Handling Insurance Disputes - Internal Reviews / External Reviews

Insurance disputes happen for many different reasons and under all kinds of policies but typically involve a different set of expectations (or even understanding) on the part of the insured and/or insurer about what was and what was not covered. In many instances (but not all) an insurer has some form of Internal Dispute Resolution (IDR) process in place to manage such disputes where the disputes may sometimes (but not always) be escalated to an External Dispute Resolution (EDR) with the Financial Ombudsman Service (FOS).

How an insured / insurer prepares the IDR is something that has the potential to make a real difference in respect of the length of the dispute, its cost and ultimate outcome. In many instances the lack of formality at the IDR stage causes the request for a review of a claim or its response to lack the rigour that is required to put a particular case firmly and in a positive light. Regardless of whether you are an insured, or an insurer Bannermans has experience in the preparation of IDR documentation if this is something you would rather not do yourself.

Some disputes simply do not resolve at the IDR stage and where that happens there may be a right to seek an EDR from FOS. To obtain such a review the insured would lodge a dispute with FOS and the insurer would prepare a notice of response. By having your paperwork meticulously and professionally prepared there is an even greater chance that all relevant facts will be identified, correctly emphasised and key policy terms will be identified. Given that there are often tight timelines, such as 15 day periods, for preparing a response or further response considerable advantages may flow from having these documents prepared by lawyers to minimise the amount of disruption to your work, life and/or business.

Some of the elements of a well drafted IDR/EDR include:-

  • A clear and logical chronology
  • Reliance on the correct policy, and key policy terms
  • Careful application of the facts to the policy wording
  • If the matter is governed by case law / statute law refer to it
  • Expert evidence, where appropriate, can be very persuasive
  • State the outcome desired and why it follows

Note: FOS has extensive information published on its website at www.fos.org.au which may be helpful.

***The information contained in this article is general information only and not legal advice. The currency, accuracy and completeness of this article (and its contents) should be checked by obtaining independent legal advice before you take any action or otherwise rely upon its contents in any way.


Prepared by Bannermans Lawyers

11 February 2014

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For more information on this topic or any legal enquiries please contact your Insurance Team.



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