The most frequent causes of insurance disputes in India remain disputes in coverage interpretation. While there are issues pertaining to claims handling and issues arising out of ambiguity of insurance clauses, these are few and far between. Courts have consistently emphasised that an insurance policy must be construed according to its terms and that Courts cannot rewrite the contract between the parties. In Sohom Shipping Pvt Ltd v New India Assurance Co Ltd 2025 INSC 453, the Supreme Court reaffirmed that policy terms should be given their ordinary and natural meaning, and that contra proferentem applies only where genuine ambiguity remains after applying ordinary principles of interpretation.

The principal areas of insurance disputes include motor, health, life, fire and property insurance, which generate the bulk of the claims.

At the same time, there has been increasing activity in professional indemnity (PI), directors’ and officers’ liability (D&O), cyber, aviation and other financial-lines insurance, where disputes tend to be higher-value and more technically complex. The growth of these has brought greater focus on issues such as causation, exclusions, aggregation and the scope of cover.

There has therefore been a gradual shift from predominantly traditional coverage and claims disputes towards more complex liability and financial-lines disputes, although claims handling and coverage interpretation continue to account for a substantial proportion of insurance disputes.

Policy wording and drafting issues remain a significant source of insurance disputes.

Exclusion clauses and their interpretation are a particularly common source of contention, especially where the scope of an exclusion overlaps with the insured peril. Disputes also frequently concern warranties, conditions precedent, notification requirements, disclosure obligations, deductibles, sub-limits and endorsements.

We have also seen a significant number of disputes concerning the arbitrability of disputes arising under “quantum-only” arbitration clauses, particularly where the insurer has admitted part of the liability, or the claim has otherwise been settled or discharged. Such disputes commonly turn on whether the arbitration clause extends only to the determination of quantum or also permits arbitration of questions concerning liability and the existence or extent of the insurer’s underlying obligation.

In practice, the approach adopted by insurers and insureds depends substantially on the nature of the dispute. Where the dispute is principally one of quantum and the coverage position is relatively clear, parties often seek to resolve the claim through negotiations following the surveyor’s or loss assessor’s assessment. In larger and complex claims, this may involve several rounds of discussions and revised assessments before either party takes a final position. Where there is a significant dispute on coverage, liability or the application of an exclusion, settlement becomes more difficult, and parties are more likely to preserve their respective positions and pursue the dispute through the contractual or statutory mechanism available to them.

There is an increased appetite to consider mediated settlements in view of the costs and the uncertainties associated with litigation in India.

The decision to settle or proceed therefore depends on the merits of the claim, the amount in dispute and the significance of the issue beyond the individual claim.

An Indian insurance policy issued by an Indian insurer to an Indian insured must be governed by Indian law, other than for marine insurance contracts. The governing law of a reinsurance contract is left to the cedant and the reinsurer to determine.

Party autonomy in relation to choosing foreign law to apply to an Indian insurance contract is strictly limited to marine insurance.

Indian Courts generally uphold jurisdiction clauses in insurance contracts where the chosen Court is otherwise competent to entertain the dispute, provided the jurisdiction remains within India.

Parties may, by agreement, select one among several Courts having jurisdiction, but cannot confer jurisdiction on a Court which would not otherwise possess it or has no legal ties with the case. The intention to make a jurisdiction clause exclusive is determined from the language of the contract and must be sufficiently clear. The Supreme Court has consistently recognised this principle within the insurance context. In New India Assurance Co Ltd v T K Nanjunda Setty and Sons, 1963 SCC OnLine Kar 104, the Court upheld clauses requiring proceedings under insurance policies to be instituted in specified Courts, where those Courts otherwise had territorial jurisdiction. More recently, in 2025, in Rakesh Kumar Verma v HDFC Bank Ltd, 2025 SCC OnLine SC 752, the Supreme Court reiterated that an exclusive jurisdiction clause is enforceable where the selected Court is competent to exercise jurisdiction, and the agreement demonstrates an intention to exclude other competent forums.

Party autonomy in matters of jurisdiction is generally respected, subject to mandatory law and public policy and when it remains within India. Where no express choice has been made, the Courts determine territorial jurisdiction by applying the applicable statutory rules having regard to factors including the place where the contract is executed or performed, the location of the risk, and the place where the opposite party actually and voluntarily resides or carries on business, or personally works for gain.

Jurisdiction clauses are commonly found across life, general and health insurance policies, particularly in retail policies, while commercial insurance and reinsurance contracts may contain more standardised jurisdiction and arbitration provisions. Reinsurance contracts may confer jurisdiction to foreign institutions.

An Indian party and a foreign party can legally choose foreign law as the governing law and select a foreign jurisdiction or foreign arbitral seat for their contract. The only exception is where a specific mandatory Indian statute overrides party autonomy, such as Section 46 of the Insurance Act, 1938 (“Insurance Act”) that provides for applicability of Indian law for direct non-marine insurance policies issued in India, or where the agreement violates fundamental Indian public policy.

Parties’ contractual choice of governing law, jurisdiction and, where applicable, arbitral seat is generally upheld by Indian Courts. This is particularly relevant in cross-border reinsurance, where the contract may be governed by foreign law and provide for a foreign seat, while the Indian cedant, Indian risks or the reinsurer’s Indian operations remain subject to mandatory Indian regulatory requirements. The Indian regulatory framework permits foreign reinsurers to participate in Indian reinsurance business through various structures, including foreign reinsurer branches, Lloyd’s India and cross-border reinsurance arrangements.

In practice, cross-border disputes may therefore involve multiple legal and regulatory regimes. Common challenges include determining the appropriate forum where the parties, insured risk and relevant events are located in different jurisdictions; reconciling a foreign governing-law or jurisdiction clause with mandatory Indian law; and coordinating proceedings before the Courts at the arbitral seat with proceedings in India relating to interim relief or enforcement. These issues are particularly significant in cases of reinsurance arrangements, where contractual obligations may be governed by one law, regulatory requirements may arise under another, and disputes may ultimately require proceedings or enforcement in a third jurisdiction.

Courts in India generally enforce exclusive jurisdictional clauses and grant anti-suit injunctions restraining the defaulting party from proceeding in the non-contractual forum. For instance, in Enercon (India) Ltd v Enercon GmbH, (2014) 5 SCC 1, the Supreme Court of India upheld an anti-suit injunction to restrain proceedings in England since the contractually agreed seat of the arbitration was in India and Indian Courts held exclusive supervision over the case.

Anti-suit injunctions are usually granted in exceptional circumstances, such as cases where it will be impossible to prosecute in the agreed forum due to vis major or force majeure, or it will be oppressive to drag the parties to their chosen forum having regard to other factors.

In Modi Entertainment Network v W.S.G. Cricket Pte Ltd, (2003) 4 SCC 341, the Supreme Court held that the power of anti-suit injunctions should be exercised sparingly and only in instances in which, if the injunction is denied, the end of justice will be defeated. This was further relied upon by the Supreme Court in Dinesh Singh Thakur v Sonal Thakur, (2018) 17 SCC 12, which held that the test for anti-suit injunction is whether grave injustice would result from refusing the injunction and whether the foreign proceedings are oppressive or vexatious.

In case of an arbitration, where parties designate a seat of arbitration, that designation is treated as analogous to an exclusive jurisdiction clause in favour of the Courts at the seat. Indian Courts have consistently held that, where a seat is designated, only Courts at the seat have supervisory jurisdiction for arbitration, regardless of any conflicting exclusive jurisdiction clause elsewhere.

An anti-arbitration injunction is considered an even more drastic remedy than an anti-suit injunction as it prevents and restrains the parties from commencing or continuing an arbitration proceeding. The Courts have held that, where a valid arbitration agreement exists, the proper recourse is to raise jurisdictional objections before the arbitral tribunal, not to seek an anti-arbitration injunction from a civil Court. Typically, this relief is granted only in exceptional and rare circumstances.

For instance, more recently, a Division Bench of the High Court of Delhi in Sarr Freights Corporation v Argo Coral Maritime Ltd, 2026 SCC OnLine Del 7230, granted an anti-arbitration injunction restraining the continuation of arbitration proceedings before the London Maritime Arbitrators Association (LMAA). The Court held that no arbitration agreement existed between the parties as the final signed agreement did not incorporate the arbitration clause contained in the parties’ earlier arrangements and expressly superseded those arrangements

The approach is still evolving, as AI systems often involve multiple jurisdictions at different stages, including where the data is sourced, where it is stored and processed, where the AI system is operated and where its outputs are accessed. The recent decision of the High Court of Delhi in ANI Media Pvt. Ltd. v Open AI OpCo LLC, 2026 SCC OnLine Del 5291 is illustrative. Although OpenAI’s servers and the training process were located outside India, the Court found that Indian Courts had territorial jurisdiction, having regard to factors including ANI’s principal place of business in Delhi and OpenAI marketing its services to, and generating responses for users across India, including Delhi.

The decision indicates that Courts are unlikely to determine jurisdiction solely by reference to the physical location of the servers or the place where an AI model is trained. Instead, the focus is likely to be on the continuous chain of cause of action, including factors such as the claimant’s registered office or domicile, and the location of receipt or usage of data and the users. As AI systems increasingly operate across jurisdictions, this may result in greater reliance on principles concerning the location of the harm, purposeful targeting of users and the territorial reach of the applicable substantive law. The question of which jurisdiction’s law applies to particular aspects of an AI-related dispute is, however, likely to remain fact-specific and will depend on the nature of the claim and the jurisdictions involved.

Indian Courts generally strictly enforce arbitration clauses. This position also holds true for insurance and reinsurance contracts. The seven-judge bench of the Supreme Court in its landmark decision in the case of In Re Interplay Between Arbitration Agreements under the Arbitration and Conciliation Act 1996 and the Indian Stamp Act 1899, (2024) 6 SCC 1, overruled the earlier five-judge bench decision of NN Global Mercantile Pvt Ltd v Indo Unique Flame Ltd (2023) 7 SCC 1 and held that an unstamped instrument containing an arbitration clause is valid and enforceable in law. The Supreme Court has also held that an arbitration agreement is a separate contract, and the invalidity of the underlying instrument does not render the arbitration agreement void.

On 27 October 2023, the Insurance Regulatory and Development Authority of India (“IRDAI”) issued a circular directing that all policies issued under the commercial lines of business will have a mandatory arbitration clause, which stipulates that “the parties to the contract may mutually agree and enter into a separate Arbitration Agreement to settle any and all disputes in relation to this policy”. In case parties mutually agree on an arbitration agreement, then the arbitration proceedings will be conducted as per the provisions of the Arbitration and Conciliation Act, 1996 (“Arbitration Act”). The circular has further deleted arbitration clauses from all policies under the retail lines of business prospectively. For the existing retail policies, the existing arbitration clause shall remain valid until the term of the policy expires unless a policyholder specifically requests the insurer to replace it with the clause mandated by the IRDAI. This also applies to all existing policies issued under the commercial lines of business. 

Notably, the Supreme Court in BGM & M-RPL-JMCT (JV) v Eastern Coalfields Ltd, 2025 SCC OnLine SC 1471, has recently clarified that a contractual clause which merely provides that disputes “may be” resolved through arbitration does not, by itself, constitute a valid and binding arbitration agreement within the meaning of Section 7 of the Arbitration Act. The Court made it clear that such language is merely enabling and does not bind the parties to arbitrate unless there is a subsequent, express agreement to that effect.

Further, a five-judge bench of the Supreme Court in the case of Cox & Kings Ltd v SAP India (P) Ltd, (2024) 4 SCC 1, held that non-signatories to an arbitration agreement may be joined as parties to an arbitration proceeding. However, before this, the Court or tribunal must determine whether such persons or entities intended to be bound by the arbitration agreement or the underlying contract based on their conduct, rights, or involvement in the formulation, execution, or termination of the contract.

In ASF Buildtech Pvt Ltd v Shapoorji Pallonji & Co Pvt Ltd, 2025 SCC OnLine SC 1016, the Court invoked the Group of Companies doctrine to implead a non-signatory with a positive, direct and substantial involvement, recognising that in complex areas such as reinsurance contracts, traditional bilateral arbitration frameworks are inadequate. It affirmed that commercial substance must prevail over procedural form to reflect modern business realities.

In India,domestic arbitral awards are governed by Part I of the Arbitration Act read with the Code of Civil Procedure, 1908 (“CPC”) and are enforced in the same manner as a decree of a Court under Section 36 of the Arbitration Act. In practice, however, enforcement through execution proceedings can take considerable time, particularly where the award-debtor raises objections, seeks repeated adjournments, or the execution requires identification and attachment of assets. Thus, while the statutory framework is pro-enforcement, the actual recovery of the awarded amount may still be prolonged.

India is a signatory and has enacted the New York Convention and the Geneva Convention. Enforcement of a foreign arbitral award rendered in a recognised jurisdiction is governed by Part II of the Arbitration Act.

The party applying for enforcement of a foreign award is required to produce, as evidence, the following:

• the original award or a duly authenticated copy of the award;
• the original arbitration agreement or a duly certified copy of the same; and
• such other evidence as is necessary to prove that it is a foreign award.

Refusal to Enforce a Foreign Award

Enforcement of a foreign award may be refused on any of the following grounds (among others):

• a party to the arbitration is under some incapacity or the arbitration agreement is not valid under the law to which the parties have subjected it or under the law of the country where the award was made;
• no proper notice of the appointment of an arbitrator or of the arbitration proceedings was served, or a party was otherwise unable to present its case;
• the arbitral award is beyond the scope of the arbitration agreement;
• the composition of the arbitral tribunal was not in accordance with the parties’ agreement or the law of the country where the arbitration took place;
• the award has not yet become binding on the parties, or has been set aside or suspended at the seat of the arbitration;
• the subject matter of the arbitration is not arbitrable under the law of India; and
• the enforcement of the award would be contrary to the public policy of India.

Indian Courts have generally adopted a pro-enforcement approach and have emphasised that Section 48 of the Arbitration Act does not permit a merits-based review of the award.

In Avitel Post Studioz Limited v HSBC PI Holdings (Mauritius) Limited, 2024 SCC OnLine SC 345, the Supreme Court emphasised that a party resisting enforcement cannot use Section 48 as a means to reopen issues already determined by the arbitral tribunal or to seek a review on merits. Challenges to enforcement must be raised in good faith and in a timely manner, and can succeed only where one of the specific grounds under Section 48 is established. In particular, the public policy exception is to be construed narrowly, having regard to the international character of a foreign award, and the enforcement Court cannot act as an appellate Court over the award.

Recently, in Messer Griesheim GmbH v Goyal MG Gases Pvt Ltd, 2026 INSC 298, the Supreme Court refused to enforce a foreign summary judgment, holding that a judgment rendered despite triable issues existing, and in disregard of, Indian foreign exchange laws is violative of Section 13 of the CPC.

In Nagaraj V Mylandla v PI Opportunities Fund-I, 2026 SCC OnLine SC 1218, concerning enforcement of a Singapore-seated award, the Supreme Court applied the doctrine of transnational issue estoppel, holding that issues conclusively determined by the Courts at the seat could not ordinarily be re-litigated in India by recasting them as objections to enforcement. The decision reinforces the distinction between the primary jurisdiction of the Courts at the seat and the secondary jurisdiction exercised by an enforcement Court.

Accordingly, the principal legal and practical barriers to enforcement are a valid and timely challenge to a domestic award, the obtaining of a stay of enforcement, or, in the case of a foreign award, satisfaction of one of the limited grounds under Section 48 of the Arbitration Act. The prevailing approach of the Indian Courts is to uphold the finality of arbitral awards and to avoid converting enforcement proceedings into a second merits review.

Most commercial general insurance contracts typically have a standard arbitration clause where any dispute may be referred to arbitration.

However, the insured may also choose to approach the consumer forum, which is a summary procedure.

The Supreme Court has recently settled the question of whether corporate insureds can be considered as “consumers” under the Consumer Protection Act 1986 (“Consumer Act 1986”). The Supreme Court in the case of National Insurance Co Ltd v Harsolia Motors (2023) 8 SCC 362 has held that since insurance contracts are contracts of indemnity there exists no element of profit generation and therefore insurance disputes come within the purview of the Consumer Act 1986.

Reinsurance disputes are increasingly being referred to arbitration, particularly given the complex and highly negotiated nature of reinsurance arrangements. Courts have generally given effect to these contractual arrangements, recognising arbitration as an established mechanism for resolving disputes between insurers, reinsurers and, in appropriate cases, reinsurance intermediaries.

Arbitral proceedings are confidential. Section 42A of the Arbitration Act requires the arbitrator, arbitral institution and parties to maintain confidentiality of all arbitral proceedings, subject to disclosure of an award where necessary for its implementation or enforcement. The Supreme Court has treated confidentiality as an important statutory feature of the arbitral process. In Kamal Gupta v LR Builders Pvt Ltd, 2025 SCC OnLine SC 1691, the Supreme Court held that a non-signatory could not be permitted merely to attend and observe arbitral proceedings, noting that such participation would be inconsistent with the confidentiality obligation under Section 42A.

Challenge and Appeal of Awards

Section 34 of the Arbitration Act provides a party with a right to approach a Court to set aside an arbitral award. A Court hearing a challenge of an award does not sit as an Appellate Court over the decisions of an arbitral tribunal, and therefore, it cannot re-examine the evidence/merits to arrive at a different possible conclusion or finding.

The Court’s scope of interference is limited to the grounds laid out in Section 34, which includes incapacity of a party to enter into arbitration, improper notice of arbitration, ultra vires jurisdiction, invalid composition of the arbitral tribunal, a conflict with the public policy of India, and patent illegality appearing on the face of the award. Also, by way of the amendment to the Arbitration Act in 2015, the scope of “public policy” has been narrowed down to include only those instances where:

• the making of the award is fraudulent or corrupt;
• the award is in contravention of the fundamental policy of Indian law; or
• the award is in conflict with the most basic notions of morality or justice.

The scope of interference is further restricted where an arbitral award has been passed in an international commercial arbitration, in which case the ground of “patent illegality”, which includes perversity, is not available.

An application for setting aside an award must be made before the expiry of three months from the date on which the award was received by the party concerned. The Courts can entertain the application beyond three months, but within 30 days, if the party concerned is able to demonstrate sufficient cause.

The order by the Court under Section 34 of the Arbitration Act can be appealed, under Section 37, to the Court with the necessary jurisdiction to hear appeals from the Court in question. There is no statutory right to appeal from an order passed under Section 37. However, a party may prefer a special leave petition, under Article 136 of the Constitution of India to the Supreme Court. It is at the discretion of the Supreme Court to entertain such a petition, which it does sparingly.

In Gayatri Balasamy v ISG Novasoft Technologies Ltd, (2025) 7 SCC 1, a five-Judge Bench of the Supreme Court clarified that Courts exercising jurisdiction under Section 34 do not have a general power to modify arbitral awards. The Court nevertheless recognised limited powers, including severing an invalid and severable portion of an award, correcting clerical, computational or typographical errors apparent on the face of the record, and making limited adjustments to post-award interest.

The Supreme Court has clarified the application of the burden of proof in insurance cases, reaffirming that it rests on the party making the assertion. In Mahakali Sujatha v Branch Manager, Future Generali India Life Insurance Co Ltd & Ors, (2024) 8 SCC 712, the Supreme Court emphasised that the principle of burden of proof in the law of evidence is that “he who asserts must prove”, meaning that the burden of establishing a fact lies with the party asserting it. This burden never shifts; however, the onus of proof shifts during the process of evaluation of evidence. In the context of insurance disputes, while the burden of proof remains with the insured, the onus of presenting evidence can shift depending on the phase of the dispute and the type of evidence being evaluated.

Recently, the Delhi High Court in Supermint Exports Pvt Ltd v New India Assurance Co Ltd, FAO(OS)(COMM) 286/2022 held that mere assertion of financial distress or commercial pressure does not invalidate discharge vouchers unless such distress was caused by the insurer, and the insured establishes that it was compelled by the insurer to execute them through fraud, coercion, undue influence or duress.

A significant recent development has also been the increased judicial scrutiny of fraudulent motor accident insurance claims. In Oriental Insurance Co Ltd v Tuni Pati & Ors, 2026 SCC OnLine SC 1710, proceedings concerning allegations that an insured vehicle had been falsely implicated in a motor accident claim revealed concerns regarding a wider pattern of fraudulent claims, including the repeated use of the same insured vehicle in multiple accident claims. The Supreme Court consequently expanded its consideration of the issue on a pan-India basis and directed States to constitute dedicated Special Investigation Teams to investigate suspected fraudulent motor accident insurance claims.

The Court has also placed greater responsibility on insurers in identifying and reporting suspected fraud. Insurers have been directed to refer claims indicative of fraud to the relevant Special Investigation Teams and, where a claim is rejected by a Motor Accident Claims Tribunal on grounds of fraud or collusion, to undertake an internal appraisal and refer the matter for investigation.

These developments reflect a broader judicial emphasis on evidence, contractual certainty and closer scrutiny of suspected fraudulent claims. They are also likely to result in insurers adopting more rigorous claims-verification and fraud-detection processes, particularly in relation to motor accident claims, while requiring a clear evidentiary basis for repudiation or allegations of fraud.

Courts generally construe ambiguity in insurance policy wordings in favour of the insured. The Supreme Court, in Haris Marine Products v Export Credit Guarantee Corporation Ltd, (2022) SCC OnLine SC 509, held that an ambiguous term in an insurance contract should first be construed harmoniously by reading the policy in its entirety. If the contractual term remains unclear, then the rule of contra proferentem must be applied. This principle dictates that any ambiguity in the terms of a contract should be interpreted against the drafter of the policy which, in cases of insurance, would be the insurer. However, the rule of contra proferentem does not give Courts the power to rewrite the terms of the policy merely because one party seeks a favourable interpretation.

In relation to exclusions, Courts generally require the insurer to establish that the exclusion clearly applies and tend to construe exclusionary clauses strictly. Endorsements are read together with the policy, and will be given effect where their wording clearly modifies or limits the underlying coverage. The overall approach is therefore to give effect to the policy as a whole and the parties’ contractual bargain, while protecting the insured against genuinely unclear or overly broad exclusionary language.

Increasing engagement of third-party service providers for development, maintenance and operations of IT systems means there has been an increase in the potential impact of cyber-incidents and technology failures as these can affect multiple organisations simultaneously. A cyber-attack, outage or other disruption at a vendor can have a direct and significant impact on its customers’ operations, data and business continuity.

In the author’s experience, such interdependent risks are being addressed by both vendors and their customers. Technology providers are purchasing third-party liability covers, which extend to liabilities arising from being used as a conduit by threat actors (often referred to as conduit liability). At the same time, their customers are seeking broad policy covers that extend cyber and technology coverage to incidents arising from vendor-managed or outsourced systems. This reflects a growing recognition that cyber-risk often resides across a wider ecosystem rather than within a single organisation.

Disputes concerning aggregation, limits of liability and occurrence wording remain relatively limited in India, but these issues are becoming more relevant within the context of large or systemic losses. Where multiple claims arise from the same underlying event or series of events, questions may arise as to whether they constitute a single occurrence or multiple occurrences for the purposes of applicable limits and deductibles.

These issues are particularly relevant in property, liability, cyber- and catastrophe-related claims, where the characterisation of the underlying event can materially affect the extent of the insurer’s exposure. In the absence of a developed body of Indian case law on aggregation, such disputes are likely to turn primarily on the precise policy wording and the factual connection between the losses.

In the author’s experience, insurers do not generally agree to pay claims where the underlying losses are the result of illegal acts by the insured. Similarly, insurers generally deny cover for claims involving sanctioned entities and most policies and reinsurance terms include express exclusions to this effect.

In the past year, the Courts have addressed a significant number of insurance-related issues, particularly in relation to interpretation of insurance policies, disclosure of material facts, and repudiation of claims by insurers on grounds of non-production of documents. There has been a trend towards stricter interpretation of terms and conditions of policies.

There has also been increased scrutiny of claims handling and delays in claim settlement. Recent regulatory and judicial developments emphasise that claims should not be repudiated mechanically on procedural grounds such as delayed intimation or submission of documents, particularly where the delay is satisfactorily explained. Insurers are increasingly expected to record valid reasons for repudiation and comply with prescribed claims-handling timelines.

The Indian insurance industry is a relatively new market compared to various global markets. As a result, the industry is still considered to be in a relatively nascent stage of development, particularly for various lines of insurance products which have recently been introduced in India. In relation to these products, the insurer’s underwriting is derived, to some extent, from global claims experience, in the absence of specific Indian claims experience.

Recently, the Indian market has seen an increase in the volume as well as the quantum of claims reported, due to various ESG factors. Additionally, there has been a significant increase in premiums, particularly for life and health insurance, attributed to adverse mortality and morbidity rates, experienced in large part as a result of the COVID-19 pandemic.

From a disputes perspective, ESG and climate-related risks have not yet resulted in a significant body of reported coverage litigation in India. However, the increasing frequency and severity of climate-related events may give rise to coverage issues concerning causation, aggregation, policy limits and exclusions, particularly under property, business interruption and liability policies.

Insurers are responding to these evolving exposures through greater scrutiny at the underwriting stage and by reviewing the scope of coverage, policy limits and exclusions. As ESG and climate-related claims develop, disputes are therefore likely to turn increasingly on the precise policy wording and whether emerging risks fall within existing coverage or exclusions.

Historically, the regulatory framework in India has required insurers to retain responsibility for underwriting and claims decisions. Broadly, the insurer remains responsible for the insurance business conducted by it. In health insurance, for example, third-party administrators (TPAs) may undertake claims administration and provide cashless and related services, but claims processed by a TPA are ultimately referred to the insurer for decision.

That said, the Insurance Act, India’s principal insurance statute, was recently amended by the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Act 2025, and now formally recognises managing general agents (MGAs) as a category of insurance intermediary. However, the detailed IRDAI framework governing the registration, functions and permissible delegated authority of MGAs in mainland India remains under development. Statutory recognition of MGAs therefore does not, by itself, determine the underwriting or claims authority that they may exercise.

In contrast, the International Financial Services Centres Authority (IFSCA), the regulatory authority for India’s international financial services hub, has contemplated MGA structures in GIFT City since 2021 and has recently introduced a standalone regulatory framework under the IFSCA (Managing General Agents) Regulations 2026. These regulations permit MGAs to exercise delegated underwriting and claims-settlement authority under binding authority agreements (BAAs), subject to specified limitations on coverage disputes.

Given the relative novelty of the MGA or other delegated structures in India, there is no body of disputes concerning them. Potential issues are likely to include whether an MGA acted within the scope of its authority, attributing any of its own representations or conduct to the insurer, the adequacy of oversight held by the insurer, and the contractual allocation of responsibility under the BAA.

Among liability lines, PI has shown a steady increase in claims activity over the past five years and remains the busiest area for claims, followed closely by D&O and cyber-insurance. For PI policies, the information technology sector appears to generate various high-value claims, reflecting the growth of reliance on complex digital services and infrastructure. Claims arising from cloud-based services and infrastructure failures have become a major driver of losses as organisations become more dependent on third-party technology vendors and interconnected systems.

There is familiarity and demand for liability insurance, and, over the past five years, there has been a steady upward trend in claims made under PI policies. It remains the busiest claims area, followed closely by D&O. In fact, PI and D&O claims make up at least half of the total claims that the authors have seen being made under liability policies.

The increase in the frequency and severity of liability claims is also influencing coverage disputes. In particular, higher-value and more complex claims are giving rise to greater scrutiny of the scope of indemnity, applicable exclusions, policy limits and the recoverability of defence costs. Claims involving multiple insureds or third-party claimants may also give rise to issues concerning allocation of liability and the interaction between the underlying liability proceedings and the insurer’s coverage position.

Claims against insureds in this jurisdiction primarily concern D&O policies, often driven by regulatory investigations and proceedings. Typically, such matters would involve multiple stages, beginning with an investigation and often followed by lengthy hearings, trials and appeals. As D&O policies generally provide cover from all such stages, costs are incurred from the outset and could become substantial in view of the protracted nature of such proceedings.

The rapid pace of technological development has made disputes in the IT sector increasingly complex, often involving complex systems, evolving technologies and interconnected services. As a result, insurers must work more closely with insureds and technical experts to understand the underlying facts, assess liability and evaluate the nature and extent of any loss.

High-value cross-border disputes have increased in number, in part due to the increased use of long-term outsourcing arrangements for technology transformation, development and managed services. Disputes of this nature are often complex, time consuming, involve multiple jurisdictions and may result in significant defence and settlement costs. Insurers are therefore adopting a more proactive strategy for managing claims, with more stringent control of defence costs and earlier engagement in the settlement process to determine whether a commercial resolution might be preferable to drawn-out and costly litigation that inevitably produces a degree of uncertainty as to both outcome and quantum.

Third-party litigation funding is permitted in principle, but the lack of a dedicated regulatory framework and limited judicial guidance have limited the development of this industry. As a result, the use of third-party funding remains relatively uncommon. Instead, exposure to litigation costs is more often managed through insurance products that provide cover for third-party liabilities and associated defence costs. Insurers’ involvement in the defence is also necessary to ensure that the most effective strategy is put in place, and for this, preparing an early liability and quantum assessment is necessitated.

In the author’s experience, there has not yet been a substantial increase in AI-generated claims and complaints in this jurisdiction.

There is no equivalent law in India of the UK Third Parties (Rights Against Insurers) Act 2010. As a general rule, Indian law recognises the principle of privity of contract; consequently, a third party may not be able to bring a direct action or claim against an insurer.

That being said, it is common practice for third parties to name the defendant’s insurer in motor accident-related proceedings. The Motor Vehicles Act, 1988 (“MVA”) provides that the rights of an insured under a policy are transferred to a third party claiming against the insured in the event of the insured’s insolvency. The MVA empowers the Motor Accident Claims Tribunal to seek the insurers’ involvement in a third-party action against the insured if the tribunal believes the claim is collusive or if the insured fails to contest the claim. Section 164 of the MVA makes insurers liable to pay compensation in case of death or grievous hurt without the need to plead or establish any fault under the following terms: (i) in the case of death, INR500,000 (approximately USD5,200); and (ii) in the case of grievous hurt, INR250,000 (approximately USD2,600).

Outside motor third-party insurance, direct actions remain comparatively limited. A third party will generally need to establish an independent legal basis for proceeding against the insurer, such as a statutory right, an assignment or a specific contractual arrangement. Ordinary liability policies do not, merely by providing indemnity to the insured, generally confer upon third parties a direct contractual right against the insurer.

This distinction is particularly relevant in liability insurance, including PI, D&O and other financial lines policies. Although third-party claims may be the underlying claims for which the insured seeks indemnification, the third party does not thereby acquire a general direct right against the insurer. Additionally, financial and liability products, including PI and D&O insurance, have seen increasing claims activity, but this does not alter the underlying privity position.

The defence of claims against insureds is becoming increasingly complex, particularly where the underlying claim is accompanied by regulatory or investigatory proceedings, reputational concerns or multiple related claims. This is particularly relevant in D&O, professional liability, employment and cyber matters, where the same underlying circumstances may give rise to civil proceedings, regulatory scrutiny and claims involving several insureds or claimants. These developments can require greater coordination of defence strategy across related proceedings and careful management of potentially competing interests.

Insurers are responding through earlier and closer involvement in the defence of significant claims, including the appointment and coordination of counsel and experts, monitoring of defence costs and consideration of settlement strategy. Where several insureds, claimants or proceedings are involved, particular attention is also being given to potential conflicts between insureds, allocation of defence costs and ensuring that the defence of the underlying proceedings is appropriately coordinated with the insurer’s coverage position.

Recent geopolitical developments have had a direct impact on the Indian insurance and reinsurance market, most notably the US–Iran conflict and the resulting disruption in the Strait of Hormuz. The conflict has materially affected marine and war-risk insurance, with insurers and reinsurers reassessing capacity, pricing and territorial coverage for vessels operating in the Persian Gulf and surrounding waters.

The impact has been particularly significant for marine hull, cargo, protection and indemnity (P&I) and war-risk insurance, given India’s dependence on maritime trade through the region. The response has extended beyond individual policies as, in May 2026, India established the Bharat Maritime Insurance Pool, backed by a USD1.4 billion sovereign guarantee, to provide continued maritime insurance capacity in the context of the Middle East conflict. These developments are also likely to generate coverage disputes concerning the application of war, terrorism and sanctions exclusions, territorial and geographical exclusions, aggregation of losses and the availability and scope of reinsurance. The interaction between sanctions imposed by different jurisdictions can create additional difficulties where an insured, vessel, cargo, counterparty or payment channel has a connection with a sanctioned entity or territory. The recent expansion of US sanctions concerning Iranian shipping and maritime insurance illustrates the increasing overlap between sanctions compliance and insurance arrangements.

The effect is not confined to the Middle East. The continuing Russia–Ukraine conflict and broader trade tensions have similarly encouraged more cautious underwriting and tighter scrutiny of geopolitical exposures. The Indian market has therefore seen greater attention to war-risk pricing, exclusions, sanctions clauses and reinsurance capacity, particularly for marine, aviation, trade credit, property and business interruption risks.

Cross-border payment requirements, coupled with frequent exchange rate fluctuations, mean that insurers often seek to agree and fix the applicable exchange rate with the policyholder. This helps provide certainty as to the amount payable, and avoids disputes arising from currency movements.

War, terrorism and political-risk exclusions have become more significant in light of recent geopolitical developments, particularly the Russia–Ukraine conflict and the 2026 conflict involving Iran and the resulting disruption to maritime trade. These developments have increased the potential for disputes concerning the classification of losses, causation and the application of war, terrorism and political-violence exclusions, particularly in marine and aviation insurance.

Indian jurisprudence has principally developed around terrorism exclusions. In Narsingh Ispat Ltd v Oriental Insurance Co Ltd, 2022 INSC 502, the Supreme Court held that, where the policy itself defines an act of terrorism, contractual definition governs. The insurer bears the burden of establishing that the loss falls within the exclusion; where the exclusion is ambiguous, the benefit goes to the insured. The Court accordingly rejected reliance on broader statutory definitions of terrorism where these were not incorporated into the policy. There is not yet a substantial body of reported Indian litigation specifically concerning war or political-risk exclusions arising from the recent geopolitical conflicts. However, these events are creating greater uncertainty around the distinction between war, terrorism, civil commotion and other forms of political violence, particularly where losses arise from attacks by non-state actors or involve maritime and aviation risks.

While the authors have not encountered claims arising solely from supply chain disruptions or systemic loss events, these factors have introduced greater uncertainty into the reinstatement process under property insurance. In particular, shortages of materials, labour constraints and broader market disruptions can delay repairs and increase costs. As a result, insurers are increasingly reliant on loss adjusters and other project professionals to monitor progress, manage delays and help expedite reinstatement following a loss.

Over the next 12–18 months, geopolitical uncertainty is likely to result in more complex coverage disputes, particularly in marine, aviation, energy and property insurance. Disputes are likely to focus on the classification and causation of losses, including whether an event constitutes war, terrorism, civil commotion or sabotage, and the application of corresponding exclusions. Greater emphasis can be expected on the precise wording of war, terrorism and sanctions exclusions, as well as causation and aggregation issues, particularly where losses span multiple jurisdictions or insurance layers.

Emerging risks are increasingly giving rise to complex coverage disputes, particularly in relation to cyber-risks, technology failures, AI-related losses and climate-related events. Cyber-insurance has seen increasing claims activity, with disputes requiring greater reliance on forensic evidence to establish the nature and extent of the loss.

The increasing use of AI and technology is also likely to generate disputes concerning whether losses fall within existing policy definitions and exclusions, particularly where traditional policy wordings do not clearly contemplate AI-related events or systemic technology failures. Similarly, climate-related and catastrophe losses may give rise to disputes concerning causation, aggregation and the application of exclusions.

From an advisory and regulatory perspective, we are seeing insurers and insurance intermediaries increasingly grapple with AI-enabled risks, both in relation to compliant deployment as well as fraud and cybersecurity risks. These risks are being addressed principally through existing corporate governance, outsourcing, policyholder protection, cybersecurity and data protection norms, since the IRDAI has not yet introduced a comprehensive AI framework.

We are also seeing greater focus on data-localisation requirements and readiness for compliance with the Digital Personal Data Protection Act, 2023 (DPDP Act) and the Digital Personal Data Protection Rules, 2025 (DPDP Rules). Insurance-sector regulations also require policy and claim records relating to Indian business to be maintained in data centres in India. Increasingly, insurers are reviewing data flows, notice and consent mechanisms where applicable, and vendor arrangements, access controls, retention practices and breach-response obligations. These developments may also affect future risks and the nature of privacy and cyber-related insurance disputes.

ESG considerations were not mandatory historically. The principal requirement was for certain insurers meeting specified thresholds in terms of turnover, net worth or profit to constitute a Corporate Social Responsibility (CSR) Committee and undertake minimum such social expenditure per the Companies Act 2013. However, the IRDAI introduced the IRDAI (Corporate Governance for Insurers) Regulations 2024 (CG Regulations), which require all insurers (including Foreign Reinsurance Branches and Lloyd’s India) to maintain a Board-approved Environmental, Social and Governance framework. ESG activities must be monitored by the Board and the framework reviewed annually.

The regulations separately require the Board to establish a comprehensive Climate Risk Management framework, taking into account the size, nature and complexity of the insurer’s operations. The immediate regulatory impact is that insurers are now expected to be able to demonstrate an appropriate framework, oversight and consideration of climate-related risks.

Broadly, India’s data protection regime is governed by the DPDP Act and the recently notified DPDP Rules. The DPDP Act establishes India’s first comprehensive framework governing the processing of personal data. Their commencement is phased: certain provisions are already in force, while most of the principal substantive processing obligations are scheduled to take effect in May 2027.

In addition, insurers and insurance intermediaries are also subject to sector-specific data requirements, including under the IRDAI (Protection of Policyholders’ Interests, Operations and Allied Matters of Insurers) Regulations, 2024 (PPHI Regulations), the IRDAI (Maintenance of Information by the Regulated Entities and Sharing of Information by the Authority) Regulations, 2025, and the IRDAI Information and Cyber Security Guidelines of April 2026, which require insurers and insurance intermediaries to maintain the confidentiality and security of data. The practical effect is particularly significant for underwriting and claims handling, both of which commonly involve personal data being exchanged with intermediaries, TPAs, surveyors, investigators, service providers and other participants.

In terms of underwriting and claims, India’s cyber-insurance market has experienced steady growth and increasing diversity in product offerings. Product design was initially limited to commercial wordings, and retail wordings being influenced by the erstwhile IRDAI Circular on “Product Structure for Cyber Insurance” of 8 September 2021, which set out model coverage clauses and exclusions for retail products.

Considering that the Indian data protection framework is in a nascent stage, there do not appear to have been any significant disputes of note concerning data protection in the insurance industry at the time of writing.

The growth of data centres and related digital infrastructure is increasing risk exposures to traditional perils such as fire, with high values at risk because of the concentration of high-value equipment. This has recently received some attention through government-led reviews of fire safety at data centres. In addition to the traditional perils, the business-critical nature of these facilities also heightens exposures from machinery breakdown, power outages, cooling-system failures and the resulting business interruption and downtime. There is also a significant possibility of liability exposures where outages or service interruptions affect customers or other third parties. From an underwriting perspective, insurers are increasingly trying to understand the design, redundancy, maintenance, fire protection and business-continuity arrangements of each facility. From a claims perspective, the potential for a single infrastructure failure to cause cascading physical damage, business interruption and third-party losses presents challenges in loss assessment.

From a health insurance perspective, Section 21(4) of the Mental Healthcare Act, 2017 requires insurers to provide medical insurance for the treatment of mental illness on the same basis as is available for the treatment of physical illness. The IRDAI’s “Master Circular on Health Insurance Business” of 29 May 2024 also requires insurers to make available products catering to a wide range of policyholders and existing medical conditions.

While mental health insurance products are widely available in India, specific coverage for social media addiction is not yet a widely recognised insurance product or add-on. Whether treatment arising from compulsive or harmful social-media use is covered would depend upon, among other matters, the nature of the diagnosed condition and the terms and benefits of the relevant health insurance policy.

Separately, the erstwhile IRDAI Circular on “Product Structure for Cyber Insurance” of 8 September 2021 included social media liability cover for certain privacy and related liabilities arising from an insured’s use of social media. This is conceptually distinct from health insurance for mental illness or addiction.

There does not currently appear to be any developed body of Indian insurance litigation specifically concerning coverage for social media addiction.

India is yet to see significant reported insurance disputes arising specifically from small modular reactors or fusion technologies. However, under the Nuclear Energy Mission announced in the Union Budget 2025–26, the Government of India aims to develop and operationalise at least five indigenous small modular reactors by 2033.

While these technologies have not yet generated significant insurance litigation in India, their deployment is likely to increase scrutiny of policy wording, exclusions, limits and the allocation of operator and supplier risks.

The Indian insurance sector is highly regulated. During 2024, the IRDAI introduced and revised several significant norms relating to the protection of policyholders’ interests, the registration of insurers (including permitted capital structure and transfer of shares), and the corporate governance framework for insurers, as part of a broader consolidation of the regulatory framework. Some of the key regulatory focus areas affecting insurer behaviour, coverage and insurance litigation are set out below.

• The PPHI Regulations along with “Master Circular on Operations and Allied Matters of Insurers” of 19 June 2024 and the accompanying master circulars prescribe standards and timelines for proposal processing, policyholder servicing, claims handling and grievance redressal. This places increasing importance on the insurer’s contemporaneous claims record, communications with the policyholder, reasons for claims decisions and compliance with prescribed processes and timelines.
• The IRDAI issued revised Information and Cyber Security Guidelines in April 2026, replacing the earlier framework. The guidelines impose further governance and operational requirements relating to information security, cyber-risk, breach/incident preparedness and accountability to the IRDAI and CERT-In. As Indian insurers increasingly rely on digital infrastructure and third-party service providers, cybersecurity and the record surrounding breach responses are likely to become increasingly relevant to both regulatory scrutiny and insurance disputes.
• The IRDAI (Re-insurance) Regulations 2018 (as amended) along with the “Master Circular on Reinsurance 2024” of 31 May 2024 specify norms on operational matters pertaining to retention, procedures for placing reinsurance business, cession limits to cross border reinsurers (CBRs), and the requirement for obtaining collaterals while placing reinsurance business with CBRs.
• The IRDAI (Actuarial, Finance and Investment Functions of Insurers) Regulations 2024 (as amended) and the “Master Circular on Actuarial, Finance and Investment Functions of Insurers” of 17 May 2024, consolidate and repeal the IRDAI’s norms in relation to an insurer’s appointed actuary appointments, duties and responsibilities, valuation of assets, liabilities and maintenance of solvency margin, financial statement preparation, investments, and loans and advances.
• The CG Regulations along with the IRDAI’s “Master Circular on Corporate Governance for Insurers 2024” of 22 May 2024 consolidate and repeal the earlier norms in relation to Board compositions and committees, key managerial personnel, remuneration requirements, audit, disclosure requirements, and the requirement for an ESG framework.
• The IRDAI (Insurance Fraud Monitoring Framework) Guidelines 2025 came into effect on 1 April 2026 and apply to insurers and distribution channels. They establish a more structured framework for the prevention, detection, investigation, reporting and remediation of insurance fraud, including cyber and new age fraud. This has increased the regulatory emphasis on documented fraud controls and the evidential basis on which fraud-related claims decisions are made.

A number of recent and upcoming legislative and regulatory developments are expected to affect insurance coverage, policy wordings and claims handling practices in India. Some of these are set out below.

• The IRDAI has recently issued amendments to several regulations, and proposed amendments to others, to operationalise and align the regulatory framework with the recently amended Insurance Act. Further amendments and implementing measures are expected as this process continues.
• Foreign investment in an Indian insurer is now permitted up to 100%. This is expected to encourage further entry by overseas insurers and reinsurers into the Indian market. In addition, GIFT City already has 22 reinsurers and is expected to attract further entrants. We expect increased reinsurance capacity in India to support greater risk appetite for complex and specialised risks and to potentially contribute to more competitive reinsurance pricing.
• The IRDAI is yet to issue the regulatory framework for MGAs. This could have a significant impact on underwriting and claims handling, depending on the activities and authority ultimately permitted by the IRDAI. MGAs may also facilitate greater underwriting expertise and product innovation in specialised lines such as cyber-, warranty and indemnity and tax insurance.
• Bima Sugam is a unified digital marketplace and public infrastructure for insurance services in India, designed to bring together various stakeholders across the insurance ecosystem. It is expected to launch in the near future and could improve transparency, accessibility and standardisation in policy servicing and claims administration, including by facilitating more streamlined digital interactions between policyholders, insurers and other stakeholders.
• Finally, most of the principal substantive obligations under the DPDP Act and DPDP Rules are scheduled to take effect in May 2027. Their implementation will affect the collection, use, retention and sharing of personal data throughout underwriting and claims processes and is likely to require further changes to arrangements with intermediaries, TPAs, investigators, technology providers and other service providers. The DPDP Act’s significant penalties may also increase demand for cyber-insurance and prompt insurers to reassess coverage provisions in relation to regulatory investigations, fines and breach reporting costs.