Late payment and potentially fraudulent claims

2017 is now upon us, meaning that implementation of the “late payment” amendment to the Insurance Act 2015 on 4 May is fast approaching. This amendment, set out at part 5 of the Enterprise Act 2016 introduces an implied term into all insurance contracts (and variations) entered into after this date that claims will be paid “within a reasonable time”.

While it is the aim of all insurers to pay claims in a timely manner, sometimes, particularly with claims where concerns arise over potential fraud, payment may be delayed while the claim is validated, potentially giving rise to a claim by an insured for late payment.

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Late Payment: Yes but no but…

“Next year” is nearly upon us and in 2017 the “late payment” amendment to the Insurance Act 2015 introduced by the Enterprise Act 2016 will apply to policies entered in to (or variations) from 4 May. Time will pass incredibly quickly yet there are steps that should be considered now in relation to policy wording if the underwriter wishes to contract out of the new implied term.

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