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Margaret Campbell

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How often have we seen insurers raise spurious defences, ask further questions and delay payment of good claims for years? For obvious reasons, the insured’s priority when making a claim under any type of insurance policy is that the claim is successfully and promptly resolved. However, it was not until 2016 that any statutory guidance was developed in England on the subject of what is a reasonable time to investigate, evaluate and settle a claim.

Introduced by the Enterprise Act 2016 which came into force on 4 May 2017, Section 13A of the Insurance Act 2015 implies a term into every contract of insurance (concluded after 4 May 2017) that “the insurer must pay any sums due in respect of the claim within a reasonable time”, which is allowed to include “a reasonable time to investigate and assess the claim”.

Section 13A requires insurers to justify the time they take to reach a determination on claims. However, prior to this year, the meaning of “reasonable time” remained undefined in either the legislation or case law.…

Continue Reading Pay and pay without delay – Section 13A of the Insurance Act 2015

The United Kingdom Supreme Court (UKSC) handed down its judgment on 15 January 2021 in The Financial Conduct Authority v. Arch Insurance (UK) Limited and Others. This test case was brought by the FCA on behalf of SME business interruption (BI) policyholders who have suffered financial losses as a result of COVID-19. The High Court judgment was handed down on 15 September 2020, with the special direct appeal to the UKSC taking place on 16 – 19 November 2020. The UKSC decision was largely seen as a victory for policyholders. As commented by Reed Smith partner, Mark Pring, in the Financial Times, “it can be said, without fear of hyperbole, that in principle at least this really is a catastrophic outcome for insurers.”

We have been reporting on these matters closely since March of last year, and have produced several more detailed alerts, which can be found on our Perspectives platform.

The court was asked to consider three broad categories of BI policy wordings, namely:

  • Disease wordings – which provide cover for BI losses sustained in consequence of, following or arising from the occurrence of a notifiable disease within a specific radius of the insured premises (COVID-19 was made a notifiable disease in England and Wales on 5 March 2020);
  • Hybrid wordings – which provide cover for BI losses sustained where restrictions have been imposed on the insured premises in relation to a notifiable disease; and
  • Prevention of access / public authority wordings – which provide cover for BI losses sustained where access to the insured premises has been prevented or hindered as a consequence of authority action/restrictions owing to an emergency in the vicinity of the insured premises.

In this post, we summarise some of the key points of the UKSC’s most recent decision and set out our views on some of the implications of the decision for policyholders (subject always to their individual circumstances).…

Continue Reading FCA v. Arch and others – The UK Supreme Court’s final word on business interruption insurance losses in light of the COVID-19 pandemic

Following on from our previous alert on the Insurance Act 2015 and the key advantages it offers to policyholders of commercial insurance, we have prepared a second alert looking at what might constitute the knowledge of the insured for the purpose of complying with the duty to make a fair presentation, and the possibility of…

The Insurance Act 2015 (the Act) came into force on 12 August 2016, introducing major changes in English law in relation to insurance and all forms of reinsurance.

It applies to all contracts of insurance and reinsurance governed by English law entered into after 12 August 2016. This includes renewals, amendments and endorsements to existing…