Insurance Act 2015 · s.13A
Insurance Act 2015 s.13A — the reasonable-grounds defence
Reviewed by Matthew Bartlett, Director, Apex Insurance Brokers Limited · Published 15 July 2026
The Insurance Act 2015 s.13A creates a right to damages for late payment of insurance claims. But insurers can defend by showing 'reasonable grounds to dispute' — and often do.
What s.13A gives claimants
Right to damages for late payment of an insured claim.
Applies where the insurer paid the claim but did so late.
Damages compensate for consequential loss suffered as a result of the delay.
The reasonable-grounds defence
Insurer has 'reasonable grounds to dispute' the claim.
Insurer conducted investigations at a reasonable pace.
The insurer's conduct during the dispute was reasonable in all the circumstances.
Burden of proof is on the insurer.
How courts assess reasonableness
- Was the dispute genuine or a delay tactic?
- Did the insurer gather evidence at a reasonable pace?
- Were the insurer's decisions consistent with policy wording and prior conduct?
- Were there legitimate coverage or quantum questions?
- Did the insurer communicate the dispute basis in writing?
For professional firms
- Document delays and their business impact contemporaneously.
- Preserve all correspondence with the insurer.
- Escalate through the broker where delays exceed reasonable expectations.
- Consider FOS or complaints where the delay is unreasonable.
Frequently asked
Is s.13A frequently applied?
Less frequently than expected — the reasonable-grounds defence is often successful for insurers.
What's the time frame for a s.13A claim?
The claim runs from the point delay becomes unreasonable, typically longer than 12 months from notification.
Does s.13A apply to PI claims?
Yes — s.13A applies across UK insurance including PI. Late payment on a settled PI claim can attract damages.
What kind of damages are recoverable?
Consequential loss caused by the delay — typically loss of business, financing costs, or professional fees for pursuing the delay.
Can the insurer contract out of s.13A?
For commercial policies, yes — the Act permits contracting out for non-consumer insurance. Read the policy wording carefully.
How does this interact with FOS?
FOS jurisdiction excludes commercial customers over the threshold. Court is the route for material s.13A claims.
Related
- Insurance Act 2015 fair presentation deep-dive
- PI claim process step by step
- Coverage disputes UK PI insurance
Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Firm reference number 724952. Registered in England and Wales, company number 07014570.