Misrepresentation, Non-Disclosure and Breach ... - Law Commission

(e) when the insurance relates to goods in international transit, including
transportation to and from the Norwegian Continental Shelf. 51
5.174 Using this sort of definition would ensure that foreign businesses and those
taking out marine and aviation insurance would still be required to volunteer
information. For domestic risks, the definition considers employees, turnover and
assets. However, the test is complex and brings back issues of how to define
MAT, which we had hoped to avoid.
5.175 The third approach would be not to have special rules protecting small
businesses, on the ground that they will be adequately protected by our
proposals, including the “reasonable insured” test and controls on the use of
standard terms. Where a small business contracted on the insurer’s written
standard terms, the insurer could not use a policy term to give itself greater rights
than the default position would allow, unless it was what the insured reasonably
expected. In Part 8 we provisionally propose to extend similar protections to
warranties, exceptions and definitions of the risk. 52
5.176 We think this is largely consistent with the approach we took in our report on
Unfair Terms in Contracts. We did not recommend that small businesses should
be treated in the same way as consumers in every respect, only that they should
have the right to challenge “non-core” terms in contracts that were not individually
negotiated. Our provisional conclusion is that small businesses would be
adequately protected by the “reasonable insured” test we have proposed,
coupled with the controls on standard term contracts. However, we welcome
views.
5.177 We would welcome views on whether there is a case for greater protections
for smaller businesses.
51 Norwegian Insurance Law Act 1989, ss 1 to 3.
52 See paras 8.54 to 8.80 below.
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