INTRODUCTION Contributed by: Emma Ager, Clyde & Co LLP
Whether the dispute concerns cyber incidents, cli- mate-related losses, supply-chain disruption, pro- fessional liability or geopolitical events, contributors repeatedly emphasise that outcomes are increas- ingly determined by the precise language used within policies. Several jurisdictions report growing disputes concerning exclusions, endorsements, sub-limits and the interaction between multiple policy provisions. Aggregation has become one of the most commer- cially significant areas of insurance litigation. The issue arises repeatedly across multiple classes of business, including cyber insurance, professional indemnity, D&O liability, casualty claims, construction disputes and catastrophe losses and has real world impact on the value of claims. As risks become more interconnected, aggregation disputes are likely to become even more important. Systemic cyber incidents, widespread technology failures, supply-chain disruptions and climate-related losses all have the potential to generate large numbers of related claims arising from a common underlying cause. Claims Handling and Regulatory Intervention Another recurring theme is the increasing scrutiny of insurer conduct and claims handling. Several jurisdictions have reported growing judicial and regulatory interest in the manner in which insurers investigate, evaluate and resolve claims. In many juris- dictions, disputes are no longer confined to questions of coverage. Policyholders increasingly challenge the claims process itself, including delays, requests for information, communication failures and decision- making practices. In the UK, for example, the introduction of Section 13A of the Insurance Act 2015 continues to influence mar- ket behaviour by exposing insurers to potential liabil- ity for failing to pay valid claims within a reasonable time. Similar developments are evident elsewhere. For example, the UAE and Oman appear to be potentially moving towards the introduction of reforms designed to improve transparency and claims-handling stand- ards.
Belgium introduced legislation in 2024 requiring non- marine insurers to respond to claims within three months and to pay within 30 days after settling a claim. Financial penalties can be imposed in the event of a breach. In the USA, contributors refer to the availability of “bad-faith” remedies in insurance litigation, which is determined at state level. A growing number of states have enacted laws creating additional penal- ties such as damage multipliers, recovery of legal fees and interest rates of up to 18% for insurers who have unreasonably delayed or denied payment. Regulators are also focusing increasingly on opera- tional resilience, cybersecurity, consumer protec- tion and governance. Growing regulatory attention to operational controls, technology governance and customer outcomes are being reported across multi- ple jurisdictions. These developments are influencing both underwriting practices and litigation strategy. Looking Ahead The jurisdictions represented in this guide vary consid- erably in terms of legal systems, regulatory structures and market maturity. Nevertheless, there is remark- able consistency in some of the challenges they face. Technology, artificial intelligence and digital infrastruc- ture are likely to remain dominant sources of future disputes. Climate change and ESG obligations are also likely to continue to influence underwriting, gov- ernance and claims. Geopolitical instability, sanctions and supply-chain disruption are expected to remain persistent features of the risk landscape, at least in the short-term. At the same time, courts and regulators are placing increasing emphasis on policy wording, aggregation, claims handling and insurer conduct. Against this backdrop, insurers, policyholders and their advisers are devoting greater attention to policy drafting, programme design and risk allocation before losses occur. Whilst many of the issues raised in this year’s report reflect concerns which have been raised in previous editions, the coming years are likely to see further evolution as legal frameworks strive to adapt to an increasingly complex risk environment.
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I NSURANCE L I T IGATI O N 2026
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