Insurance Contract Law: Micro-businesses

Open date: 01 April 2009

Should micro-businesses be treated like consumers for the purposes of pre-contractual information and unfair terms?

In April 2009 the Law Commission and the Scottish Law Commission published an issues paper on micro-businesses and pre-contractual information and unfair terms.

Research shows that many micro-businesses do not have specialised knowledge of insurance and are increasingly buying their insurance online without the benefit of a broker, in much the same way as consumers do. The Paper asks specific questions about protection against unfair terms in insurance contracts for micro-businesses. It also puts forward proposals to treat micro-businesses as consumers for the purposes of pre-contractual information. Finally, it discusses how a micro-business should be defined.

We received 49 responses and  published a summary of these responses in November 2009. The consultation revealed that a majority supports a change in insurance contract law so that micro-businesses would be treated like consumers for the purposes of pre-contractual information and unfair terms. 

We published a policy statement on non-disclosure, misrepresentation and warranties in business insurance contract law in Spring 2010.

This project relates to our project on Insurance Contract Law.

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