This article presents a comparative legal analysis of wrongful claims handling by insurance companies in indemnity and liability insurance. From the outset, it is clear that it may be difficult to draw the line between legitimate claims denial and refusal to pay, on the one hand, and malicious protraction, procrastination and rejection of valid claims, on the other hand. Therefore, it is interesting to find that European legal systems diverge considerably in their stance against wrongful claims handling. In some legal systems, the issue of wrongfulness does not seem to play a significant role. There, the focus is on less value-laden concepts such as delay, default and the imputability of the delay. The result is that, at some point in time, statutory interest may become due. Sometimes, additional damages may be claimed as well. In other legal systems, ‘bad faith’ is considered a special category for all insurance contracts, allowing an escape from the limited amounts paid by way of interest. Again other legal systems seem to regard the obligation to pay interest as the only consequence of wrongful claims handling. The analysis of the different approaches towards wrongful claims handling shows that there are different solutions not only across legal systems but also within jurisdictions. Tort law and insurance law may have to compete with alternative sources of law such as insurance business regulation. Given the wide variety of positions, the Principles of European Insurance Contract Law (PEICL) seem to go beyond merely restating the current common core.