Are insurers ‘being difficult’?

Pointing fingers in business

New research from Mactavish, a UK-based analysis firm specialising in commercial insurance governance and disputes, suggests that there is – at the very least – a perception that uncooperative behaviour on the part of insurers is the main reason that commercial insurance claims are either not settled in full or rejected entirely.

The research, which took in responses from senior UK executives and managers who have worked for organisations that have encountered difficulties when submitting major insurance claims, found that 50 per cent of this group said that insurers ‘being difficult’ was the main obstacle. Thirty-two per cent, meanwhile, blamed misleading or unclear wording in insurance policies, while 25 per cent said that the biggest obstacle was the company failing to disclose essential facts about its risks. Twenty-two per cent blamed inadequate cover, and 18 per cent said that the problem was the company breaching requirements that were specified within the wording of the policies.

Mactavish’s research found that nearly 45 per cent of large, complex commercial claims are currently disputed by insurers, resulting in an average delay of three years and average payouts of only 60 per cent of what was originally claimed. Additionally, over the past year, the firm has seen an increase of between 20 and 25 per cent in enquiries for organisations seeking help in reviewing key policy wording in order to ensure that they are protected should they suffer a loss, and an increase of almost 50 per cent in enquires from organisations that are already weathering a dispute with their insurers over payment.

“If an organisation suffers a serious loss and the insurance claim is not settled promptly, the impact on jobs, investment and even business survival can be huge. Unfortunately, in many cases organisations and their Board of Directors do not pay enough attention to this area and are leaving themselves exposed and could potentially be sued by investors and other stakeholders if an insurance claim is rejected because of this.”