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You’re late! Suing your insurer under the Enterprise Act

As of 4 May 2017, The Enterprise Act 2016 imposed a requirement on insurers to make prompt payment of claims. Policy holders are now able to seek compensation for damages if insurers breach this requirement.

 

 ‘Reasonable Time’

Under the new provisions, insurers are given a ‘reasonable time’ to pay a claim – albeit there are several factors that affect what constitutes such ‘reasonable time’:

 

When are ‘late payment’ claims valid?

To minimise exposure to late payment claims, insurers will need to substantiate that they are proactive in the handling of claims. The Act does specify however that if an insurer can show there were reasonable grounds for disputing the claim, the insurer is not is breach of the understood ‘reasonable time’ framework by withholding payment while the dispute is ongoing.

In order to qualify for late payment damages, the insured must have a valid claim under the policy that:

 

Note claims against insurers for breach of the implied term must be brought no later than one year from the date on which the insurer has paid all the sums due in respect of the claim.

 

The Act serves to benefit the interests of the insured and should encourage insurers to improve the proficiency of their claims handling processes.

As of 4 May 2016, The Enterprise Act 2016 will impose a requirement on insurers to make prompt payment of claims. Policy holders are now able to seek compensation for damages if insurers breach this requirement.

 ‘Reasonable Time’

Under the new provisions, insurers are given a ‘reasonable time’ to pay a claim – albeit there are several factors that affect what constitutes such ‘reasonable time’:

 

When are ‘late payment’ claims valid?

To minimise exposure to late payment claims, insurers will need to substantiate that they are proactive in the handling of claims. The Act does specify however that if an insurer can show there were reasonable grounds for disputing the claim, the insurer is not is breach of the understood ‘reasonable time’ framework by withholding payment while the dispute is ongoing .

In order to qualify for late payment damages, the insured must have a valid claim under the policy that:

 

Note claims against insurers for breach of the implied term must be brought no later than one year from the date on which the insurer has paid all the sums due in respect of the claim.

 

The Act serves to benefit the interests of the insured and should encourage insurers to improve the proficiency of their claims handling processes.

 

MJN