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Art. 11 · What the policy says · 3 min read

The clauses that decide whether a claim gets paid

Buried in the conditions are a handful of promises you made about how the business would be run. They are not suggestions.

Your policy contains sentences like: the intruder alarm shall be set whenever the premises are left unattended; fire doors shall be kept closed; the fixed electrical installation shall be inspected every five years; waste shall be removed from the building at the end of each working day.

These are conditions, and some of them are conditions precedent to liability, meaning that if you haven't complied, the insurer's obligation to pay may not arise at all.

Condition precedent A term where compliance is a prerequisite for cover, not merely a request. Breaching one has consequences out of all proportion to the effort of complying, which is what makes it worth finding them before a claim, not after.

UK law has softened this considerably for business insurance. Under the Insurance Act 2015, breaching a term that is designed to reduce a particular kind of risk cannot be used to decline a claim of a completely different kind. A lapsed electrical inspection is not a defence against a burglary. And a breach that has been remedied suspends cover during the breach rather than voiding the policy outright. This is a real protection and worth knowing you have.

What it does not do is remove the practical burden. If your alarm condition was breached and the loss was a burglary, you are squarely in scope. And in every case, the person who has to demonstrate what was done, and when, is you.

A CLAIM HAS TO PASS EVERY GATE Covered peril? Above the excess? Conditions complied? Sum insured adequate? PAID IN FULL excluded nothing paid you pay it yourself may be declined reduced by average Most disputes happen at gate three, and most of gate three is record-keeping.
Fig. 12 · Cover is not one decision but a sequence of them. Three of the four gates are things you can influence long before a loss; the first is settled when you buy the policy.

Use it

  • Extract every condition into one page. Ask your broker to list the conditions precedent specifically. It is a reasonable request and takes them ten minutes.
  • Give each one an owner and a record. A dated log, a photo, a signed checklist. The condition is easy; proving you met it two years ago is the hard part.
  • Challenge conditions you cannot actually meet. A condition you know will be breached is worse than a higher premium. Say so at renewal and get it changed.

Want this run against your own numbers?

We put ranges, not single figures, against the risks your business actually carries.

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Explanatory content only. This article describes how insurance and risk decisions work in general terms; it is not insurance, legal, actuarial, or investment advice, and it is not a recommendation to buy, keep or cancel any cover. Every figure and diagram is illustrative, chosen to make a mechanism visible, not to describe any particular business.