Companies lose more than two-thirds of insurance payment disputes

Companies who take their insurers to court over non-payment lose more than two-thirds of cases, according to new research.

Insurance experts Mactavish said it is “disturbing” for businesses that they lose most cases where they challenge their insurer for not paying out over a claim.

Insurance firms win 68% of commercial cases regarding dispute claims taken to court or public arbitration, according to Mactavish.

Its research analysed the outcome of every UK court case or arbitration appeal relating to payment under business insurance policies – excluding consumer and reinsurance cases – between 2013 and 2019.

1. Construction

2. Manufacturing

3. Transport

Bruce Hepburn, chief executive officer of Mactavish, said: “Our findings are disturbing for organisations that are looking to challenge their insurer’s decision not to pay out on a claim when they perceive the decision to be unfair.

“However, hiring professional consultants to help in this area can greatly enhance your chances of success – both to prevent disputes arising when handling a claim and to resolve them if they do.”

The sector involved in the most disputes over insurance was the construction industry, closely followed by manufacturing and transport.

Cases in the construction sector also heavily favoured the insurers involved, with policyholders only winning 25% of decisions within that industry.

Disputes can also be incredibly lengthy, with Mactavish estimating that it takes an average time of around three years for cases to be resolved.

It also said that even once settlements are reached, the pay-outs are typically for around 60% of the amount originally claimed.