“Reasonableness” of late payment and “insurable interest”: the court clarifies a couple of bugbears

The first reported judgment considering whether insurers are liable to pay damages for late payment of an indemnity was handed down recently. The case of Quadra Commodities S.A. v XL Insurance and others [2022] EWHC 431 (Comm) considered key issues relating to both insurable interest, and the application of S.13A Insurance Act 2015. The judgment provides some clarity on what constitutes a ‘reasonable time’ for insurers to pay a claim under S.13A(1), and considers when insurers can rely on S.13A(4) to negate their liability for delayed payment.