INDIA Law and Practice Contributed by: Neeraj Tuli, Rajat Taimni, Amrit Singh and Anuj Bahukhandi, Tuli & Co
Tuli & Co 14B Max Towers Sector 16B Noida Uttar Pradesh 201301 India Tel: (+91) 120 693 4000 Email: neeraj.tuli@tuli.co.in Web: www.tuli.co.in
1. Key Drivers and Resolution of Insurance Disputes
towards more complex liability and financial-lines dis- putes, although claims handling and coverage inter- pretation continue to account for a substantial propor- tion of insurance disputes. 1.2 Role of Policy Wording and Drafting Policy wording and drafting issues remain a significant source of insurance disputes. Exclusion clauses and their interpretation are a par- ticularly common source of contention, especially where the scope of an exclusion overlaps with the insured peril. Disputes also frequently concern war- ranties, conditions precedent, notification require- ments, disclosure obligations, deductibles, sub-limits and endorsements. We have also seen a significant number of disputes concerning the arbitrability of disputes arising under “quantum-only” arbitration clauses, particularly where the insurer has admitted part of the liability, or the claim has otherwise been settled or discharged. Such disputes commonly turn on whether the arbitration clause extends only to the determination of quantum or also permits arbitration of questions concerning liability and the existence or extent of the insurer’s underlying obligation. 1.3 Dispute Resolution Strategy and Outcomes In practice, the approach adopted by insurers and insureds depends substantially on the nature of the dispute. Where the dispute is principally one of
1.1 Common Triggers of Insurance Disputes The most frequent causes of insurance disputes in India remain disputes in coverage interpretation. While there are issues pertaining to claims handling and issues arising out of ambiguity of insurance clauses, these are few and far between. Courts have consist- ently emphasised that an insurance policy must be construed according to its terms and that Courts cannot rewrite the contract between the parties. In Sohom Shipping Pvt Ltd v New India Assurance Co Ltd 2025 INSC 453, the Supreme Court reaffirmed that policy terms should be given their ordinary and natural meaning, and that contra proferentem applies only where genuine ambiguity remains after applying ordinary principles of interpretation. The principal areas of insurance disputes include motor, health, life, fire and property insurance, which generate the bulk of the claims. At the same time, there has been increasing activity in professional indemnity (PI), directors’ and officers’ liability (D&O), cyber, aviation and other financial-lines insurance, where disputes tend to be higher-value and more technically complex. The growth of these has brought greater focus on issues such as causation, exclusions, aggregation and the scope of cover. There has therefore been a gradual shift from pre- dominantly traditional coverage and claims disputes
149 I NSURANCE L I T IGATI O N 2026
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