paid by insurers and to processes is key to avoid unnecessary assist insurers, brokers and customers business disruption. ensure that insurance contracts are fit for purpose. Successful Fair Presentation is · measured in relation to your specific In essence, businesses get fairer business, not a standardised checklist – outcomes in the event of a claim, but RSA underwriters are available only if they demonstrate an adequate to support you and your broker approach to disclosing information about in mapping this out. their risk to insurers before the insurance is agreed – in the form of the new Duty of Fair Presentation. This Guide summarises the key aspects of Fair Presentation and sets out the areas you should consider to be prepared for August. 1
2. FAIR PRESENTATION IN BRIEF then their knowledge must also Insurers will make further The central requirement of Fair · be included. enquiries if there are obvious Presentation is still to share all omissions, questions or gaps material facts, accurately and in In addition your insurance broker’s · to the information presented. relevant knowledge should also good faith. However the new duty be included. Taken together this means there will be introduces some new concepts: more focus on the information gathering Reasonable search · process not just the facts themselves: Material accuracy and good faith · Sufficient enquiries to build · The core requirements from you · a picture of your risk must also be essentially remain unchanged – conducted and material information you need to take reasonable steps arising must be included. This may to ensure information provided include enquiries made of external FAIR PRESENTATION: HOW IT FITS TOGETHER when seeking insurance is accurate parties such as managing agents, and complete to the best accountants, solicitors or your of your knowledge. insurance broker. Insurance and risk Information Business knowledge Senior Management The Act also specifies examples · team and/or Broking revealed by a which MUST knowledge Clear and accessible presentation · team knowledge reasonable search be included of important details to include, such as special or unusual details The presentation of information · of the business or existing areas should include adequate signposting of concern relating to the types and flag important points to insurers. of risk covered by the insurance. Data dumping is prohibited. Nature of the · Clear and accessible disclosure of material risk information presentation Whose knowledge to include · Insurer duties · The relevant knowledge of senior · Information that an insurer should · management – defined as the key know does not need to be included individuals who decide how the in the presentation, but check Information an business is run. Insurer information Insurer knowledge underwriter dealing with them before omitting any Common accessible to the NOT required with that type of knowledge If the risk and insurance team · risk information. underwriter to be included business is expected (or individual buying the insurance) to know is separate to senior management 2
3. BE PREPARED: RSA’S KEY EXPECTATIONS Each Fair Presentation will be unique and 3. Flag changes and differences 4. Well-structured information specific to a business – what’s reasonable In addition to answering our questions, The presentation should include clear · · for one business may not be reasonable you must flag ‘special or unusual facts’ structuring and signposting of key for another. However RSA’s expectations about the risk. information. for customers are guided by the same These will be unique to your business For larger more complex businesses, principles. These are the key areas · · but could for example include: with extensive information sets, you should consider: an executive summary and detailed Operational factors which make · 1. Audit trail of how risk information contents page would be expected. your business different from is put together competitors or industry standards. 5. Ongoing notification of changes Principal requirement is for you to have · Recent or planned business · an audit trail of how the information Having an ongoing process in place · developments such as new products was gathered. to monitor and flag fundamental and services, acquisitions, customers changes to your risk during the period To demonstrate compliance with · or contracts, which will affect your of the policy is important, as this could the Act you will need to be able risk profile. change your insurance needs. to summarise and document: Known issues where you already · 6. Additional enquiries Who is consulted. · have a concern about the potential for increased risk in future. It is critical to consider the range · What information is asked for. · of people you need to consult within Changes in business operations, · How information is collated · the business. This will naturally which might not be fully explained and checked. be specific to your business but in the standard underwriting could include: 2. Accurate and complete information information such as business units Who counts as ‘senior management’ with different working practices. · The core information we ask for as · may differ by type of risk but as well part of proposal forms or insurance For all changes it is important to · as directors it is likely to include line submissions (such as claims describe the circumstances and what management and those who control information or asset value) will you think the risk impact could be. policies affecting risk or with specific continue to lie at the core of a Fair risk management responsibilities. Presentation and should be completed as accurately and fully as possible. 3
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