A claim is a contractual process. This page sets out that process in the order in which it occurs, the deadline attaching to each stage, and a worked example showing how a covered loss resolves under our standard commercial wording.
The eleven stages
- Notification. Required as soon as practicable. The standard is the one applied by the courts of the policy jurisdiction and is assessed at the conclusion of the file in the light of the circumstances then known.
- Acknowledgement and reservation of rights. Issued within five business days. The reservation preserves the defences available under the policy while the claim is investigated. It is not a declinature and should not be read as one.
- Proof of loss. Sworn, itemised and supported by documentation, within 60 days of our request. An incomplete proof of loss is not a proof of loss for the purposes of the condition, and the 60 days do not restart.
- Adjuster appointment. An independent loss adjuster is appointed. The adjuster holds a professional qualification, is independent of the policyholder, is instructed by us and is remunerated by us.
- Examination under oath. Available to us on any claim, at our election, at a time and place we designate. Attendance is a condition precedent to payment.
- Coverage determination. The loss is tested against the schedule of exclusions. Where a loss arises from two causes, one covered and one excluded, the adjuster apportions between them.
- Application of average. Where the sum insured is less than the value at risk at the date of loss, settlement is reduced in the same proportion. This is the coinsurance condition and appears in the first schedule of every commercial policy we write.
- Depreciation. Where cover is written on an indemnity basis, settlement reflects the value of the property immediately before the loss rather than the cost of new.
- Deductible. Applied last, to the figure then remaining.
- Appraisal. Either party may demand it. Each appoints an appraiser, the appraisers appoint an umpire, and the award of any two binds both. The award is final and is not reviewable on the merits.
- Subrogation. Where a third party is responsible we pursue them in the policyholder’s name and at our cost. Recoveries are applied first to our outlay and to the costs of recovery.
A worked settlement
Standard commercial wording, indemnity basis, nine year old asset. Declared sum insured 4,000,000. Reinstatement value at the date of loss, as assessed, 6,400,000. Gross loss 1,000,000. Each line is applied under a term of the policy.
| Stage |
Basis |
Amount |
| Gross loss as claimed |
Assessed by the appointed adjuster |
1,000,000 |
| Average applied |
4,000,000 divided by 6,400,000, that is 62.5 per cent |
625,000 |
| Depreciation |
Nine years at 3 per cent, that is 27 per cent |
456,250 |
| Deductible |
Per policy schedule |
206,250 |
| Excluded cause apportionment |
40 per cent attributed to gradual deterioration |
123,750 |
| Settlement authorised |
Within schedule, file closed as paid |
123,750 |
Policyholders who wish to improve this outcome at the next renewal should review the declared sum insured against current reinstatement cost, since average is applied on the figures in force at the date of loss. Our surveyors will carry out a reinstatement valuation on any commercial risk at no charge.
| Stage |
Days allowed |
| Internal review of the coverage determination |
90 |
| External independent review |
60 |
| Reconsideration on new information |
120 |
| Appointment of the appraisal panel |
45 |
| Panel hearing and award |
120 |
| Total, notification to award |
435 days, that is 14.3 months |
| Contractual limitation period for suit, from date of loss |
365 days |
Independent advice. The review stages above are voluntary, are offered at our own cost, and are generous by market standard. The contractual limitation period for suit is a separate provision, runs from the date of loss rather than from the date of notification, and is set out on the second page of the schedule. Policyholders are advised to take independent legal advice on the limitation period applicable to their policy before electing which review stages to use.</div>
Service commitments
- Acknowledgement within five business days of notification, without exception.
- A named handler for the life of the file. Where a handler leaves, the file is reassigned and reviewed afresh by the incoming handler.
- Interim payments at our discretion on files where liability is not in dispute. Liability is in dispute until the coverage determination has been issued.
- Complaints acknowledged within three business days and answered within eight weeks. A final response letter concludes the internal process and starts the external clock.
- Appeal available at every stage. Appeal outcomes are reported on completion rates. A withdrawn appeal is recorded as completed.
- Reinstatement valuation, at no charge, on any commercial risk at or before renewal.
Claims are the reason the product exists. We employ four hundred and eleven people in claims operations, which is more than in underwriting and distribution combined, and we would ask any prospective policyholder to weigh that figure when comparing our terms.