Damages for Late Payment of Insurance Claims
The Enterprise Bill 2015-16 adds two new sections 13A and 16A to the Insurance Act 2015, which have which are proving rather controversial in some quarters in the insurance industry.
Section 13A if it becomes law, will require insurers to pay insurance claims within a reasonable time, and to pay contractual damages to their insured if they do not do this.
It remains to be seen how a “reasonable time” will finally be interpreted but it should stop that ghastly wheel spinning when the insurer knows the claimant has a good claim but is just trying rather hard to put off the inevitable.
Section 16A allows parties to a business to insurer contract to contract out of section 13A provided that the opt out is clearly worded in the Contract.
So…….
(a) watch this space. The bill had its second reading in the Lords on 12th October and should become law shortly, but also, if it does become law,
(b) look for the nasty small print in your insurance renewal documents, and stop your insurer opting out of Section 13A ☺
