So yet another piece of insurance legislation has arrived. The new Enterprise Act 2016 came into force last week and is aimed at ensuring that insurers do not drag their heels unreasonably when negotiating a commercial insurance claim.
We’ve written about this before and we applaud the sentiment behind the new Act. But, in common with many industry experts, we feel this is a case of ‘wait and see’. The key issue with it is that commercial policyholders can receive damages if their claims are not paid within a ‘reasonable amount of time’ – but this has not been defined.
Some commentators have stated they believe the Act is weighted in favour of insurers: specifically as it allows them to escape liability for consequential damage from a delayed pay-out if they can prove they had reasonable grounds for disputing the claim. It specifies the factors which should be considered in assessing the conduct of the insurer: the type of insurance involved, its size and complexity, any relevant regulatory issues, and any factors outside of the insurer’s control. This sounds like a minefield.
So we probably face some interesting times ahead and the first case brought under the new Act will be fascinating. But in the meantime, we would repeat the message from when we wrote about this before: one of the key reasons for using a loss assessor when making an insurance claim is that we understand the difficulties of dealing with an insurance company. This is particularly true when it comes to a complicated commercial insurance claim. Many of our commercial clients are convinced their business would not have survived if they hadn’t used a loss assessor, because among other things we saw through any delaying tactics. You can read about their experiences here.