Limitation periods for insurance claims

Contractual limitation periods

In the absence of contrary agreement there is, under the Limitation Act 1980, a six-year limitation period for insurance claims, running from the date on which the insured loss occurred. The statutory provisions can be modified by agreement, and a shorter (or indeed longer) period substituted. In Fortisbank SA v Trenwick International Ltd [2005] Lloyd’s Rep IR 464 Elizabeth Gloster J considered the operation of a two-year limitation period in a policy taken out by a bank against certain types of fraud by its customers.The issues were ascertaining the date on which the limitation period had been triggered and, if the claim was out of time, whether the insurers were precluded by their conduct from relying upon their contractual rights.