What Is Insurance law?
Insurance law is the field of law that regulates insurance policies, claims, and the companies that issue the policies. Insurance law is also used as a framework for resolving insurance-related disputes.
In addition, insurance law regulates the content, terms, and conditions of insurance policies, in order to protect consumers. For instance, insurance law regulates the circumstances under which an insurer can decline to pay out on a claim. One way it does this is by stipulating that information that is not relevant to a claim cannot be used to invalidate it. Another way that insurance law protects the consumer is that it stipulates that an insurance policy purchase has a minimum 14-day “cooling off” period during which the policy can be cancelled for a full refund.
As there are many different kinds of insurance for both individuals and organisations, insurance law is both a large and a complicated field. Many solicitors who work in insurance law specialise in business or individual insurance, and some even specialise in handling issues relating to particular kinds of insurance policies, or issues relating to insurance in specific industries. Some may work for a particular kind of client; for instance, for individuals, businesses, non-profit or other organisations, insurance brokers, or insurance companies.
Insurance-Related Legal Processes
Employers’ liability insurance
With few exceptions, all UK employers that have at least one employee must purchase at least £5 million in employers’ liability cover, in order to provide workers’ compensation for any employee who is injured at work or who becomes ill as a result of some aspect of their job. Almost all UK businesses must be able to provide workers’ compensation for employees who need it, so for employers, it may be necessary to take legal advice when deciding what coverage level they need.
Disputed insurance claims
The most common issue that arises around the field of insurance law is when an insurance provider declines to pay out on a claim submitted by an individual or a business. Insurers can decline to pay on a claim for a variety of reasons. For instance, a life insurance company might decline on the basis that the insured person failed to disclose a pre-existing health condition, a motor vehicle insurer might pay less than the claimant was expecting due to depreciation, or an insurance provider might decline to pay a claim because they believe the claim is fraudulent.
Alternative methods of dispute resolution
To resolve an insurance-related dispute, the most common course of action is to try and negotiate with the insurance provider, either informally or via a formal method such as mediation or arbitration. These are known as alternative methods of dispute resolution. It’s generally preferable to attempt a resolution with one of these methods before considering court action, as they are less contentious and less costly ways to solve the problem.
Alternative dispute resolution methods don’t necessarily have to involve a solicitor. However, having access to legal advice and advocacy during mediation or arbitration can be the best way of ensuring your best interests are represented, and of giving you the best chance to achieve a favourable resolution.
Informal negotiation is typically the first step in resolving a dispute. This may involve a discussion or an exchange of letters. While this doesn’t necessarily resolve the problem, it does give both parties a chance to make their position clear.
Mediation is a formalised kind of negotiation where the two parties meet with a trained mediator who guides them in discussing the issue to try and come to an agreement. However, since the mediator doesn’t make a legally binding decision, mediation doesn’t necessarily end in a resolution. Mediation is not a preferred method for settling insurance disputes.
Arbitration is similar to the courtroom process, in that an arbitrator listens to evidence from both sides, and makes a legally binding decision. However, as this is a private process, it’s typically preferred over litigation, in situations where other methods have not been successful.
Resolving disputes via litigation
If the dispute can’t be solved via alternative methods such as mediation, the last-resort option is litigation, where you take your claim to court. In insurance litigation, the case is brought to court by a plaintiff who is attempting to recover money from their insurance company, in a situation where the insurance company alleges that the claim is not a legitimate one.
To start the litigation process you or your solicitor will file documents that provide details about the case and your claim. Your case will be assigned a date, time, and place for an initial hearing. At the hearing, you and the insurance company will each have a chance to present evidence, and hear statements from any expert witnesses.
After all the evidence has been heard, the judge will make a decision. The judge may decide that the insurance company is right to decline your claim, or they may find in your favour and order the insurance company to pay your claim. Depending on their decision, the judge may order you or the insurance company to pay all the legal expenses associated with the case.
If you’re not satisfied with the outcome, you may be able to appeal the judge’s decision.
How Can A Solicitor Help?
Law firms that specialise in insurance can provide advice, assistance, and advocacy to individuals, businesses, and organisations, in a variety of ways.
- Provide legal advice and assistance to someone who is attempting to make an insurance claim, including cases where an initial claim has been declined by the insurance provider;
- Investigate the details of an insurance claim to gain a clear picture of the events surrounding the claim;
- Help individuals and organisations resolve insurance-related disputes, via alternative dispute resolution methods or via litigation;
- Provide advice to employers and organisations on risk reduction and compliance for insurance purposes;
- Negotiate insurance terms and conditions for a business or employer;
- Advise employers on matters relating to employers’ liability insurance and workers’ compensation;
- Act as an advocate for the purposes of negotiation and mediation;
- Act as a representative in arbitration and litigation;
- In commercial cases, a solicitor might also be involved with helping a business deal with issues that arise due to a delayed insurance settlement, such cash flow issues or problems with creditors.