UK Law and Practice Contributed by: Daniel Robin and Chloe Franklin, SDV Fenchurch
continue to arise where losses sit at the boundary between cyber and non-cyber cover. Another developing area concerns the interaction between cyber coverage and geopolitical risk. As cyber-attacks become increasingly sophisticated and concerns regarding state-sponsored activity continue to grow, disputes regarding war exclusions, attribution and causation are becoming increasingly prominent. Establishing who was responsible for a cyber-event and whether it falls within a war or hostile acts exclu- sion remains a significant evidential and legal chal- lenge. 4.4 Aggregation and Limits of Liability Aggregation continues to generate some of the most commercially significant coverage disputes in the English market. Although aggregation arguments have existed for decades, the issue has become increas- ingly important as losses have become larger, more complex and more systemic in nature. The practical importance of aggregation lies in its potential impact on available indemnity. Characteris- ing multiple losses as a single claim may result in one limit and one deductible applying, whereas treating losses separately may give rise to multiple limits and deductibles. Consequently, aggregation disputes fre- quently determine the overall value of the claim. English courts continue to emphasise that aggrega- tion is fundamentally a wording exercise. Much will depend upon the specific unifying factor selected by the parties, whether that be an event, occurrence, originating cause or series of related acts or omis- sions. Although the authorities provide guidance, the outcome remains highly dependent on both the word- ing and the factual circumstances of the particular loss. Recent systemic losses have reinforced the impor- tance of careful aggregation drafting. Cyber-incidents, professional negligence claims, building safety dis- putes and mass claims arising from common underly- ing causes have all highlighted how different aggre- gation formulations can materially alter the extent of coverage. As a result, both insurers and policyholders
are placing increasing attention on aggregation claus- es during policy placement and renewal negotiations. 4.5 Sanctions and Illegality Issues Sanctions have become an increasingly important feature of insurance litigation, particularly following geopolitical developments over the past several years. Whilst sanctions issues have traditionally been most relevant to marine, aviation and political risk business, their impact is now being felt across a much wider range of insurance products. Coverage disputes commonly arise in relation to whether claims can lawfully be adjusted or paid, whether sanctions exclusions apply and whether insurers are entitled to withhold payment whilst sanc- tions-related investigations are undertaken. These issues can be particularly difficult where sanctions regimes evolve during the life of a claim or where mul- tiple jurisdictions impose overlapping obligations on insurers and reinsurers. A further challenge is the interaction between sanc- tions compliance and claims handling obligations. Policyholders frequently argue that insurers are using sanctions issues as a basis for delaying claims, whilst insurers must ensure that any payment does not expose them to regulatory or criminal liability. This creates a potentially difficult balancing exercise, par- ticularly where payment chains involve international banks, reinsurers and counterparties operating across multiple jurisdictions. 4.6 Late Payment and Claims Handling Practices Claims handling practices continue to attract signifi- cant scrutiny. Since the introduction of Section 13A of the Insurance Act 2015, insurers have faced greater exposure where claims are not paid within a reason- able time. As a result, disputes increasingly focus not only on coverage itself but also on the manner in which claims have been investigated and adjusted. Whilst the legislation recognises that insurers are entitled to investigate claims and dispute genuinely arguable cases, policyholders are increasingly willing to examine the conduct of the claims process itself. Issues frequently arise regarding the length of investi-
253 I NSURANCE L I T IGATI O N 2026
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