Zurich Insurance singled out for paying a supplier 65 days late

Zurich Insurance PLC, which usually compiles reports on payment practices among companies, has been singled out by the UK Small Business Commissioner (SBC) for being tardy in paying a small company.

The insurer took 65 days more than agreed to pay a small business for repairing a vehicle. The bill came up to £1,998.58, and Zurich Insurance had agreed to pay within 10 days from the date of the invoice. Despite the small businesses’ efforts to collect payment, Zurich Insurance did not pay up.

After the small business made a formal complaint, the SBC’s office contacted the claims handling department at Zurich Insurance several times before being advised that the matter would be resolved and payment for the outstanding invoice would be made soon. But they did not pay up.

After the SBC followed up further, Zurich Insurance claimed IT issues were the cause behind the payment delay. It said a manager had approved the invoice and payment would be made by cheque within five to seven working days. But again it did not happen.

The SBC contacted the Chief Financial Officer at the insurance company to escalate the investigation and eventually the company made payment 65 days outside of the agreed payment terms.

The delay was supposedly caused by an administrative error and a breakdown of the approval process. The SBC encouraged the small business to charge late payment interest and compensation, but it did not want to pursue the case further because it did not want to damage its relationship with Zurich Insurance.

The SBC recommends that small businesses exercise their statutory right to claim interest at 8% over the Bank of England base rate and compensation for debt recovery costs under the Late Payment legislation.

Kirtsy Wilson, Chartered Insurer at Zurich Insurance, said: "Following an internal review of the payment in question, Zurich accepts that there were delays in the time taken to raise the payment to the small business and apologises for this and for the lack of response to the initial calls requesting the same.”

Wilson said Zurich Insurance would conduct a full review of the payment process and ensure that feedback is provided to the teams where improvements can be made.