Blanket Notifications: The Comfort Factor

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Summary: The English courts are sympathetic to block notifications of circumstances. That, at least, appears to be the conclusion to be drawn from the recent Court of Appeal decision in European Risk Insurance Company HF v McManus & Ors [2013] EWCA Civ 1545.

The English courts are  sympathetic to block notifications of circumstances.  That, at least, appears to be the conclusion to be drawn from the recent Court of Appeal decision in European Risk Insurance Company HF v McManus & Ors [2013] EWCA Civ 1545.

The decision provides a considerable comfort to Insureds that a blanket notification of circumstances will be sufficient to fix insurers on risk at the time with liability for claims which subsequently arise from those notifications, however vague the current information may be.  The notification letter here was clearly drafted with some precision, and although the Court left over for future consideration the question of  coverage for actual claims until they materialised, the notification letter did achieve the main objective from the Insured’s point of view, so that any claims would fall within that insurance year.

Whilst Insurers probably cannot change the terms in policies written for solicitors on the Minimum Terms and Conditions (which contain a mandatory definition of a circumstance), other  policies can and do set out pre-requisites for a circumstance to count as a valid notification, including information regarding the potential claimants, the relevant facts and basis for liability, and the amounts likely to be involved.  A blanket notification without any detail given where there is such additional wording might well not meet the relevant conditions for a valid notification. Insurers need to review all notifications on receipt for compliance with policy terms, rather than just file them away until a claim develops.

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