How insurers and policyholders can avoid costly litigation

The insurance sector faces many challenges, affecting both insurers and policyholders. Disputes often arise over coverage, claims handling, and policy interpretation. Resolving these efficiently is crucial for maintaining trust and avoiding costly litigation. B P Collins’ dispute resolution team considers some common examples below.

1. Ambiguities in policy wording

Insurance policies can be complex, and unclear terms often lead to disputes. Policyholders may believe they have coverage, only to find exclusions apply. Conversely, insurers may struggle to enforce exclusions if wording is vague.

Solutions

• Insurers should ensure clear and precise policy wording.

• Legal teams should review policies regularly to eliminate ambiguity.

• Policyholders should seek legal advice before purchasing complex policies.

2. Delays in claims processing