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Claims

General

What general rules, requirements and procedures govern the filing of insurance claims?

There are no rules, regulations or statutes governing the handling of insurance claims in Bermuda. To the extent required, such procedures are generally set out in the policy.

Time bar

What is the time bar for filing claims?

The time bar for filing claims will not be brought after the expiration of six years from the date on which the cause of action accrued.

Denial of claim

On what grounds can the (re)insurer deny coverage?

Standard grounds for denial of coverage apply, including misrepresentation, non-payment of premiums, exclusion clauses and fraudulent claims.

What rules and procedures govern the insured’s challenge of the denial of a claim?

The normal rules and procedures of the Bermuda courts will apply.

Third-party actions

On what grounds can a third party file a claim directly with the (re)insurer?

If the parties have agreed to opt in to the Contracts (Rights of Third Parties) Act 2016, a third party can enforce the terms of the contract and avail itself to any remedy that would be available to the contracting parties, including those related to breach of contract, damages, injunctions and specific performance.

A third party can also file a claim on the grounds that there was an effective cut-through clause or endorsement in the (re)insurance contract. Such clauses will typically provide the underlying insured with a direct right of action under the corresponding (re)insurance contract entered into between an insurer and a reinsurer, thereby providing further security to the insured by enabling it to cut through to the reinsurer for payment of a claim in the event that the insurer is unable to meet its obligations.

Punitive damages

Are punitive damages insurable?

Yes, punitive damages are insurable.

Subrogation

What regime governs (re)insurers’ subrogation rights?

Bermuda has no statutory subrogation rights and, therefore, the courts will generally look to the terms of the contract and English common law principles to determine whether a (re)insurer can exercise subrogation rights in the name of its insureds to recover monies under (re)insurance policies. 

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