According to BBC News (Small firms thrown lifeline in insurance test case ruling), a host of businesses were shuttered during lockdown, and many sought claims to cover their losses. Several insurers disputed these claims, maintaining that policies were never intended to cover such “unprecedented restrictions.”
The case—which had the potential to affect 370,000 businesses—was brought before the Financial Conduct Authority. These businesses, many of them small, have been thrown a helping hand after the court ruled the insurers should have paid out for these losses.
This landmark ruling could be great news for the policyholders anxiously awaiting their payout. Although many insurers may pay less than anticipated—or perhaps nothing at all—this ruling could be costly indeed. Whatever the outcome, this case underscores an important point: Insurers must gain deep insight into their agreements to understand what language and clauses they contain. Otherwise:
- Cases like these will continue to arise.
- Insurers will waste a lot of time and money arguing in court.
- Without the means to quickly identify contractual risk, insurers can’t pre-emptively repaper their contracts and renegotiate terms.
First, your organization must be able to locate all contracts across systems, repositories, and fileshares. Next, you must have complete and unrestricted access to the critical data—dates, names, clauses, etc., which are often locked or hidden within contracts—in order to answer critical business questions. For many insurers, particularly those with a long history and legacy content, that could mean leafing through thousands or millions of agreements by hand, an impossible and futile chore when time is of the essence.
Whether you need to cancel or modify agreements, shift supply lines, adjust terms, add amendments, or repaper contracts entirely, completing these tasks manually is a serious administrative undertaking. Contract Analytics technology can help ease this burden.
With regulatory changes mounting, and the volume and complexity of agreements only increasing, there’s a heavy weight on business leaders’ shoulders. By putting Contract Analytics technology to work, you can quickly gain deep insight into your agreements when—and before—the need arises. So you can get back to a place of strength and certainty for your community, your customers, and your team.