Insurance Policy Warranties and Conditions – A thing of the past?

There has been a lot said about the new Insurance Act which came into force this year. It is the biggest change to insurance law for over 100 years after all.

Business insurance policies traditionally contain Conditions Precedent to Liability (Conditions) and/or Warranties.

Some examples:

  • Waste Condition/Warranty – will require you to remove and store waste in a certain manner
  • Portable Heather Condition/Warranty – will ban the use of these items in certain parts or all of your premises
  • Alarm Condition/Warranty – will require you to maintain your system and ensure it is activated when the premises are unattended

The new Act includes some changes to the way warranties operate which provides a fairer position for policyholders – but we shouldn’t get too excited – it’s important to remember that warranties and conditions will still remain in the majority of policies – they are unlikely to disappear altogether – and they can still cause big problems.

Why is compliance with these terms so important? Quite simply, if you fail to comply with a policy condition or warranty and need to make a claim, you can still be rejected. If the claim is big it could mean the end of your business.

What is the solution?

We recommend:

  • Speak to Malago about Condition and Warranty free policies
  • Employ a good insurance broker (we are good) – a diligent broker will
    • Negotiate a policy with as few conditions as possible (we do this)
    • Make sure you understand the clauses and check that you can comply (we’ll help with this)
  • Make sure your management team are aware of the requirements and have procedures in place to ensure you always comply (we can help with this)
  • Have a good read of your policy documentation (make sure you read the policy booklet too)


Need help? Give Malago a call 01934 788807