4.1 Claims: Notifications Flashcards
Decision in Lloyd’s TSB v Lloyd’s Bank
proximate cause was poor advice, nor poor training
Two people insured may contact when claim arises
Insurer or broker
What basis should all ex gratia payments be made on and why
W/o prejudice to avoid disclosure if litigation ensues
What does ‘may’ give rise to a claim mean under Kidson
Real + appreciable possibility, on an objective view
What case interpreted the meaning of ‘as soon as practicable’ for notification clauses
Kidson
What kind of policy coverage is more expensive and why
Occurrence basis, as exposes insurer to indefinite future liability
What are aggregation clauses
Aggregates together different losses to create one claim
Kidson on ‘as soon as practicable’ meaning
When insured has sufficient knowledge of possibility of claim
Why does 11 IA not apply to notification CPs to liability
Notification CPs relate to risk as a whole, not a particular risk
Who will insurer involve first if claim arises
Claims handler
What is a claims made policy
Insurer at time of claim/notification = liable, even if circumstance turns into claim outside of policy period
Kidson defines ‘may’ or ‘likely’ for circumstances?
‘May’
What does ‘likely’ to give rise to a claim mean under Layher
At least 50% chance of claim being made, not just possible
What is the general inclination of insurer when claim received
To settle
Two cases on wording for circumstance - ‘may’ and ‘likely’
Kidson and Layher
What does s.13A IA do
Gives insured right to claim damages if insurer fails to settle within reasonable time
What does the difference in decision between Countrywide and Lloyd’s suggest?
‘Single act/omission’ cannot be more remote cause of poor training, but ‘single source’ can be
What is an occurrence basis policy
Insurer at time of occurrence = liable, regardless of insurer at time of claim
What should insurer do if received notification of claim, but potentially there was a circumstance before claim arose
Check no previous notification of the circumstance
What guidelines give minimum standards for S’s PII
SRA Minimum Ts&Cs
What case suggested that, for aggregation clauses, ongoing affairs are not a single act
Lloyd’s TSB v Lloyd’s Bank
Two alternatives to a waiver of rights
Ex gratia payment or w/o prejudice payment
How does SRA limit exclusions/avoidance under PII for Ss
Only allow exclusion for fraudulent party, not for innocent, and cannot avoid in event of fraud
What is a w/o prejudice payment
Settlement between parties
What do policies include if with same insurer for several years
Retroactive date - cover all claims back to beginning of first policy
Kuwait Airways policy wording
Max policy limit for ‘any one occurrence’
What Act brought in provisions to control insurer’s late payment of claims
Enterprise Act 2016, inserting s.13A IA
What two things should S get if potential claim
Final policy wording + check Proposal Form for binding Ws
When can insured claim damages for insurer’s failure to settle within reasonable time
If insured can prove actual loss, and loss contemplated by parties at time of C
Layher defines ‘may’ or ‘likely’ for circumstances?
‘Likely’
Dawson’s Field Arbitration gave what test for aggregation
Four unities test - locality, time, cause and intention of human agents
Who can PII only be obtained from per SRA
‘Participating Insurers’
What is the minimum limit for PII per SRA
£2/3m
Two kinds of policy coverage, relating to what claims are covered
Claims made or occurrence basis
What should S check the notification relates to
Included circumstances
Why might insurer deliberately waive rights
To preserve goodwill w/ client
What happens if failed to comply w/ notification CP to liability
Insurer can refuse to pay out
Two potential CoIs when acting for insurer + insured
Subrogation (BI of insurer may = settling) and acting for both (e.g. insured’s defence on insurer’s instructions)
In an aggregation clause, what does insured usually want to argue
In favour of aggregation, to avoid paying excess multiple times
Can insurer contract out of 13A IA
Yes, if complying w/ 16 + 17, and not consumer policy
What is an ex gratia payment
Denies technical liability whilst preserving goodwill
What case adopted the four unities test from Dawson’s Field
Kuwait Airways
How was Countrywide decided differently to Lloyd’s
Poor training WAS a single source
When might insurer be in favour of aggregation clause
If in insurance tower and losses likely to be sgnificant
Lloyd’s TSB v Lloyd’s Bank policy wording
Series of 3rd party claims ‘resulting from a single act or omission’ = one claim
What ex gratia payment is usually recoverable under reinsurance C
W/o prejudice only
From when must policy be for s.13A IA to apply
04/05/2017
How can you avoid waiving rights
Expressly reserve rights
Three things notification clause usually sets down
Timeframe to notify, methods and info to provide
Policy wording for Countrywide
‘Single source’ = one claim
What should insurers do if notification of excluded circumstances
Reject notification
What was the decision in Kuwait Airways
One occurrence was the invasion of Kuwait, leading to the destruction of the 15 planes - one claim
