A chip is almost always user damage, how can a screen chip without you doing anything to it?
You will be covered under your iPhones insurance. Assuming your insurance is with O2 and not with carphone warehouse the normal procedure is for you to call customer service - 202 from your handset or 0870 600 3009 and they will transfer you to their insurance department.
For accidental damage the insurer will arrange a doorstep swap with the courier - the courier will bring to you your new handset and will take away the damaged handset (you keep your accessories). There is an excess of £25. This is normally next working day as long as you call before 4pm.
If you say it is not accidental damage you will have to take it to an O2 store or apple store where they will return it to apple for repair. If apple decide it is user damage it will be returned unrepaired to you, there may be a charge for handling. If apple decide it is guaranteed under the manufacturers warranty you should receive your repaired handset within 3 working days.
All of this information is in your O2 contract T&C and your Insurance T&C.