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Insurance Act Notice

The terms of insurance provided by the Club include provisions contracting out of certain sections of the UK Insurance Act 2015 (“the Act”) as amended by the Enterprise Act 2016. The Act entered into force on 12 August 2016 and applies to contracts of insurance concluded after 12 August 2016 that are governed by English Law, as well as to variations to contracts of insurance entered into before that date, where such variations are concluded after 12 August 2016. The Act introduces new default provisions in relation to non-consumer contracts of insurance, affecting in particular three areas: disclosure obligations, warranties and the treatment of fraudulent claims. 

Insurers of non-consumer insurance contracts, which includes the Club, are permitted to contract out of most of the provisions of the Act. Details concerning the sections of the Act which are contracted out of, and the effect of such contracting out, are set out below. The specific policy terms giving effect to the contracting out of the Act are:

P&I Class 1 – see Rule 7;
FD&D Class 2 – see Rule 14 (by way of incorporation of Class 1 Rule 7);
Charterers’ Cover – see Clause 7;
Yacht Liability Terms – see Clause 21;
Yacht Legal Expenses Cover – see Clause 32 (by way of incorporation of Yacht Terms Clause 21).

Provisions of the Act Effect of Contracting Out
Section 10 - Breaches of warranty suspend, rather than discharge, an insurer’s liability.  There is no liability for losses which arise whilst an insured is in breach, but once that breach is remedied, cover is reinstated.
All warranties must be strictly complied with and in the event of breach, the Club’s liability shall be discharged from such date irrespective of whether such breach is subsequently remedied.
Section 11 - Except in relation to those which affect the risk as a whole, breach of a warranty or other term does not discharge the insurer from liability where the insured can prove that the relevant breach would not have increased the risk of the loss which actually occurred. Where policy terms tend to reduce the risk of a loss of a particular kind, or at a particular location or time, and the member/assured fails to comply with those terms, the Club shall be entitled to exercise any rights provided in the policy terms, regardless of whether the member/assured’s non-compliance could not have increased the risk of the loss which actually occurred in the circumstances in which it occurred.
Section 13 - Where an insurance contract confers benefits on third persons who are not parties to the contract, the submission of a fraudulent claim by such a third person does not affect the rights of the other parties to the contract. In the event a fraudulent claim being submitted by an affiliate or associate of a member/assured, the Club shall have the right to terminate the policy in respect of all or any parties insured pursuant to that entry.
Section 13A - Sums due in respect of a claim by the insured against the insurer shall be paid within a reasonable time, failing which the insured may claim damages and interest.  No claim may be brought against the Club for failure to pay sums due in respect of a claim within a reasonable time, save where or to the extent that such failure is deliberate or reckless.
Section 14 – a party to an insurance contract may not avoid the same on the ground of failure on the part of the other to observe utmost good faith.  The member/assured and the Club shall observe the duty of utmost good faith and non-observance by one party shall entitle the other to avoid the policy.