Why Should The Decision Maker Purchase A Care Home Insurance Policy?

Care Home Insurance & The 'Decision Maker'.

At Higos, we understand when it comes to buying care home insurance the process can be overwhelming. Nonetheless it’s important to remember to obtain an accurate insurance quotation, the ‘decision maker’ will be considered most likely to have a significant understanding of their own needs. Without the ‘decision maker’ providing the correct information, cover can be misrepresented and could potentially void or reduce a care home insurance claims pay out and increase the risk of a Directors & Officers claim. 

What Is A ‘Decision Maker’?

The 'decision maker' would typically have insurable interest and would be responsible for the accuracy and completeness of all the information provided to their insurer. The 'decision maker' could be a consumer, a trade, business professional, individual or a group of individuals who are typically responsible for making important decisions.

What Is A 'Fair Presentation Of Risk' For Care Home Insurance?

Before a care home insurance policy can be taken out, the 'decision maker' has a duty to give a ‘fair presentation of risk’ to their insurer. This means under the Insurance Act 2015 they must act with utmost good faith and disclose all material facts that the 'decision maker' would know or be obliged to know to their insurer. Reasonable searches must also be conducted to ascertain all material facts within your organisation, making enquiries of senior management and other relevant individuals where necessary.

A material fact or circumstance is important information that is considered vital if it would influence an insurer’s judgment in determining whether to accept the risk, or the terms of the insurance (including premium). If you are in any doubt whether a circumstance is material, we recommend that it should be disclosed. These can include previous claims, security, criminal convictions, bankruptcy and insolvency. So whether you’re changing, renewing or purchasing a new policy, the ‘decision maker’ could be considered as the most suitable in providing a ‘fair presentation of risk’. It's important to remember any changes to material facts or material circumstances throughout the term of an insurance policy must be advised to an insurer. Check your policy wording for any endorsements or additional terms and conditions.

What Happens If A 'Decision Maker' Fails To Make A 'Fair Presentation Of Risk'?

If the ‘decision maker’ fails to make a ‘fair presentation of risk’ by not disclosing all material facts and circumstances for their care home insurance policy, the following could happen:

  • Failure to disclose a material circumstance may entitle an insurer to impose different terms on your cover.
  • They may proportionately reduce the amount of any claim payable. 
  • In some circumstances an insurer will be entitled to void the policy from inception
  • If in the event a policy is void from inception any claims under the policy would not be paid.
  • The insurer may retain the insurance premium, depending on the circumstances as to whether the decision maker were aware of any potential material facts.
  • The insurer may increase the insurance premium and increase any excess.
  • Directors & Officers claims may increase if a Director & Officer fails to disclose material facts they could be held liable for a breach of a their duties as a company owner and could face fines and criminal offenses.

What Is The Insurance Act 2015?

On the 12th August 2016 the Insurance Act 2015 came into effect as legislation and is designed to make insurance clearer and fairer for the relationship with an insurer and rules regarding when an insurer is allowed to reject a claim.

Bespoke Care Home Insurance

At Higos, we love different. It’s what makes our insurance world go around. So, while other insurers may try to sell you a one size fits all solution - or even turn you away - our friendly experts will take the time to understand your situation and find a solution that’s tailored to your needs. So, you can be sure you’re fully protected and not paying for care home insurance cover you don’t need.

If the unexpected should happen, we have a friendly in-house claims team ready to provide a prompt and personal service.

If you’re interested in speaking to a chartered insurance broker for advice or a quotation for care home insurance get in contact with us at Higos. Alternatively fill out our online request a call-back form and a member from our specialist care home insurance team will call you back.

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For independent advice or an insurance quotation