A recent decision by an English court throws light on what
circumstances may require notification under a claims-made
policy.
Background
As its name implies, cover is triggered under a
'claims-made policy' when the insured receives a notice
during the policy period of a claim that he or she is liable.
The notice can be oral or in writing. (In Australia, the
Insurance Contracts Act 1984 (Cth) governs
notifications, especially in sections 40 and 54.)
In the UK, the insured must notify the underwriter that the
insured has received the notice during the same policy period,
or within the days of grace given after it ends.
Claims-made policies are also triggered by notifying the
underwriter of a circumstance the insured becomes aware of that
may lead to the insured receiving a claim of liability. Once a
circumstance is notified to the underwriter, it
'anchors' cover during that policy period.
