When it comes to insurance, whether it is for your business or yourself, the devil is in the details. Everytime an insurance product is started, regardless of the type of insurance being taken out, the policy holder has a responsibility to advise the insurance company of all the facts.
There are two main examples of this exact situation.
Firstly, with Life, Trauma or Income Protection when you apply for cover you are asked a series of questions relating to your medical health and history. Your responses to these questions are used by the insurer to determine your suitability for cover. Should you fail to advise the insurer of something that you knew about or should reasonably have know about and you later make a claim relating to this, the insurer may reduce the payment to you, refuse to pay a claim or even cancel the contract outright.
When this occurs, not only will you have no insurance cover but it will also be difficult to obtain cover with another company.
The second example of how this can affect you is with your business insurance. Say, for example you are running a business which involves the transportation of stock and tools from a warehouse to the client’s property for installation. You have purchased a new vehicle for this specific purpose and had the vehicle modified by adding shelving inside and a hydraulic loading ramp to the rear of the vehicle.
You arrange insurance for damage or theft of the vehicle, stock or tools but fail to notify the insurance company of the modifications to the vehicle. If this vehicle is stolen or severely damaged in an accident you will not be covered for the accessories as the insurance company is not aware of them. Had the insurer been notified they would have been able to assess the risk and determine if they wish to insure the whole vehicle.
As you can see it is vital to ensure that all the information is given to the insurance company when the policy is first taken out. If this doesn’t occur and you need to make a claim later you may find yourself out of pocket.
