business-insurance News
Business needs faster payouts for insurance claims
When a business claims on their insurance it can take up to 6 months for the claim to be paid out which the Law Commissioner has said that “contract law” in England and Wales is unfair.
Therefore business insurance is now under the microscope of the Law Commissioner in England and Wales and changes in the processes of paying out on a claim are possibly going to be altered to help small businesses receive payments on their claim(s) faster.
In England and Wales a business can sue their insurance company if the contract is broken but can’t seek compensation if a large delay happens in the business actually receiving the insurance pay out from their insurance claim.
David Hertzell the Law Commissioner said that the Business Insurance rules in England and Wales are “unfair, unprincipled and out of step with 2011’s commercial business realities”.
Concern is that due to the riots in the summer of 2011which caused damage to a lot of small businesses – the worrying aspect is that even though the business has a valid business insurance policy in place are they are finding it hard to get back on their feet – which is not helped by having to wait for the money to replace broken windows and damaged or stolen equipment.
A shop in Birmingham who put in a claim on the 9th August 2011 for loss of cigarettes and alcohol, all of which totalled to a claim value of around £6000 to £7000, the shop is still waiting to receive cleared funds from their insurance claim. As a result the business owner has had to put their own money in to counter act the loss in cashflow thus causing stress and anxiety to the business owner.
So the action which is proposed to increase the insurance claim payout timescale could be a real help to businesses especially with the viewed continuing lack of support from the banking industry with decline in overdrafts and loans hindering many companies throughout the United Kingdom.