The Enterprise Act 2016 received Royal assent on the 4 May 2016 and introduces a number of measures designed to cut red tape, tackling late payment and developing the apprenticeship system in the UK. The act is designed to boost and benefit businesses in the UK.
From an insurance perspective the act ensures that every contract of insurance includes an implied term that an insurer will make payments under a claim within a reasonable time. As always the term “reasonable” is somewhat subjective and is not defined in the act but it does provide examples of factors that will be taken into account when considering what is a reasonable time and these include;
The type of insurance
- The size and complexity of the claim
- factors outside the control of the insurer
- Issues arising through regulatory and statutory compliance.
Under the terms of the act a breach of this implied terms by the insurance company may result in the policyholder being able to claim damages from the insurer.
These changes were expected to be included in the Insurance Act 2015 but the inclusion in Enterprise Act does broaden the responsibilities of insurers that were imposed under the Insurance Act.