Today the Enterprise Act 2016 (“the 2016 Act”) comes into force strengthening the hand of managing agents and policyholders by requiring insurers to settle claims within a timely manner.

Should insurers fail to act in a proactive fashion, claimants or their agents are empowered to submit an additional claim for any subsequent losses incurred.

The nuts & bolts: the 2016 Act places the onus on insurers to settle claims in a reasonable time, although it falls short of quantifying such a period. This is unsurprising when property related claims can be both substantial and contentious.

Obvious delays will still arise where insurers have reasonable grounds to dispute a claim or where the quantum, size or complexity of the claim requires further clarification however the new legislation aims to keep the claim progressing and settlement forthcoming by effectively starting the clock ticking the minute a claim is agreed.

Reminder: Policyholders should remember that they have up to one year to submit a compensation claim after settlement is received, if they latterly discover that a delay has resulted in additional cost implications that were either unforeseen or unquantifiable at the time of settlement.

Opting out: a final word of warning; in keeping with the Insurance Act 2015, insurers are permitted to contract out of many of the provisions of the 2016 Act. The right to damages for late payment of claims will be an implied term in all insurance policies however parties can agree to contract out should they so wish. Such a situation is most likely where the insurers impose such a condition with a “take it or leave it choice” for the agent or policyholder. Our advice is to engage a reputable broker who welcomes the protection that the 2016 Act brings for both the claimant and the insurance industry.