Insurers dispute almost half of commercial claims

INSURERS dispute almost half of the claims made by businesses, according to a recent report.

Romero Insurance Brokers has highlighted a research from Mactavish (an expert on insurance governance), published in July, stating 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 also shows 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.

Recently, 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.

It is essential that cover has been arranged on the correct basis to ensure your receive a fast and fair settlement should need to claim on your insurance policy.

Romero Insurance Brokers can provide a confidential review of your current insurance arrangements looking at sums insured, cover provided, warranties and pricing to ensure your cover is up to date and your business is fully protected. 

Romero Insurance Brokers has its own in-house, award-winning claims team to provide support and assistance when you need it most. The team can also take over ongoing claims should people encounter difficulties with an existing broker/insurer. 

For further information, or if you have an issue with a claim and feel you are not getting the support you need, email Richard Nicholson richard.nicholson@romeroinsurance.co.uk or call 0113 281 8110.

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