Small businesses want the FSA to introduce a time frame for insurers to pay out
Insurers are taking more than 100 days to begin payments to policyholders from the date a claim is made, according to research by the Balcombe Group.
A survey of claims involving SMEs showed the average time for insurer to acceptliability was 58 days from the date of loss, with, on average, another 42 days passing before adjusters agreed to an interim payment. It then takes another 18 days for the payment to reach the claimant.
Balcombe group chairman and chief executive Nicholas Balcombe said the situation for SMEs was "getting worse not better".
He wants the FSA to introduce a 28-day time frame for insurers to accept liability, with another seven-day time frame for payments to be received once liability has been accepted.
A spokesman for the Federation of Small Businesses said there were big implications for the cash flow of small businesses when payments were delayed for long periods.
"Small businesses are not in a position to absorb sudden and drawn-out costs."
Cunningham Lindsey director of technical and product assurance Harry Roberts supported Balcombe's call for quicker claims resolution, but has reservations about the introduction of a regulated deadline.
"I'm not sure that putting a time frame on major loss resolution is practical, and in some cases it can genuinely take six months for liability to be established," he said.
