There was even more good news recently for businesses regarding insurance, following on from our news last week that it’s almost certain Flood Re will be extended to cover the commercial sector.
There’s going to be a new law which should ensure that businesses will have their insurance claims settled more quickly. The Enterprise Act has been granted Royal Assent and will come into force in May 2017. This will enable commercial policyholders to receive damages if their claims are not paid by their insurer within a reasonable amount of time.
That’s fantastic – but unfortunately ‘reasonable amount of time’ has not been defined. The Act makes insurers liable to pay compensation if a delay in paying out a claim results in financial difficulties for the policyholder. But the policyholder has to prove that the handling of their claim was unreasonable and that the insurer could have foreseen the damage that resulted from the delay.
Industry insiders have been quoted as saying that it will be difficult to prove a claim was handled unreasonably, that damage was caused and that this could have been foreseen by the insurer. As the Act isn’t coming into effect for a year to allow insurers to prepare for this change, we’ll have to wait a while to see whether it is simply too difficult to prove that a business has been unreasonably damaged.
We’ve worked with many different types of businesses who realised the struggle they faced when they had to make an insurance claim and sought professional help from a loss assessor. Apart from taking away the difficulties of dealing with their insurer, many of them felt afterwards that having a professional on their side speeded up the payment of their claim – and in some cases made the difference between whether their businesses survived or went under. You can read about their experiences here.