Prescription vs Time-Bar Clauses: When Delay Defeats An Insurance Claim

When an insured party waits too long to enforce a claim, time itself can become a complete defence. In South African insurance law, two separate but related principles may prevent an insured from recovering – prescription and time-bar clauses. While both deal with the lapse of time, they arise from different sources and operate independently.

Prescription: "The Statutory Limitation"

Prescription is governed by the Prescription Act 68 of 1969. It extinguishes a debt after the prescribed period has passed – usually three years, unless legislation provides otherwise. Once a debt has prescribed, the legal obligation to pay it no longer exists, and the debtor (such as an insurer) may raise prescription as a complete defence.