Notification of claims and circumstances—commercial insurance
Notification of claims and circumstances—commercial insurance

The following Insurance & Reinsurance guidance note provides comprehensive and up to date legal information covering:

  • Notification of claims and circumstances—commercial insurance
  • Background
  • What are the current guidelines for notification?
  • Practice Tips

Background

Commercial insurance policies (insurance held by businesses) normally contain terms requiring notification of claims within a period of time from which a covered loss occurs. There may be a requirement to notify within a set number of days or a ‘reasonable’ period. In Cassell v Lancashire and Yorkshire Accident Co, (1885) 1 TLR, 495, DC. (not reported by LexisNexis®), the claimant had an insurance policy against certain accidents. It was a condition precedent of liability in the policy that notice of any accident be given with 14 days of its occurrence. The claimant suffered an accident, but no consequences of this manifested themselves for several months, and therefore, the claimant saw no reason to notify the insurers within the 14–day period. The court upheld the insurers’ repudiation of the claim on the ground that the clause was clear and unambiguous. A similar result was reached in TH Adamson & Sons v Liverpool London and Globe Insurance [1953] 2 Lloyd’s Rep 355, Lord Goddard CJ (not reported by LexisNexis®), which concerned an employees’ fidelity policy. In this case, an employee committed fraud and to avoid getting caught, did his best to conceal his act. In fact, he covered his frauds so well, it took months for the employer to discover them, and the employer therefore exceeded the 14 days