COLOMBIA Law and Practice Contributed by: Rebeca Herrera Diaz, Rebeca Herrera Abogados
insurers sometimes include the term “condition prec- edent” in policy wording, but judges often struggle to determine whether such provisions should be treated as warranties. However, because warranties must be explicitly stated in the policy or an ancillary docu- ment, conditions precedent should not automatically be considered warranties. Consequently, the term “condition precedent” in an insurance policy might be considered ambigu- ous under Colombian law. If so, it will be interpreted against the insurer. 9. Insurance Disputes 9.1 Insurance Disputes Over Coverage In Colombia, disputes over insurance coverage are usually handled by the courts. This is because the use of arbitration in insurance contracts, which are considered consumer contracts, is legally ambigu- ous. In general terms, the insured and the benefi- ciary are considered financial consumers and, thus, have the right to exercise the consumer protection action ( acción de protección del consumidor financi - ero ) against the insurer that denies coverage. In these cases, Article 57 of Law 1480 of 2011 empowers the SFC to resolve disputes between supervised financial institutions and financial consumers. While this action specifically protects consumer rights, insured parties also retain the right to pursue standard contractual actions against insurers through the ordinary courts. Another avenue available to consumers is the Finan- cial Ombudsman ( Defensor del Consumidor Financi - ero ). The insurance company must hire an independ- ent lawyer to protect the insured’s interests. It must have conciliation certificates to undertake this kind of alternative dispute resolution mechanism. Articles 13 to 21 of Law 1328 of 2009 address the duties and responsibilities of the Financial Ombudsman. Disputes concerning reinsurance agreements are pre- dominantly resolved through arbitration, as this is the standard dispute resolution method for these types of contracts. The SFC has no jurisdiction to act as a judge, arbitration panel, or centre in these disputes.
Regarding arbitration, on 28 August 2025, Law 2540 of 2025 was enacted to regulate executive arbitration. Under this new law, arbitration panels in Colombia are authorised to enforce judicial decisions related to contracts, including the arbitration clause and the executive arbitration clause for resolving dis- putes arising from them. Accordingly, this law raises the question of whether, where an insurance policy includes both the arbitration clause and the executive arbitration clause, and the insurer does not respond to the claim within one month after notification, the insured can invoke an executive arbitration panel to obtain payment of the claimed indemnity under Article 1080 of the C.Com. This is because the insurance policy becomes an executive instrument ( instrumento ejecutivo ), functioning as a security ( título valor ), if the insurer provides no response to a proper claim within one month of its notification, under number 3 of Article 1053 of the C.Com. This law enters into force on 27 February 2026. The limitation period for starting proceedings con- cerning an insurance claim is two years from the moment the insured becomes, or reasonably should have become, aware of the loss. According to Article 94 of the General Procedure Law (CGP), this period can be extended if, within those initial two years, the insured makes a claim against the insurer specifically referencing Article 94 of the CGP. There is a special regime for beneficiaries under the insurance contract who, at the moment of the loss, were not legally able to make a claim or be aware of the loss. In such cases, the limitation period is five years from the date of the loss. Only under third-party liability insurance policies, such as general liability, D&O, E&O, or professional indem- nity insurance, can an unnamed beneficiary or other third party enforce an insurance contract. 9.2 Insurance Disputes Over Jurisdiction and Choice of Law In Colombia, the regulation of international insurance contracts and the applicable law is primarily governed by Article 869 of the Commercial Code. This article addresses the law applicable to contracts executed abroad for performance in Colombia. The text of Arti- cle 869 is as follows: “Contracts entered into abroad
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