Claim settlements drawn out by arbitration processes.
Insurers dispute almost half of claims made by businesses, according to an FT.com report.The article stated that research from Mactavish, to be published this week, will say that nine out of every 20 claims described as “large” or “strategically significant” by the company making the claim have been contested by insurers since 2008.The data will also show that insurers typically take three years to reach settlements, due to arbitration proceedings with gagging clauses.
- Reasons for denial
Among the most frequent reasons for claims being denied were supposed breaches in conditions attached to the policies or inadequate information disclosure.Claims for complex policies such as business interruption, professional indemnity and product liability were especially problematic.
- Mactavish gathered data in 2012 and 2013 from 410 companies with annual sales of more than £50m. It said its research covered a “statistically significant sample of corporate Britain”.About two-fifths of the companies had made a big insurance claim within the prior four years but only a quarter of the cases were resolved to the policyholders’ satisfaction.Last week the government revealed its plans to modernise insurance contracts legislation, however it had dropped the Law Commission’s recommendation that would have entitled companies to seek damages from an insurer if a claim was delayed.
Author: Caitlin Morrison
Source: Insurance Age | 21 Jul 2014
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