The Assured's Remedies for Late Payment in Indemnity Insurance Claims

Abstract

It is well known that in English law the indemnity insurers stand in a better position than the assureds and this is especially true when a claim is delayed: in that scenario, the insurer is neither liable for the damage caused by the late payment, nor for the compound interest. In Sprung v. Royal Insurance ([1999] 1 Lloyd's Rep IR 111) this unfair situation was justified by the Court of Appeal, naturally, it brought an opportunity for the Law Commission to reconsider the law. Recently, the new Insurance Act 2015 has been enacted and subsequently amended by the Enterprise Act 2016 in regards to the insurer’s obligation to make a timely payment; however, the legal effect of the new legislation is unknown due to the lack of binding precedents. In this work, the duty of the indemnity insurer shall be discussed in full and this work will try to make a contribution to the interpretation of the new legislation regarding to the obligation of the insurer and remedies for the assured.