How should Insureds and Insurers behave (pre-action) when coverage disputes arise?
In this piece published on 12th December, I ask why we don’t have a specific CPR Pre-Action Protocol for coverage disputes and whether it is time we had one.
“None of these common objections stand up to scrutiny however in my view. Insurance has a special function in society as a private instrument for transferring risk. When that risk sharing mechanism breaks down, the parties are often left in a procedural vacuum unless the policy specifies a process capable of being triggered quickly, or the insured’s complaint can be referred to the Financial Ombudsman.
The need for an Insurance Protocol reflects the need to protect policyholders who might be facing business critical situations or something impacting their families and homes; the need to improve the image of the industry generally following systemic events such as Covid; to create more procedural certainty the cost of which can be predicted more accurately by Insurers and their actuaries; and to acknowledge the special fact that the recipient of a claim in this potential Protocol (unlike many other Protocols) has already assembled most if not all of the relevant facts for the purpose of the declinature that prompts the dispute”
