Zagora Management v Zurich Insurance: Timing in Property Insurance Claims

[2019] EWHC 205 (TCC)

Judge considers how long insurer has to consider a property insurance claim

A property insurer was ordered to provide an indemnity under its policy. In this case, the judge considered various costs issues, one of which was the date from which interest should be awarded. The policy in this case was issued before the late payment damages rule came into effect (for policies written on or after 4th May 2017). Nevertheless, the case is of interest because the judge took into account how long the insurer had to investigate the claim (a point which would be relevant to cases in which late payment damages are claimed - since an insurer must pay any sums due in respect of a claim made by the insured "within a reasonable time" (which will include a "reasonable time" to investigate and assess the claim)).

The basic rule is that the insured is entitled to interest from the date it is kept out of money which is due to it (and this is not based on fault or the wrongful withholding of payment by the insurer), but that an insurer is entitled to a reasonable time to investigate the claim (both as regards liability and quantum) (see Kuwait Airways...