16 December, 2017
(1) When does the limitation period start to run for insurance contract?
The six year limitation period starts to run from the date on which the cause of action accrued. For property insurance policies, this will be the date of the insured event. For liability policies, this will be the date when the liability of the insured is ascertained by judgment, award or settlement.
(2) When does the limitation period start to run for reinsurance contracts?
The six year limitation period starts to run from the date when the liability of the reinsured is ascertained by judgment, award or settlement. It does not matter when the reinsured makes actual payment.
(3) Can the limitation period be suspended and/or interrupted, and if so, how?
Yes. Time will start to run again if there is a written acknowledgment of the cause of action or part payment. Waiver and estoppel arguments can also be raised.
(4) Can the express terms of the insurance policy and/or reinsurance contract have the effect of altering the start date for the limitation period?
The parties can agree to alter limitation by contractual terms. However, if the alteration has the effect of shortening the limitation period, that clause will be construed in the same way as an exclusion clause (and the contra proferentem rule will apply).
For further information, please contact:
Ik Wei leads, Partner / Managing Director, Asia, Clyde & Co
ikwei.chong@clydeco.com
