Comment: Tom Bell - It all depends on the circumstances: Notification under professional indemnity insurance
The recent decision of Mrs Justice Moulder in Euro Pools plc v Royal and Sun Alliance Insurance plc  EWHC 46 (Comm) considered various coverage issues that can arise in the context of professional indemnity insurance policies. This article focuses on just one: notification.
Notification: an introduction
Professional indemnity insurance is a species of ‘claims-made’ insurance. This means that the insurer’s obligation to indemnify is triggered not by the occurrence of a loss (the ascertainment of the insured’s liability to a third party), but by the prior occurrence of a third party making a claim against the insured. The rationale for this is that insured would otherwise struggle to renew cover: if a claim is made in year 1, the insured would have to disclose it to the insurer when renewing for year 2 (the duty of fair presentation under section 3 of the Insurance Act 2015), but the insurer would either refuse to cover the risk or would charge an exorbitant premium for doing so. If, however, the making of the claim against the insured were the trigger for cover, the year 1 policy would respond, and the problem would fall away.
Read Tom Bell’s full article