Insurer payment delays will result in damages - Law Commission

The industry has suggested the law should be re-characterised to reflect the insurer's duty as the ‘duty to pay a valid claim within a reasonable time.' Responses to the Commission's consultation on 'Damages for Late Payment and the Insurer's Duty of Good Faith' reveal the majority of the insurance industry believes the law is ripe for reform. At present under law in England and Wales, if payment of a claim is delayed, a policyholder who suffers loss as a result has no remedy other than a claim for interest. This was exemplified by the Sprung v Royal Insurance (UK) Ltd case where t...