The Duties of Insurers - Collecting Premiums

(Weldon v GRE Linked Life Assurance Ltd, April 2000, forthcoming in [2001] Lloyd’s Rep IR)

The significance of timely payment of the premiums for an insurance policy vary, depending upon the terms of the policy itself. If there is no contractual provision, then the common law indicates that time is not of the essence and the assured need not make payment until he has received a demand from insurers demanding payment within a specified period. Generally, however, the matter is expressly governed by the contract, and these days – at least in domestic lines insurance – insurers require upfront payment or at least payment by direct debit. The problem which arose in Weldon v GRE Linked Life Assurance Ltd, April 2000, forthcoming in [2001] Lloyd’s Rep IR, was that the assured had complied with the insurers’ demands for the completion of a direct debit mandate but that the insurers were themselves guilty of failing to implement it, leaving premiums unpaid. The case was decided on assumed facts.