b) Make the disclosure in clause (1)(a) above in a reasonably clear and accessible way; and


c) Ensure that every material representation of fact is substantially correct, and that every material representation of expectation or belief is made in good faith.


2. For the purposes of clause (1)(a) above, the Insured is expected to know the following:


a) If an Insured is an individual, what is known to the individual and anybody who is responsible for arranging his or her insurance(s).


b) If an Insured is not an individual, what is known to anybody who is part of the


Insured’s senior management; or anybody who is responsible for arranging the Insured’s insurance.


c) Whether an Insured is an individual or not, what should reasonably have been revealed by a reasonable search of information available to the Insured. The information may be held within the Insured’s organisation, or by any third party (including but not limited to the broker, subsidiaries, affiliates or any other person who will be covered under the insurance). If an Insured is insuring subsidiaries, affiliates or other parties, the Insurer expects that the Insured will have included them in its enquiries, and that the Insured will inform the Insurer if it has not done so. The reasonable search may be conducted by making enquiries or by any other means.


So what are you expected to know and provide


Since the basis clause was abolished insurers are relying more on condition precedent clauses to require insured’s that certain matters listed are true and accurate at the time of inception of an insurance contract; this provides a contractual promise that a particular matter is true.


If


this is breached it may entitle an insurer to reject a claim regardless of whether prejudice is suffered by them, or may mean that cover never attached.


Prior to the Act a breach of warranty discharged insurer’s liability under a policy entirely. The introduction of the Act improved the position for insured’s as it makes warranties “suspensive conditions”. This means that an insurer’s liability is suspended only while the insured remains in breach of a warranty.


Insurers Remedies for breach of the duty of fair presentation


1. If, prior to entering into this insurance contract an Insured breaches their duty of fair presentation the remedies available to Insurers are as follows:


a) If an Insured’s breach of the duty of fair presentation is deliberate or reckless:


i) The Insurer may avoid the contract, and refuse to pay all claims; and,


ii) The Insurer need not return any of the premiums paid.


b) If an Insured’s breach of the duty of fair presentation is not deliberate or reckless, the Insurer’s remedy shall depend upon what the Insurer would have done if the Insured had complied with the duty of fair presentation:


The Report • September 2018 • Issue 85 | 73


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