Claims Made Contract Policies
The following policies are generally issued on a ‘claims made contract’:
- Professional Indemnity Insurance
- Directors & Officers Liability /Management Liability Insurance
- Employment Practices Liability Insurance
- Fidelity Insurance
This means that the policy will respond to claims first made against you and reported to the insurer during the period of insurance, specified in the policy schedule.
You should notify in writing of any circumstances that you become aware of during the period of insurance, which could give rise to a future or potential claim, as soon as practical, within the period of insurance. Failure to notify claims may breach the terms and conditions your policy coverage.
What to Do
It is important that NO admission of liability is to be made by you to any third party. The third party demand can be either verbal or written demands (under most policies some) substantiating any damages claimed.
When making a claim, the documents outlined below should be sent to your insurer or insurance broker immediately:
- Copy of the letter of demand from third party.
- Completed claim form.
- Report of the incident signed by a manager and/or any employees involved.
Your insurer will determine whether any further investigation is needed. They will negotiate settlement or otherwise with the third party on your behalf. Any further demands or communication received should be directed to your insurer or insurance broker prior to responding.
Whatever the claim type, you must make sure you notify your claim to your insurer or insurance broker as soon as possible and gather all relevant information at the time of the incident (such as third party details and/or witness details).
It is important that all claims are settled quickly and fairly so as to minimise any disruption to your business. Completing a claim form immediately, or as soon as practicable and submitting the details to your insurer or insurance broker means your claim can be actioned quickly and efficiently and minimising the impact to you.
By John Hester