Contract certainty - our commitment
This page contains full policy wordings for our policies and details our commitment to Contract Certainty.
What is Contract Certainty?
The Association of British Insurers, or ABI, in conjunction with other trade bodies, has agreed a ‘Contract Certainty Code of Good Practice’, which outlines the standards which the insurance industry must achieve. The Code states that Contract Certainty is achieved by the complete and final agreement of all terms between you as the insured party and us as the insurers, before inception of cover. It also provides a series of principles designed to achieve Contract Certainty and outlines the requirements when producing and issuing contracts. The code applies to all General Insurance contracts incepted or renewed on or after October 2005, but insurers are not expected to be fully compliant until December 2006.
How has Contract Certainty originated?
Following the terrorist attacks on September 11 2001, there was a substantial legal battle between the leaseholder of the World Trade Center and his insurers. The leaseholder had not received full policy wordings at the time of the attacks. A legal dispute began based on whether the attacks comprised two separate incidents or one. The leaseholder argued that as the attacks on the towers were over 40 minutes apart they were two separate incidents. The incident being classified as two attacks would mean a settlement of £3.5 billion for each attack for the leaseholder.
After the lengthy and well-publicised legal battle, it was ruled that the policy wording provided by one group of insurers was such that the attack was considered as two incidents. The terms of the policies from other insurers and re-insurers were such that it was considered as one incident.
This legal battle initiated the demand for Contract Certainty by both the Regulator and the insurance industry itself.
What are the benefits of Contract Certainty?
There is no doubt that Contract Certainty will bring considerable benefit for both you as a customer and us as insurers, for example:
Achieving Contract Certainty is fundamental to the Financial Service Authority’s objectives surrounding protecting you as customers and ensuring you have confidence in the market.
Contract Certainty minimises the operational and legal risks for us as insurers and the unacceptable doubt for you as customers posed by current market practices.
Contract Certainty will bring the insurance market’s contractual standards in line with other financial markets governed by the FSA.
Contract Certainty will improve the submissions you, as customers, make to us. Your role in terms of the clarity with which you set down your policy requirements and risk information is fundamental to us ensuring the products and services we offer you comply with Contract Certainty.
Contract Certainty will increase efficiency and as a result you should receive improved customer service.
What is Zurich doing to ensure Contract Certainty compliance?
We have developed effective workflow processes to meet the demands of Contract Certainty and our policy wordings are available on our website. See below for PDFs of the policy wording for your policy.
What do we need from you, our customers?
The Code states that Contract Certainty is achieved by the complete and final agreement of all terms between the insured and the insurer before inception of cover.
It is therefore imperative you return the completed Renewal Declaration and provide risk information to your Underwriter at the earliest possible opportunity and without delay.
Should you wish to discuss any aspects of Contract Certainty please contact your Risk & Insurance Consultant or email info@zurichmunicipal.com
