The Enterprise Act 2016
The Enterprise Act 2016 (the “Act”) came into effect on 4 May 2017 and introduced a new section 13A of the Insurance Act 2015. This will apply to insurance and reinsurance policies incepted, varied or renewed after this date if they are subject to the law of England and Wales, Scotland or Northern Ireland.
Currently, policyholders are unable to pursue insurers for losses suffered due to late payment of a claim. The Act introduces an implied term to insurance contracts that insurers will pay any sums due in respect of a claim in a reasonable time.
If there is unreasonable delay in payment of the claim, insureds may be able to claim for loss suffered as a result of the delay. This will act as an additional remedy for insureds, alongside payment of the claim (and interest in certain situations). Whilst there is no cap on damages that can be awarded, the burden of proof is with the insured and the insured will need to satisfy certain conditions for a valid damages claim.