{"id":128328,"date":"2026-03-06T13:46:14","date_gmt":"2026-03-06T13:46:14","guid":{"rendered":"https:\/\/my.legal500.com\/guides\/?post_type=comparative_guide&#038;p=128328"},"modified":"2026-03-06T13:46:14","modified_gmt":"2026-03-06T13:46:14","slug":"united-kingdom-insurance-disputes","status":"publish","type":"comparative_guide","link":"https:\/\/my.legal500.com\/guides\/chapter\/united-kingdom-insurance-disputes\/","title":{"rendered":"United Kingdom: Insurance Disputes"},"content":{"rendered":"","protected":false},"template":"","class_list":["post-128328","comparative_guide","type-comparative_guide","status-publish","hentry","guides-insurance-disputes","jurisdictions-united-kingdom"],"acf":[],"appp":{"post_list":{"below_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">Fenchurch Law<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2024\/01\/Fenchurch_MASTER_cmyk-1.jpg\"\/><\/span><\/div>"},"post_detail":{"above_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">Fenchurch Law<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2024\/01\/Fenchurch_MASTER_cmyk-1.jpg\"\/><\/span><\/div>","below_title":"<span class=\"guide-intro\">This country specific Q&amp;A provides an overview of Insurance Disputes laws and regulations applicable in United Kingdom<\/span><div class=\"guide-content\"><div class=\"filter\">\r\n\r\n\t\t\t\t<input type=\"text\" placeholder=\"Search questions and answers...\" class=\"filter-container__search-field\">\r\n\t\t\t<\/div>\r\n\r\n\t\t\t\r\n\r\n\r\n\t\t\t<ol class=\"custom-counter\">\r\n\r\n\t\t\t\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What mechanism do insurance policies usually provide for resolution of disputes between the insurer and policyholder?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Insurance contracts typically provide for the resolution of disputes through court proceedings or arbitration. They may specify a multi-tiered process that requires Alternative Dispute Resolution (\u201cADR\u201d) in the first instance. The composite nature of many insurance contracts can give rise to conflicting provisions, and careful consideration should be given to the appropriate forum, with a clear explanation of the triggering events and the order of application, where alternative scenarios are dealt with in a single clause. Policyholders may prefer to have disputes heard in open court, particularly where claims could arise under multiple policies or excess layers.<\/p>\n<p>The combination of arbitration and choice-of-law provisions may allow the parties to modify the application of the chosen substantive and\/or procedural law. For example, \u201cBermuda form\u201d excess liability insurance requires disputes to be resolved by arbitration in London, with a modified version of New York law used to determine substantive policy disputes.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a protocol governing pre-action conduct for insurance disputes?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Where the policy provides for disputes to be resolved by litigation, the Civil Procedure Rules (\u201cCPR\u201d) will govern that litigation. The CPR include pre-action protocols on best practice before commencing various types of claims, but there is no specific protocol for insurance coverage. The general Practice Direction on pre-action conduct applies, with the overriding objective of encouraging parties to engage constructively in the early exchange of information, to resolve disputes swiftly and cost-effectively, and to avoid recourse to court proceedings where possible. There is no analogous protocol for arbitration.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are local courts adept at handling complex insurance disputes?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The Commercial Court in the High Court of Justice has a long history of handling complex insurance claims, often with an international element. The judiciary&#8217;s experience and quality are unrivalled, with common law precedent providing extensive guidance and a degree of certainty about the outcome of insurance disputes.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is alternative dispute resolution mandatory?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The use of alternative dispute resolution is voluntary, though well established. The UK is a signatory to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, with relevant laws contained in the Arbitration Act 1996, which has been recently reformed by the Arbitration Act 2025. The Civil Justice Council issued a report in 2021 endorsing mandatory mediation in principle, provided the obligation imposed on parties is proportionate to the matters in dispute. In Churchill v Merthyr Tydfil Council [2023], the Court of Appeal confirmed for the first time that Judges can direct legal proceedings to be stayed and require parties to take part in ADR; departing from the longstanding precedent in Halsey v Milton Keynes [2004], which had established that parties could not be forced to mediate. Many insurance policies include multi-tier dispute resolution clauses requiring ADR (often mediation) before litigation or arbitration. Whether it is mandatory will depend on the policy wording.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are successful policyholders entitled to recover costs of insurance disputes from insurers?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The general rule is that costs follow the event, so that an unsuccessful party will be required to pay the successful party\u2019s costs (to be assessed if not agreed) as well as their own. The right to recover costs arises at the point of issuing proceedings (but will include costs incurred prior to proceedings being issued). However, a contribution towards pre-action costs may be agreed with the insurer as part of any pre-action settlement. The extended fixed recoverable costs regime applies to most civil claims issued from 1 October 2023 with a claim value not exceeding \u00a3100,000.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there an appeal process for court decisions and arbitral awards?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Permission to appeal against a court decision may be granted under CPR, section 52, where (a) the appeal would have a real prospect of success (in the opinion of the Judge hearing the application), or (b) there is some other compelling reason for it to be heard. A party to arbitral proceedings can appeal to the court on a question of law arising out of an award under section 69 of the Arbitration Act 1996 if all parties agree to the appeal, or the court grants permission.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How much information is the policyholder required to disclose to the insurer? Does the duty of disclosure end at inception of the policy?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The Insurance Act 2015 (\u201cIA2015\u201d) imposes a duty of fair presentation requiring a policyholder to disclose material circumstances it knows or ought to know (from a reasonable search), or else sufficient information to put a prudent insurer on notice that it needs to make further enquiries. A circumstance is material if it would influence the judgment of a prudent insurer, which may include special or unusual facts relating to the risk, or concerns which led the policyholder to seek insurance.<\/p>\n<p>For corporate policyholders, knowledge of senior management and individuals responsible for arranging the insurance is relevant to discharging the duty. The Court of Appeal decision in Delos Shipholding SA &amp; Ors v Allianz Global Corporate and Specialty SE &amp; Ors [2025] recently reaffirmed this point. It provided helpful guidance on who would be considered \u201csenior management\u201d for disclosure purposes.<\/p>\n<p>The Consumer Insurance (Disclosure and Representation) Act 2012 imposes a duty on consumer policyholders to take reasonable care not to make a misrepresentation when completing the proposal form and answering the insurer&#8217;s questions.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What remedies are available for breach of the duty of disclosure, and is the policyholder\u2019s state of mind at the time of providing the information relevant?\u202f\u202f\u202f\u202f\u202f\u202f<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>If the insurer can show that a fair presentation of the material circumstances would have led it to decline the risk, or to agree to provide cover only on restricted terms, the insurer will have a remedy against the policyholder. If the breach was deliberate or reckless, the insurer may avoid the policy (i.e. treat it as cancelled from the start) without returning any premiums paid and refuse all claims. If the breach was merely accidental or careless, the position depends on what the insurer would otherwise have done: if the policy would have been issued on different terms, the policy will be treated as if those terms applied from the outset; and if the insurer would have charged a higher premium, the insurer may reduce proportionately the amount paid out in relation to any claim. IA2015 removes the remedy of avoidance of the contract for breach of the duty of good faith, previously applicable under section 17 of the Marine Insurance Act 1906 (\u201cMIA1906\u201d).<\/p>\n<p>In the recent case of Clarendon Dental Spa LLP &amp; Anor v Zurich Insurance Limited [2025], the Court confirmed that ambiguous insurer questions are construed contra proferentem, reaffirming that a policyholder&#8217;s disclosure obligations are shaped by the questions insurers choose to ask.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are certain types of provisions prohibited in insurance contracts?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>IA2015 abolished \u201cbasis of contract\u201d clauses, which had the effect of converting a policyholder\u2019s pre-contract representations, including all statements contained in the proposal, into warranties.<\/p>\n<p>Insurance contracts covering criminal fines are likely to be unenforceable based on the ex turpi causa principle, prohibiting recovery of damages resulting from a person\u2019s own illegal or unlawful acts.<\/p>\n<p>Parties to consumer insurance cannot contract out of section 13A of the IA2015, which imposes late payment of claims provisions on policies incepting after 4 May 2017.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">To what extent is a duty of utmost good faith implied in insurance contracts?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>MIA1906 provides that insurance contracts (both marine and non-marine) are contracts of \u201cutmost good faith\u201d. This principle served as the basis of a policyholder\u2019s pre-contractual duty of disclosure prior to the changes introduced by IA2015 and remains relevant to limited post-contractual duties of fair dealing. For example, where a term of the insurance requires the policyholder to provide the insurer with information in particular circumstances, or when a liability insurer exercises a right to conduct the insured\u2019s defence to a claim made by a third party, the policyholder and insurer are required to act in good faith towards each other in performance of the contract. The duty comes to an end upon the commencement of proceedings between the policyholder and the insurer, or upon settlement of the policy claim.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Do other implied terms arise in consumer insurance contracts?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The Consumer Rights Act 2015 gives rise to implied terms in consumer insurance contracts that the insurer must perform the service provided with reasonable skill and care, within a reasonable time and (if the premium has not been agreed), for a reasonable price. These obligations overlap to some extent with the Insurance Conduct of Business Rules, and policyholders may be able to seek redress through the Financial Ombudsman Service established by the Financial Services &amp; Markets Act 2000.<\/p>\n<p>Insurers are not permitted to use contractual terms to put consumers in a worse position than they otherwise would be under the terms of IA2015.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there limitations on insurers\u2019 right to rely on defences in certain types of compulsory insurance, where the policy is designed to respond to claims by third parties?\u202f\u202f<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The Road Traffic Act 1988 limits the exceptions operable in motor policies to safeguard the rights of third-party victims. Third-party rights are preserved where the policyholder is in breach of a policy term or the duty of fair presentation, in the event of the policyholder\u2019s insolvency, and where the vehicle is driven by another person not covered by the policyholder\u2019s insurance. The statutory requirements are regarded as a minimum, and motor policies will be construed to comply with the legislation.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What is the usual trigger for cover under insurance policies covering first party losses, or liability claims? Are there limitation periods for the commencement of an action against the insurer?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>First-party insurance is usually triggered by the occurrence of an insured peril causing damage to insured property during the policy period. Liability insurance typically covers legal liability to a third party, triggered by a quantified liability being established by a judgment or by settlement with the claimant. Latent defects insurance responds to structural problems or safety risks arising during the policy period, where the defects could not have been discovered upon reasonable inspection prior to completion.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Which types of loss are typically excluded in insurance contracts?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Depending on the type of insurance policy, typical exclusions may include existing claims, defects, fraud, dishonesty, contractual liability, consequential loss, fines and penalties, other insurance, pollution, gradual deterioration, or inherent vice.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Does a \u2018but for\u2019 or \u2018proximate\u2019 test of causation apply, and how is this applied in wide-area damage scenarios?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Insurers are only liable for losses proximately caused by an insured peril, unless the policy wording provides otherwise. \u201cProximate cause\u201d means the dominant, effective or operative cause, whether or not this is the last to occur in a sequence of events. The courts approach this as a matter of common sense evaluation, not a mechanistic analysis. \u201cBut for\u201d causation (i.e. but for the existence of X, would Y have occurred?) is often applied as a threshold test, although this is not always necessary or sufficient. In FCA v Arch Insurance &amp; others [2021] UKSC 1, the test case on business interruption insurance coverage following the COVID-19 pandemic, the Supreme Court held that \u201cbut for\u201d causation should not be applied rigidly, especially where insured and uninsured perils stem from the same underlying fortuity. Where there is wider-area damage, the Supreme Court held that the correct approach is not to ask whether the business would have suffered the same loss \u201cbut for\u201d the damage to the insured property, because this improperly collapses multi-causal analysis. Instead, concurrent causes arising from the same fortuity are treated as equally operative, allowing recovery where the policy wording supports it.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What is the legal position if loss results from multiple causes?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Where two or more causes of approximately equal efficacy operate concurrently to bring about the loss, they will be regarded as concurrent proximate causes. If one of the proximate causes is an insured peril and the other is uninsured (but not excluded), the loss will be covered under the policy. If one of the proximate causes is excluded under the policy, the loss will not be covered, applying the principle in Wayne Tank v Employers\u2019 Liability Assurance [1974] QB 57.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What remedies are available to insurers for breach of policy terms, including minor or unintentional breaches?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The remedy available for breach depends upon classification of the policy term: (1) failure to comply with a condition precedent to inception of the risk prevents the insurer from facing liability until there has been compliance; (2) failure to comply with a condition precedent to liability prevents a claim by the policyholder unless the condition has been complied with regardless of whether the insurer has suffered prejudice arising from the breach (subject to the effect of section 11, IA2015); (3) conditions that are not expressed to be conditions precedent are bare conditions and general contractual rules apply, so that repudiatory breach allows the insurer to terminate the contract, but any lesser breach does not affect the contract or claim.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Where a policy provides cover for more than one insured party, does a breach of policy terms by one party invalidate cover for all the policyholders?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>IA2015, section 11, provides that insurers may not rely upon breach of policy provisions designed to reduce the risk of loss of a particular kind, or at a particular location or time, if the policyholder can show that the non-compliance \u201ccould not have increased the risk of the loss which actually occurred in the circumstances in which it occurred\u201d. This is designed to prevent insurers from avoiding claims based on breach of policy terms unconnected to the loss.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Where insurers decline cover for claims, are policyholders still required to comply with policy conditions?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>There are conflicting authorities on this point. In Diab v Regent [2006] UKPC 29, the Privy Council held that policy conditions must continue to be observed, whilst judicial comments in Technip v MedGulf [2023] EWHC 1859 suggest that, where insurers decline cover under a liability policy, the right to rely upon claims conditions in defence of a claim by the policyholder would be waived or subject to estoppel. Policyholders should seek to comply with claims conditions where possible for the avoidance of doubt.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How is quantum assessed, once entitlement to recover under the policy is established?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>For a valued policy, the amount recoverable from the insurer is the agreed value. Otherwise, the measure of indemnity is calculated with reference to the value of insured property at the time of loss, the cost to repair damaged property to its previous condition, or the quantum of a liability claim once ascertained by a judgment, arbitral award or binding settlement. Property policies may include specific terms governing the calculation of loss, such as granting the insurer or policyholder the right to choose between reinstatement costs and an alternative basis of payment.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Where a policy provides for reinstatement of damaged property, are pre-existing plans for a change of use relevant to calculation of the recoverable loss?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The purpose of insurance is to put the insured back into the position they would have been if the insured peril had not occurred, which may be achieved by the insurer replacing or repairing damaged property or paying the reduction in market value. The appropriate level of indemnity depends on the policy wording and surrounding circumstances. Where reinstatement is not possible or not elected by a party with the right to choose, diminution in value is the default measure, and this is likely to apply where a policyholder intended to sell the insured property at the time that damage occurs. Post-loss intentions as to reinstatement or otherwise are usually irrelevant, subject to general principles of reasonableness, betterment and proportionality.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">After paying claims, are insurers able to pursue subrogated recoveries against third parties responsible for the loss? How would any such recoveries be distributed as between the insurer and insured?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In relation to contracts of indemnity (i.e. not accident or life insurance), an insurer is entitled to seek recovery of payments made to the policyholder from a third party responsible for the loss. The right of subrogation arises at common law and under MIA1906, section 79, unless modified or restricted by express policy terms. Insurers are prevented from pursuing subrogated claims against co-insured parties under a composite policy, subject to limited exceptions where the terms of any underlying contract between the co-insured parties supports a different conclusion on the intended scope of policy coverage.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Can claims be made against insurance policies taken out by companies which have since become insolvent?\u202f<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The Third Party (Rights against Insurers) Act 2010 (\u201cTPRAI2010\u201d) enables a claim to be pursued against an insolvent company and the insolvent company\u2019s liability insurer at the same time. A statutory mechanism can be used to obtain information about the insolvent party\u2019s insurance at the pre-action stage. The third party can be in no better position than the insured, so that the insurer is entitled to rely upon limitation or any other defence that would have been available as against the insured, as well as any defence available to the insured in respect of the alleged liability.<\/p>\n<p>The TPRAI has been the subject of several insurance coverage disputes over the last year, most notably Makin v Protec &amp; QBE [2025] and Archer v R\u2019N\u2019F Catering Ltd [2025].<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the significant trends and developments in insurance disputes within your jurisdiction in recent years?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Claims arising from the COVID-19 pandemic have been a dominant theme. The business interruption insurance test case brought by the Financial Conduct Authority led to swift guidance from the Supreme Court on typical market wordings.<\/p>\n<p>Going into 2026, the majority of issues arising out of COVID-19 have been resolved. However, with the upcoming limitation deadline for these claims in March 2026, we may see an influx of claims issued to protect them from being time-barred.<\/p>\n<p>The construction industry has faced escalating risks arising from ongoing fire safety issues, with hard market conditions and increasingly broad policy exclusions contributing to a rise in coverage disputes. The Building Safety Act 2022 introduces extended limitation periods and new causes of action to help facilitate remediation of defective buildings.<\/p>\n<p>The industry also benefited from the judgment in the landmark case of Sky UK Limited &amp; Mace Limited v Riverstone Managing Agency Ltd [2025], which confirmed that deterioration and developmental damage occurring after the policy period, but stemming from damage during it, was covered under the CAR policy.<\/p>\n<p>Cyber-attacks, ransomware incidents and data breaches have become increasingly common. The emergence of model cyber war exclusion clauses caused controversy in the London market amid concerns over clarity on the scope of coverage, given the inherent complexities in attributing responsibility for such events. The issue of when fines and penalties are uninsurable as a matter of law on public policy grounds is ripe for clarification from the courts, particularly as regards GDPR breaches.<\/p>\n<p>The conflict in Ukraine has led to many claims under contingent and possessed policies in respect of alleged loss of aircraft leased to Russian airlines. The group of cases was heard in the Commercial Court, with the judgment handed down in June 2025. The matter, dubbed the \u201cmega trial\u201d, resulted in the largest-ever insurance award by the UK courts, exceeding \u00a3809 million.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Where in your opinion are the biggest growth areas within the insurance disputes sector? \u202f<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p><strong>Cyber, Technology and AI Driven Disputes<\/strong><\/p>\n<p>Cyber-related claims remain one of the fastest-growing categories of insurance litigation. The increased frequency and sophistication of cyber-attacks, coupled with the inherent difficulty of attributing responsibility, are fuelling disputes under cyber, crime, property damage and business interruption policies.<\/p>\n<p>The advent of generative AI brings new risks, requiring insurers to address challenges such as algorithmic bias, data privacy, and regulatory scrutiny, while implementing strong governance to ensure ethical use and compliance.<\/p>\n<p>Further, insurers must implement robust governance to ensure ethical use and compliance, and questions could also arise over whether a business that is heavily reliant on AI to produce its work product should disclose that fact to its insurer. An issue could also arise regarding whether the use of AI could trigger certain cyber-related exclusions in insurance policies.<\/p>\n<p><strong>Climate Change, ESG and Environmental Liability<\/strong><\/p>\n<p>Climate-related litigation continues to escalate globally, with knock-on effects for insurance disputes. Regulatory scrutiny of corporate climate strategies and environmental disclosures is intensifying, driving claims across D&amp;O, professional indemnity, environmental liability, and property damage.<br \/>\nAs extreme weather events become more frequent and severe, policyholders are increasingly testing the limits of catastrophe cover, aggregation provisions, and sub-limits.<\/p>\n<p><strong>Construction, Fire Safety and Latent Defects<\/strong><\/p>\n<p>Disputes arising from fire safety issues, cladding defects, structural failures and regulatory changes in the built environment sector remain a major growth area. Claims under latent defects policies, professional indemnity cover for construction professionals, and disputes under the Building Safety Act continue to rise. These claims often involve multiple insureds, overlapping policy types and complex questions of policy triggers, causation and accrual, making them particularly fertile ground for litigation.<\/p>\n<p><strong>Geopolitical and War Related Risks<\/strong><\/p>\n<p>International instability has led to significant volumes of high-value cross-border disputes. Russian aviation losses have already generated some of the largest insurance claims the UK courts have seen, raising complex issues of causation, interpretation and aggregation. As geopolitical risks continue to grow, whether through sanctions, expropriation, political violence, or supply chain disruption, insurers and policyholders can expect sustained contention over the scope of war risks, political risk, trade credit, and contingent business interruption coverage.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\r\n<div class=\"word-count-hidden\" style=\"display:none;\">Estimated word count: <span class=\"word-count\">3641<\/span><\/div>\r\n\r\n\t\t\t<\/ol>\r\n\r\n<script type=\"text\/javascript\" src=\"\/wp-content\/themes\/twentyseventeen\/src\/jquery\/components\/filter-guides.js\" async><\/script><\/div>"}},"_links":{"self":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide\/128328","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide"}],"about":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/types\/comparative_guide"}],"wp:attachment":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/media?parent=128328"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}