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Member, Beacon International Group, Ltd.
BRIGHTON, England — Nonpayment or delayed payment of claims is a top concern for U.K. risk managers, according to a study by risk manager association Airmic Ltd.
The survey of 129 members released Tuesday found that claims-related issues are among risk managers’ most pressing concerns.
More than half — 52.6% — of risk managers cited innocent nondisclosure of material information among their top five most pressing concerns, according to the survey presented at the association’s annual conference in Brighton, England.
Some 42.7% cited delayed claim payments as a top concern, while 30.7% cited difficulties in handling large claims.
One-third of respondents cited the use of warranties and basis contract clauses as a top five concern.
Under English law, what is known as a basis clause enables an insurer to avoid a claim if there is any incorrect information in either the proposal form or policy wording — even when that misinformation has no material bearing on the claim.
At the conference Tuesday, Airmic launched a guide for its members on basis clauses and published an endorsement, developed with London-based law firm Herbert Smith Freehills L.L.P., that negates any basis clauses currently in use.
The survey showed that 27.2% of risk managers believe the inappropriate use of a reservation-of-rights clause, which enables insurers to reserve the right to refuse liability for a claim or part of a claim pending further investigation, as a major concern.
And 23.7% of risk managers cited an increase in the cost of handling claims as a top five concern.