Category: Loss adjusting · Reviewed by Al Jabbar, Broker · Specialist Risks · Last reviewed 2026-06-11
A loss adjuster is an independent claims professional, usually appointed and paid by an insurer, who investigates the circumstances of an insurance claim, quantifies the loss and recommends or negotiates a settlement under the policy.
Category: Loss adjusting Also known as: Adjuster, Claims adjuster, Insurance loss adjuster Related concepts: Chartered Institute of Loss Adjusters (CILA), Loss assessor, ICOBS 8, Claims handling
A loss adjuster is a specialist claims professional engaged by an insurance company to investigate insurance claims on its behalf, establish what has happened, assess the value of the loss and advise on whether (and on what terms) the claim is payable under the relevant policy. In the United Kingdom, loss adjusters typically operate either as employees of independent adjusting firms instructed on a case-by-case basis, as members of an insurer’s panel of approved adjusters, or, less commonly, as in-house employees of an insurance company.
Although loss adjusters are appointed and remunerated by insurers, the professional ethos of the role — codified by the Chartered Institute of Loss Adjusters (CILA) — requires the adjuster to act impartially as between insurer and insured, gathering evidence, applying the policy wording objectively and recommending a settlement that reflects the policyholder’s true entitlement. This duty of fairness, sometimes called the “tripartite” obligation, distinguishes the loss adjuster from a pure insurer’s advocate and from a loss assessor, who is contractually retained by the policyholder.
Loss adjusters in the UK handle claims across virtually all classes of general insurance, including property (domestic and commercial), business interruption, liability (employers’, public and products), motor, marine, aviation, agricultural, fine art, contract works and energy. Specialisms have developed in line with market complexity: some adjusters focus solely on major and complex losses, others on volume household claims through delegated authority schemes, and others on forensic accounting, fire investigation or surge response after catastrophes such as the 2007 and 2015 floods or Storm Arwen in 2021.
The role typically combines technical knowledge of policy wordings, building or engineering principles, accounting and law with practical skills in site investigation, negotiation, project management and report writing. A loss adjuster’s written report to insurers is often the principal document on which the indemnity decision rests.
There is no single Act of Parliament that establishes the loss adjuster’s role; rather, the legal and regulatory framework arises from a combination of contract law, professional regulation and the rules of the Financial Conduct Authority (FCA).
When an insurer instructs a loss adjuster, a contract for services is created between insurer and adjuster (or the adjuster’s firm). The adjuster owes contractual duties of skill and care to the insurer under that retainer and, by way of statute, an implied term of reasonable skill and care under section 49 of the Consumer Rights Act 2015 (where applicable) or section 13 of the Supply of Goods and Services Act 1982 in business-to-business contexts. The adjuster does not generally owe contractual duties to the policyholder, but case law has explored whether a duty of care may arise in tort. In Brown v GIO Insurance Ltd [1998] CLC 650, the Court of Appeal considered the relationship between insurer, adjuster and insured and emphasised the impartial role expected of the adjuster.
Where loss adjusters carry on activities that are themselves regulated — for example, where they have delegated authority to settle claims on behalf of an insurer — they fall within the scope of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (RAO). Article 39A of the RAO defines “assisting in the administration and performance of a contract of insurance” as a regulated activity. Many adjusting firms are therefore authorised by the FCA in their own right or operate as appointed representatives under section 39 of the Financial Services and Markets Act 2000.
The FCA’s Insurance Conduct of Business Sourcebook (ICOBS), particularly ICOBS 8.1, sets out claims-handling rules requiring insurers and their agents to handle claims promptly and fairly, to provide reasonable guidance to help a policyholder make a claim, and not to unreasonably reject a claim. These obligations apply to loss adjusters acting on behalf of insurers in scope. The FCA Principles for Businesses — Principle 6 (treating customers fairly) and Principle 8 (managing conflicts) — are also engaged.
For Lloyd’s market business, the Lloyd’s Claims Scheme governs how claims are instructed, agreed and audited, and Lloyd’s minimum standards for claims (currently MS11) apply to managing agents and their delegated authorities, including instructed adjusters.
A loss adjuster is usually instructed shortly after a claim is notified, either through an automated workflow under a delegated authority scheme or by direct appointment from an insurer’s claims handler. The instruction letter or electronic feed typically sets out the basic claim details, the policy wording, any relevant excesses or limits, and the scope of the adjuster’s authority — for example, full delegated settlement authority up to a financial limit, or report-and-recommend only.
The adjuster’s first task is usually to contact the policyholder, arrange a site visit if appropriate and gather initial evidence. On a domestic property claim this might involve attending the home, inspecting the damage, photographing the affected areas, interviewing the policyholder and obtaining estimates from contractors. On a complex commercial loss it may involve coordinating forensic engineers, fire investigators, accountants, lawyers and surveyors over a period of months or years.
The adjuster will then consider three principal questions: is the loss covered by the policy (the “indemnity” question), what is the correct measure of indemnity (often replacement cost, market value or reinstatement), and are there any breaches of conditions, warranties or duties (such as the fair presentation duty under the Insurance Act 2015) that affect cover? A written report to insurers will record findings on each issue, often with annexed photographs, statements, contractor estimates, plans and accounting schedules.
In a delegated environment the adjuster will agree the settlement directly with the policyholder, arrange interim payments, instruct contractors under the insurer’s supply chain and close the file. In a non-delegated environment the adjuster will recommend a course of action to insurers, who decide. Throughout, the adjuster is expected to keep the policyholder reasonably informed and to comply with the timescales and conduct standards in ICOBS 8.1 and the insurer’s service-level agreement.
Fees are typically charged on a time-and-expense basis or, for volume claims, on a fixed-fee per case. The adjuster’s remuneration is paid by the insurer and forms part of the cost of claims handling rather than the indemnity itself.
Loss adjusters are not a homogeneous group; the profession has developed distinct sub-disciplines reflecting the type of loss and the way insurers structure their claims operations.
Property loss adjusters handle building and contents claims for households, commercial property owners and landlords, dealing with perils such as fire, flood, escape of water, storm, impact, theft and subsidence. Casualty or liability adjusters investigate claims under employers’ liability, public liability, products liability and professional indemnity policies, often working alongside defence solicitors. Marine adjusters deal with hull, cargo and energy losses and may also act as average adjusters under the rules of the Association of Average Adjusters where general average is declared. Aviation adjusters handle aircraft hull, liability and product losses, frequently with an international dimension. Forensic adjusters — sometimes employed by firms such as RGL Forensics or the forensic teams within larger adjusting practices — specialise in the accounting and economic quantification of business interruption, stock loss and fidelity claims.
A further distinction is between independent adjusters, who are instructed on individual claims, and insurer’s panel adjusters, who hold standing arrangements with one or more insurers and may operate under delegated authority. Independence and panel status are not mutually exclusive; large adjusting firms such as Sedgwick (which acquired Cunningham Lindsey in 2018), Crawford & Company, McLarens, Charles Taylor Adjusting and Davies typically operate both panel and instructed work across multiple specialisms.
Adjusters should be distinguished sharply from loss assessors, who are retained by policyholders to present and negotiate claims on their behalf and which, since 2018, fall within the scope of the FCA’s claims management regulation under the Financial Guidance and Claims Act 2018.
A medium-sized engineering firm in the West Midlands suffers a serious fire on a Sunday night, destroying its main production hall, machinery and finished stock. The insurer is notified on Monday morning and, within hours, instructs a Chartered Loss Adjuster from a national firm who specialises in complex commercial property and business interruption losses.
The adjuster attends site on Monday afternoon, meets the managing director and finance director, walks the damaged premises with the fire investigator already on scene, and takes initial witness statements. He confirms that the fire appears to fall within the policy’s “fire” peril and that the sums insured for buildings, plant, stock and business interruption appear adequate on first review. Over the following days he instructs a quantity surveyor to value the building damage, a forensic accountant to model the business interruption claim against the policy’s twelve-month indemnity period, and a salvage agent to assess the damaged machinery.
Within a fortnight the adjuster recommends an interim payment of £250,000 to enable the policyholder to begin temporary trading arrangements, with a further £500,000 paid two months later as the reinstatement project takes shape. The final claim, settled fifteen months after the fire, totals £4.8 million across buildings, machinery, stock and business interruption. The adjuster’s reports — eight in total — form the basis of insurers’ agreement and, ultimately, of the audit trail relied on by the lead underwriter at Lloyd’s.
This entry is part of the Apex Insurance Wiki. Last reviewed by Matt Bartlett on 2026-06-11. Next review: 2026-12-11.
Apex Insurance Brokers Limited. Authorised and regulated by the Financial Conduct Authority, FRN 724952. Registered in England and Wales, Companies House 07014570. This entry provides general information about UK insurance concepts and is not regulated advice. Consult your insurance broker on your specific position.
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