Commercial insurance

Download our list of commercial insurance brokers 

Aim of this page

The aim of this page is to set out what is meant by commercial insurance and what you may need to disclose about your criminal conviction when you are purchasing it.

It forms part of our information section on insurance.

Why is this important?

If you are looking to purchase a commercial insurance policy, you will usually be asked to provide details of all the directors of the company. If any director has ‘unspent’ convictions then these would normally have to be disclosed.

Changes to consumer insurance disclosure law came into force in April 2013 but, these changes did not extend to commercial polices which is why this information is important.

What is meant by commercial insurance?

In most cases, it will be obvious. For example, it will normally involve policies that have a significant commercial element to them, including commercial buildings and contents, public liability, commercial motor or insurance taken out by companies.

Ultimately, if in doubt, the best advice is to check with the insurer, because in some cases, it will depend on the individual case. For example:

1. A car used for pleasure and business. It will depend on the balance of the use. Personal use, with occasional business use, is likely to be regarded as ‘consumer insurance’.
2. A van used for both business and pleasure. Again, it will depend on the balance of the use. Business use, with occasional personal use, is likely to be regarded as ‘commercial insurance’
3. Buy to let insurance. An individual letting his own property out (possibly as part of his pension) could be classed as a consumer, whereas a buy-to-let landlord with numerous properties is likely to be a commercial client.
4. Taxi insurance. This is likely to be regarded as a commercial insurance policy.

What do I need to disclose for commercial insurance?

On the 12th August 2016, the Insurance Act 2015 came into force. It applies to all commercial insurance contracts and has been described by the UK government as “the biggest reform to insurance contract law in more than a century”.  Part 2 of the Act creates a new ‘duty of fair presentation’ aimed at encouraging active (as opposed to passive) engagement by insurers, as well as clarifying and specifying known or presumed to be known matters.

Previously, insurance law was underpinned by a principle of utmost good faith. Generally this meant that you needed to volunteer any information that a reasonable insurer may have regarded as a material fact. This included any circumstances that could:

1. Affect the insurer’s willingness to insure a particular risk; and
2. Cause the insurer to charge a higher premium, or alter the terms of the policy.

On this basis, most insurers may have expected that you would disclose an unspent conviction which related to either yourself or other directors.

Under the 2015 Act, you will be required to disclose sufficient information to put an insurer on notice that they may need to make further enquiries about a potential material circumstance. In this context, it could mean that an insurance company would expect you to notify them if you/fellow directors have unspent convictions. It would then be up to the insurer to decide whether to make further enquiries.

We would advise anybody with unspent convictions to ensure that they disclose all unspent convictions of people who are covered by the policy. This is even where there isn’t a specific question about convictions. Ultimately, if the insurer doesn’t believe it is relevant, they will inform you of this, and you should keep a written record of this if you end up purchasing a policy from them, in the event of a dispute later on down the line.

If you are not sure whether a policy is regarded as consumer or commercial insurance, you should err on the side of caution and disclose all unspent convictions, getting some form of written confirmation of your disclosure, which will be helpful in the event of a dispute.

Remember that you don’t need to disclose spent convictions.

Where can I get commercial insurance?

Unlock’s list has details of companies that can provide commercial insurance.

However, it is also likely that, given this is an area of insurance that is less developed for people with convictions (because it is less common), you are also likely find brokers who do not necessarily specialising in helping ‘people with convictions’ who will be able to help you simply because you are looking for commercial insurance.

Discuss this with others

Read and share your experiences on our online forum.

Useful links

Below you will find links to useful websites relating to this page. More specific details (including addresses and telephone numbers) of some of the organisations listed below can be found here.

• Association of British Insurers (ABI)
• British Insurance Brokers Association (BIBA)
• Financial Ombudsman

More information

1. For practical information – More information on insurance and our list of commercial insurance brokers
2. To discuss this issue with others – Read and share your experiences on our online forum – commercial insurance
3. Our policy work – Read about the policy work we are doing on ensuring fair treatment by insurance companies
4. Questions – If you have any questions about this, you can contact our helpline.

Get involved

Help us to add value to this information. You can:

1. Comment on this page (below)
2. Send your feedback directly to us
3. Discuss your views and experiences with others on our online forum