Need to Know: Behavioural Conditions
Published: 05/10/2021 Author: Bob Hannah 1min read
‘Warranties’, ‘Conditions Precedent’ and Policy Conditions
An insurance policy raises expectations of a certain future – but it’s a highly conditional
The devil is in the detail of the policy conditions. Some of these conditions have historical names like ‘Warranties’ or ‘Conditions Precedent to Liability’, but what differentiates them from more routine Policy Conditions is making the cover conditional
upon a behavioural input from the policyholder.
It is your own behaviour that will determine if that future is available to be claimed.
These conditions cover everything from the removal of waste from the premises, to the cleaning of kitchens, to the height and depth worked on construction sites, the setting of security systems, money transit security and much more.
Their importance cannot be overstated.
“It is a Condition Precedent to Liability that all trade waste is swept up and removed from the premises daily before the close of business. If you fail to comply with this condition any claim or loss or damage associated with such failure shall not be paid.”
Self-evidently this means that any breach of this condition that had an impact on a
claim would allow the insurers to avoid said claim, but not the policy as a whole.
On the night of the burglary, the thieves decide to set the rubbish on fire which is piled up inside the building near the rear exit door. Plainly, the breach of the waste policy condition will doubtless result in the insurer not paying your claim.
On the night of the burglary, the thieves break in through the front door, steal laptops and stock, ignoring the rubbish piled up against the rear door. As the breach of the waste policy condition had no impact upon the theft, the insurers will have to deal with your claim.
On the night of the burglary the thieves steal laptops, stock and set the building on fire. As the rubbish is in the locked bin outside, the insurers will pay your claim – unless, of course, you forget to set the alarm.
In every case, compliance with the policy conditions makes life simple.