An insurance policy is a legal contract between the Insured and the Insurer. The Insured provides information in response to the Insurer's questions, which the Insurer takes into account before deciding to offer or to decline to offer a policy, or to limit it in some way.

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If the Insured fails to provide truthful, or incomplete information, or fails to tell the Insurer some detail(s) that would be considered relevant to the Insurer, the Insurer could reduce or refuse to pay a claim, cancel the policy, reduce the cover to what it would have accepted if it had known the correct facts, and if fraud is involved, treat the policy as if it had never existed.

 

It is therefore very important to make sure that the Insurer and your broker is aware of the Insured's details. It is better to mention anything that could be considered relevant, even if the specific question may not have been asked. e.g. if you were requesting insurance cover for a beef cattle property, you would be expected to mention that you also sometimes hired out your horses for the public to ride around the property. It is also the Insured's responsibility to keep the Insurer and your broker informed of any changes to their circumstances, and/or to make additions or deletions to the policy as soon as the Insured is aware of them.

 

Who, or what entity, is the Insured is an important issue. The Insured name normally is the same as the insured item's owner's name, unless there is a legal requirement that they have to insure another party's property, such as leased equipment or vehicles.

 

Example 1: If Bob and Mary Smith bought a property or a vehicle in their Company name, B & M Smith Enterprises Pty Ltd, it has to be insured under the Company name.

 

Example 2: If Bob and Mary lived in Queensland, and owned a home unit, they may well be able to take out a policy on their unit for building and contents damage, but they would not be paid for a claim for water damage to the ceiling, because the building is owned by the Body Corporate or the Strata Title Plan, which must have it's own policy on the property. Bob and Mary would, however, be able to claim for damage to their lounge suite – because they own it. Note: other States or Territories may have different rules to Queensland regarding Strata Title insurance.

 

Example 3: If Bob and Mary operate their Company business from the study in their home unit, would the theft of their Company owned laptop be able to be claimed on their personal contents policy? If you answered “No” you are correct. The Company should have its own business policy for the equipment, which usually would also include Public Liability cover. If they had Public Liability cover and a business client came to their home, or they called into a client's office, and accidently injure someone, the business policy would then respond to the liability claim. The Legal Liability cover which is included in most Home & Contents policies excludes any business related claims.