Policy documentation, endorsements and the contract of insurance
Policy documentation, endorsements and the contract of insurance
This domain tests how the contract evidenced on the slip is documented, how policies are structured, and how endorsements change cover without creating disputes.
Policy structure
A London policy typically contains a schedule (insured, period, limits, premium, subscription), operative clause, definitions, exclusions, conditions (including claims notification, warranties, cancellation, law and jurisdiction) and endorsements. Where documents conflict, a precedence clause determines which prevails - usually the schedule, then endorsements, then the main wording, but always read the clause itself.
Endorsements
Endorsements amend cover, are individually numbered, dated and subscribed by all affected insurers, and should state their effective date expressly. Market reform wording is used where available, with manuscript wordings requiring particular care and full agreement. Contract certainty requires the final wording to be agreed at or before binding, with policy issuance within market timelines.
The contract rules behind the document
The Insurance Act 2015 governs commercial presentation and remedies (avoidance for deliberate or reckless breach; proportionate remedy otherwise); the Consumer Insurance (Disclosure and Representations) Act 2012 governs consumer disclosure. The policy documents, but does not create, the contract.
Worked example. An endorsement adds a new warehouse from 1 March but is signed in May. Loss occurs in April. The endorsement states an effective date of 1 March and is signed by all subscribers, so cover applies. Had it said "effective on signing", the April loss would fall outside - the date, not the signature, governs.
Traps. Confusing signature date with effective date. Assuming an endorsement binds all subscribers when not all signed. Overlooking precedence clauses where an endorsement contradicts the wording. Treating the late policy as the contract when the slip governs. Using consumer disclosure rules for a commercial risk.
Key points
- The slip is the contract; the policy is its documented form.
- Endorsements must be numbered, dated, effective-dated and fully subscribed.
- Precedence clauses resolve conflicts between schedule, endorsements and wording.
- Insurance Act 2015 governs commercial remedies; CIDRA 2012 governs consumers.
- Contract certainty requires agreed wording at or before binding.