Art. 16 · Where the premium goes · 3 min read

Will you actually get paid?

A policy is a promise about the future. The probability that the promise is kept, and how long keeping it takes, are part of what you are buying, and almost nobody prices them.

Buying cover feels binary: insured or not. Making a claim is not binary at all. A claim can be paid in full, reduced, disputed for months, or declined. For a business with a payroll to meet, a claim paid slowly can be nearly as damaging as one not paid at all.

The clearest recent illustration in the UK was business interruption during the pandemic. Wordings that businesses believed covered them turned out to be genuinely ambiguous, the question went to the Supreme Court in a test case brought by the regulator, and only after that did large numbers of claims get paid. Most accepted claims were ultimately settled, but "ultimately" was, for many, more than a year of not knowing.

Editorial note before publishing: the FCA published tracking data on the volume and value of these claims. Cite the current published figure rather than a remembered one, and link the source.

Four things move the odds, and three of them are within your control:

Wording clarity. Ambiguity gets resolved slowly and expensively. A broad-sounding extension with vague triggers is worth less than a narrow one you can point at.

Evidence. Claims are decided on records. Photographs, maintenance logs, inventories, contracts, the dated compliance trail from Article 11.

Your broker's appetite. The difference between a broker who submits a claim and one who advocates for it is substantial, and it is the main thing you are paying commission for.

The insurer. Claims-handling reputation varies. It is a fair question to ask before placing, and a fair reason to pay slightly more.