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New law to speed up insurance payments to businesses begins

A new law that creates a legal obligation for insurers to pay claims to businesses within a reasonable timeframe starts from May 2017.

As part of the Enterprise Act 2016, policyholders will have the right to claim damages and interest in the event of a late claim payment.

The new measures applies to any business insurance policy placed or renewed on or after 4 May 2017 in the UK.

Currently, there is no clear requirement for insurers to pay undisputed claims to businesses within a reasonable timeframe.

It will give policyholders a contractual right to the payment of insurance claims within a reasonable time and provide for general damages and interest to be payable by an insurer where a policyholder suffers additional loss because of the insurer's unreasonable delay in payment.

What constitutes a 'reasonable' time frame will be case specific.

The bill is expected to be a significant benefit to many small companies, giving them peace of mind, and also helping them recover faster from incidents such as fires and floods.

Peter Lole is an experienced and respected insurance broker for a wide range of businesses, offering a reassuring combination of strong buying power, industry expertise and high standards of customer service.

We help businesses identify and mitigate against risks, ensuring they strike the right balance between protection and cost. To find out more about our business insurance services, click here.


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