Our terms of business.
This terms of business agreement (TOBA) sets out the basis on which Vara agrees to provide services to you, whether as a direct client or as an intermediary.
Our identity
Who are we.
Koral AI Operating Company Limited is a private limited company registered in England and Wales under company number 17256222, at registered office address 101/6 Pearson Square, London, England, W1T 3BJ. Vara is an appointed representative of Innovative Risk Labs Ltd, which is authorised and regulated by the Financial Conduct Authority under firm reference number 609155.
In these terms of business, Koral AI Operating Company Limited is also referred to as “Vara”, “we”, “us”, “our”, or “ourselves”.
Your status
Relationships.
If you are an intermediary, you will be a “commercial customer” as defined in the FCA regulations. In all cases, you must ensure that by instructing us you are confirming that you have the authority to do so on behalf of your customer. It is both our obligation and yours to ensure that we hold and comply with all necessary licences, statutory legal and regulatory rules that apply.
If you are a direct insured, this document sets out the basis on which we will provide you with services in relation to each contract of insurance that we place on your behalf, taking into consideration your demands and needs, and complying with all necessary licences, statutory, legal and regulatory rules.
What we do
Our services to you.
We act as intermediary for you and provide insurance intermediation, broking and other insurance distribution services with reasonable skill and care. We are also subject to the law of agency, which imposes various additional duties upon us. We will arrange insurance with insurers to match, as far as possible, your insurance demands and needs — or, if you are an intermediary, the demands and needs of your client — issue policy documentation to you in a timely manner, assist with any ongoing changes, and assist when you need to make a claim against the policy.
We will advise you on and recommend cover to meet your demands and needs. The insurer behind that cover may be:
1
A single insurer
2
A group of insurers acting on a co-insurance basis
We will provide you with a list of the insurers we access when we provide insurance policies to you.
In these circumstances, we may also act for and owe duties of care to other parties.
The basis on which we advise. We give advice. That means we will assess what your business needs, and then recommend a specific policy to you and explain why we think it is right for you. We advise on the basis of a limited panel of insurers rather than a fair analysis of the whole of the market — the section below sets out what that means. The decision to buy remains yours, and we will always tell you what a policy does not cover as well as what it does.
Important note. We do not offer or provide advice in relation to tax, accounting, regulatory, legal or other specialist matters, and you should take separate advice as you consider necessary regarding such matters.
You agree that by using our services, we may use electronic placing, electronic servicing, and electronic claims-handling services of third parties, and if we do so we will be acting for you — and, if you are an intermediary, for your client as agent — so that in doing so you and your client will be bound in accordance with the arrangements we have in place from time to time to access those electronic platforms.
How far our advice reaches
The scope of our advice.
We advise on and arrange commercial insurance on the basis of a limited panel of insurers, rather than a fair analysis of the whole of the market. The insurers on our panel are named on our insurer list. Where we recommend a policy to you, we will explain in writing why we consider it meets your demands and needs.
This means we consider policies from the insurers and managing general agents we hold agencies with, rather than carrying out a fair analysis of every contract available on the market.
We are not tied to any single insurer, and no insurer has any ownership interest in us. But you should understand that there may be policies available elsewhere in the market that we have not considered, and you are free to seek cover through another broker as well as through us.
If you would like to know which insurers we approached for your particular risk, and which we did not, ask us and we will tell you.
What this means in practice. Our advice is a recommendation about the best fit we can find from our panel for what you have told us about your business. It is not a statement that no better policy exists anywhere in the market.
How we advise
Our advice and your demands and needs.
Before we recommend anything, we will ask you about your business so we understand what you actually need cover for. We use technology to prepare and structure that information and to approach the insurers on our panel efficiently — but the recommendation itself is made by a named person at Vara who is responsible for it, not by a system.
Whenever we make a personal recommendation, we will give you a written explanation setting out:
1
What you have told us about your business and what you need the insurance to do.
2
Which policy we are recommending, and why we consider it meets those demands and needs.
3
The significant limits, exclusions, excesses and conditions you should know about before you decide.
4
Anything you told us you wanted that the policy does not cover.
Our advice can only be as good as the information it is based on. If your circumstances change, or if something we have recorded about your business is wrong or out of date, tell us — it may change what we would recommend.
Warning. A recommendation is not a guarantee. We can advise you on which policy we believe best fits your needs from our panel, but the insurer decides whether to offer cover and whether to pay a claim, on the terms of the policy you buy.
Managing conflicts
Conflict of interest.
In the performance of our services, situations may arise where we have conflicting interests. If this occurs, we have procedures, systems and controls in place to deal with it.
Circumstances may arise where we have a conflict of interest between:
1
Us (including our employees or agents)
2
You and another of our clients
We always aim to treat you fairly and avoid conflicts of interest. We never deliberately put ourselves in a position where our interests, or our duty to another party, prevent us from discharging our duty to you.
Should a situation arise where our own interests conflict with any duty we owe to you, our Conflicts of Interest Policy is designed to help us recognise and manage such circumstances, and we will not proceed until you have been fully appraised of the position and have given your informed consent.
Choosing insurers
Market security.
We will identify clearly and seek your consent for the use of any market security prior to placing cover. Our selection of insurers is based generally on our experience and knowledge of the market and the use of recognised rating agencies such as:
1
Standard & Poor’s
2
A.M. Best
3
Moody’s
This information is in the public domain, and we recommend you use it. You should advise us immediately if you have any concerns about the security we have selected.
Before you commit to a policy, we will give you a security score for the insurer being used, so that you can make an informed decision about the security behind your cover. Where an insurer is unrated or non-rated by the agencies above, we will instead provide their latest published financial reports. If you would like this information at any other time, ask us and we will provide it.
Important. We cannot and do not guarantee or accept any responsibility for the financial standing or financial performance, including solvency or continuing solvency, of any insurer used.
Your responsibility
Duty to disclose.
1
A business insured (an insured who has bought insurance mainly for purposes related to their trade, business or profession) has a duty to disclose to the insurer every material circumstance which it knows or ought to know after reasonable search.
2
A retail customer (an individual buying insurance mainly for purposes unrelated to their trade, business or profession), subject to UK law, has a duty to take reasonable care to answer the insurer’s questions fully and accurately and to ensure that any information volunteered is not misleading.
If you are an intermediary, it is the duty of your client, and you as their agent, to make a fair presentation of the risk to be insured. If you are a direct customer, please note the above.
This duty exists:
1
Before the cover is placed
2
When it is renewed
3
Any time that it is varied
The policy wording may also provide that this duty continues for the duration of the policy period.
Warning. Failure to disclose a material circumstance may entitle an insurer to: impose different terms on the cover; proportionately reduce the amount of any claim payable; avoid the policy from inception; or refuse to pay claims.
Legal framework
The Insurance Act 2015.
This clause only applies to insurance policies which are subject to the laws of England and Wales, Scotland, and Northern Ireland. The UK Insurance Act 2015 allows non-consumer insureds and insurers to contract out of certain provisions of that Act in a policy of insurance for a non-consumer insured. However, any “disadvantageous terms” must meet certain transparency requirements. We will not provide advice in respect of any proposed contracting out of the Act.
The process
Quoting, placing and confirmation of cover.
We will:
1
Seek to understand your requirements
2
Keep you fully informed of progress at all stages of negotiations
3
Provide you with details of the terms indicated by insurers
4
Include an indication of the likely premium cost
Important. It is vital that you provide us with all relevant information and that you keep us informed of changes in material circumstances, to enable us to properly represent your interests.
We will promptly advise you by email, or other agreed means of communication, of the completion of the insurance arrangement(s). This will be in the form of one or more of the following:
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Evidence of cover document
2
An insurance policy
3
A certificate of insurance
Documentation review. You should:
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Familiarise yourself with all terms of any insurance that you purchase
2
Treat all conditions and warranties seriously and strictly comply with them
3
Check all documents sent to you carefully
4
Ensure they are entirely in accordance with your understanding and instructions
Warning. Failure to comply with policy conditions may entitle the insurer to decline a claim under your insurance.
Our obligations
Financial crime.
We are committed to the fight against financial crime, and we are obliged to comply with UK legislation and FCA regulations.
Bribery and corruption. We have in place strict policies regarding bribery and corruption, in compliance with applicable regulatory requirements, rules and laws, including the UK Bribery Act 2010. It is integral to our relationship with you that when you are doing business with us, you (and any of your agents) have similar policies and procedures in place to ensure that acts of bribery or corruption do not take place.
Warning. Any breach of bribery laws by any party with whom we transact business, either directly or indirectly, will entitle us to treat our agreement with them as immediately terminated.
Money laundering. UK regulation requires that we obtain:
1
Certain information and evidence to confirm your identity
2
Address and registered address
3
Company registration and certificate of incorporation
4
Parent company details
5
List of directors, shareholders, and beneficial owners
This due diligence process is commonly known as “Know Your Customer” (“KYC”). If we cannot source this information electronically, we will request the necessary information from you.
Sanctions. We are legally obliged by UK regulation to comply with all sanctions regimes and legislation, which affect regular screening activities to confirm that we are not providing financial services or resources to sanctioned individuals.
Money matters
Payment of premium.
You can pay your premium in full by BACS transfer against an invoice, or by card payment through our payment provider, Stripe.
Vara does not hold client money at any point. Premium you pay is paid into an Insurer Trust Account held by our principal, Innovative Risk Labs Ltd — Vara has no access to or control over these funds. Insurers are paid from this account on a monthly basis, through a bordereau reporting process agreed between our principal and the insurers.
If you’d prefer to pay monthly rather than in full, this can be arranged through premium finance with Close Brothers. This is a separate credit agreement between you and Close Brothers, and will be subject to their own terms, including any interest or charges they apply. If you fall behind on payments under that agreement, Close Brothers will deal with it under those terms, including any collection action — this is between you and them, not us. We receive a commission from Close Brothers where you take premium finance; see Our earnings below.
You will be sent a document clearly showing the total premium due and any taxes or charges. Premium should be paid in sufficient time to meet the payment terms set by the insurer, in the currency shown on that document.
What we charge
Fees and charges.
We do not charge you a broking fee. There is no charge from us for arranging a new policy, for renewing it, for making a mid-term adjustment, or for cancelling.
This does not mean our service is free — we are paid by commission from the insurer. How that works is set out in Our earnings below.
Charges may still be applied by others:
1
By the insurer, on cancellation. If you cancel a policy, the insurer may apply a time on risk charge for the period you were covered. Any refund is calculated and paid by the insurer, not by us. If any payments are outstanding on your account at the time, only the remaining credit, if any, will be refunded.
2
By Close Brothers, if you pay monthly. Premium finance is a separate credit agreement between you and Close Brothers. They will tell you about any fees, charges or interest as part of that agreement before you enter into it.
Your cancellation rights, and any period during which you can change your mind, are set by the policy you buy. We will point these out to you before you commit.
If we ever introduce a fee, we will tell you what it is, and what it is for, before you are committed to anything.
How we are paid
Our earnings.
In return for placing your business with insurers and other product providers, we receive a commission from them. This is a percentage of the annual premium you are charged. We do not charge you a broking fee.
If you choose to pay monthly through premium finance with Close Brothers, we also receive a commission from Close Brothers, calculated as a proportion of the interest you pay under that credit agreement. This means we earn more if you pay monthly than if you pay in full, and you should take that into account when you decide how to pay.
You are entitled, at any time, to ask us how much commission we have received as a result of placing your insurance or arranging your premium finance. Contact Daniel Prescott at daniel@vara.insure, or ask the broker handling your account, and we will tell you.
At no time will the way we are remunerated conflict with our responsibility to meet your needs and treat you fairly.
Identity and creditworthiness
Credit checks.
We, the insurers and any credit providers may use publicly available data from a variety of sources, including credit reference agencies and other external organisations, to verify your identity or creditworthiness, to prevent fraud, and to obtain quotes and payment options on your behalf. Each of these searches may appear on your credit report, whether or not your application proceeds.
By agreeing to these terms, you agree to these uses of your information. How we handle your personal information is set out in full in our privacy policy.
If we cannot meet our obligations
Compensation arrangements.
We are covered by the Financial Services Compensation Scheme (FSCS). You may be entitled to compensation from the scheme if we cannot meet our obligations. This depends on the type of business and the circumstances of the claim.
Insurance advising and arranging is covered for 90% of the claim, without any upper limit. For compulsory classes of insurance, insurance advising and arranging is covered for 100% of the claim, without any upper limit. This scheme does not apply to consumer credit.
Further information about compensation scheme arrangements is available from the FSCS on 0800 678 1100 or 020 7741 4100, or by visiting www.fscs.org.uk.
Sums insured
Adequacy of insurance values.
It is your responsibility as the insured to make sure that all sums insured and policy limits are adequate. We strongly recommend that you consult an appropriate professional — for example a surveyor or an accountant — to make sure the sums insured and the limits under your policy are suitable for your business.
Warning. If your sums insured are set too low, an insurer may reduce the amount it pays on a claim in proportion to the shortfall. Reviewing these figures at each renewal is the best protection against that.
Making a claim
Claims.
It is very important that you carefully read the terms and conditions, paying particular attention to notification requirements under the insurance contract that we have placed on your or your client’s behalf, as requirements can vary substantially from policy to policy.
To notify us of a new claim or circumstance, please see our Insurance Claims page for how to contact us.
Warning. Please note that failure to promptly notify your underwriter of a claim or circumstances could result in the claim being refused.
If things go wrong
Complaints.
We take any complaints very seriously, and we will ensure that complaints are handled fairly, effectively and promptly, and are resolved at the earliest opportunity. Full details of how to make a complaint, our process and timescales, and your right to refer a complaint to the Financial Ombudsman Service, are set out on our How to Make a Complaint page.
Your data
Data protection and security of information.
Your personal information will be kept secure and processed:
1
Lawfully, fairly and transparently
2
Only as necessary for specified purposes
3
Securely, with protection against unauthorised processing
4
With appropriate technical and organisational measures
Full detail on how we collect, use and protect your personal information is set out in our privacy policy.
Our liability
Limitation of liability.
We will not be liable for any direct or indirect losses, damages, costs or expenses unless arising directly from our negligence, wilful default or fraud. Our total liability shall not exceed £2,000,000, except in cases of wilful default or fraud.
Ownership
Intellectual property.
We shall retain all title, copyright, patents and other intellectual property rights to all methodologies and documents used in our provision of services to you.
Legal basis
Governing law and jurisdiction.
This agreement will be governed by, and construed in accordance with, English and Welsh law, and the parties irrevocably submit to the exclusive jurisdiction of the courts of England and Wales.
Ending or changing this agreement
Termination and amendments.
1
Either party may cancel this agreement with 30 days’ written notice.
2
We shall be entitled to receive any commission or fees for insurance contracts placed prior to termination.
3
No variation shall be effective unless in writing.
4
Amendments may be sent by email or as a revised Terms of Business document.
VARA
Vara Commercial Insurance · 0333 091 3663
Vara is a trading name of Koral AI Operating Company Limited. Vara is an appointed representative of Innovative Risk Labs Ltd, under Firm Reference Number 1060955. Innovative Risk Labs Ltd is authorised and regulated by the Financial Conduct Authority, under FRN 609155. We are registered in England and Wales under Registered Company Number 17256222.