In the latest of our series of insurance opinion articles by our Claims Director, Jody Thirkell, he discusses when you should notify your broker and insurer of a potential issue.
As a specialist in contractors’ insurance we are well aware that things often go wrong on construction projects. But when should you notify your Broker and Insurer that you have a problem?
Your professional indemnity insurance will likely be arranged on a claims made basis. This means the insurer on cover at the time the claim is made is the insurer who deals with the claim, not the one on cover when the problem first arose. Your policy will also likely contain a condition that requires you to notify ‘any circumstance that may give rise to a claim’ and this is where it can get tricky!
What exactly is a ‘circumstance’ in this context? Your insurer is unlikely to want to be bombarded with notifications for every snagging issue you encounter on site but on the flip side would certainly want to know from the outset if there is a fundamental flaw with the design of the building, or part of it. However it is what lies in between these extremes that often causes a problem.
If you are aware of an issue and choose not to disclose it and that issue manifests itself in a claim in the future, your insurer could well have the right to decline the claim for non-disclosure, particularly if the policy has gone through a renewal or you have changed insurer.
What, then, is the solution? At Romero we will speak to the insurer when cover is being placed and ensure that we are very clear on what the underwriters would expect to be notified and what they wouldn’t. We then convey this to our client in clear terms. If all parties are aware of what is expected and everyone complies, it becomes much less likely that a claim will run into difficulties when they do arise.
As always, communication is the key!
If you’d like to speak to Jody about anything you’ve read in this, or any other of his articles, send us a message and we’ll put you in touch! You can do so via our Facebook, Twitter or LinkedIn accounts!