Common Mistakes in Insurance Coverage Disputes

May 4, 2023

When it comes to insurance, the hope is you’ll never have to actually use it. After all, insurance is there to protect you should the worst happen and you need some support. But if you do find yourself needing to claim, you’ll want to do all you can to improve your chances of your claim being accepted. It’s all too easy to misread the small print or forget to declare a medical condition on your policy, which can jeopardise your insurer paying out when you need it most.

Here, we’ll cover some common mistakes in insurance coverage disputes, so you can avoid your claim being rejected.

1. Misunderstanding insurance policy terms and limitations

Insurance documents can include a lot of jargon and insurance policy terms that can be tricky to get your head around. Not knowing the ins and outs of your policy can cause you to misinterpret your policy limits, leaving you thinking you’re covered for something that you’re not. 

Here, we’ll explore some key insurance policy terms so you can have a clear idea of what you’re covered for:

Employer’s liability insurance:

This is a type of insurance that protects you as an employer, should a claim be brought against you due to injury or damage caused to an employee while working for your business. It’s a legal requirement to have employer’s liability insurance for any business that employs one or more people, and can only be provided by an authorised insurer.

Public liability insurance:

There to protect your business should a member of the public want to bring civil action against you for injury or damage caused in connection with your business activities. It’s not a legal requirement to have this type of insurance but if you don’t have it you’ll need to pay for compensation and legal fees should a claim be brought against you.


The amount paid for the insurance. This amount may increase over time depending on your level of risk, so be sure to check it when it renews each year.

Pre-existing medical condition:

Be sure to inform your insurer of any medical conditions you currently live with or have previously had (usually in the last two years) – these are known as pre-existing conditions. For travel insurance, your insurer should cover you for these conditions as long as you declare them when you take out your policy. If you forget to declare your medical condition, then need to claim for an incident related to it, you won’t be covered.


Breach of the expected duty of care that is expected of the ‘reasonable person’.


This means you’re personally and legally responsible for something.


A sum of money paid as compensation for the loss of something. For example, if there’s an indemnity limit of £200,000 on your policy, compensation would be paid up to that amount.

2. Providing incomplete or inaccurate information to your insurer

Another mistake that can cause insurance coverage disputes is inaccurate information on your policy, which can lead to your insurer not paying out for your claim.

Hundreds of complaints are made to the Financial Ombudsman Service (FOS) every year due to people not being satisfied with how their insurer has dealt with their claim, where not being fully insured was the reason. Often, this is because the insured has missed out key information about themselves when taking out their insurance, so when they’ve gone to claim, they’re not covered.

With this in mind, it’s important that you answer all questions correctly when taking out your insurance. If you fail to do so, you may find you’re underinsured, whereby the level of insurance you have isn’t enough (so you have to pay the difference when you claim). Or your claim will simply be rejected.

3. Failing to seek legal advice in the dispute process

Having your insurer refuse to accept your claim can leave you feeling frustrated and unsure where to turn. Perhaps your insurer has rejected your claim, refused to pay you what your claim is worth or hasn’t been clear on why you’re not covered. In this instance, it’s important you seek legal advice early on in the dispute process to guide you in the right direction. Legal representatives can look at the small print for you, advise you on the next steps to take, help you make a formal complaint to the Ombudsman and if necessary, take legal action on your behalf.

Ready to protect your business?

As a business owner, your small business isn’t just your source of income, it’s also your pride and joy, so you’ll want to make sure it’s protected against the unexpected. Get a quote for small business insurance with Protectivity today for the peace of mind you deserve.