by Brian Cullen, Associate Director
Are you aware that as an Insured you have a contractual obligation to report incidents that could lead to claims under your insurance policy?
Every insurance policy requires the Insured to provide the Insurer with timely notice of incidents, and each policy outlines when and how claims must be reported. The exact policy language may vary, and phrases such as “promptly”, “immediately”, “as soon as is reasonably possible”, or, in some cases, “not later than 48 hours after the event”, are quite typical. Adherence to this condition, no matter how small the claim may appear to be, is a requirement of your policy.
Occasionally the Insured may decide to handle incidents internally and avoid reporting a claim under their policy. This might be well intentioned but any delay in reporting may create problems further down the line. In the event that legal proceedings are issued, and the Insured has not complied with the conditions of their policy, the Insurer’s position may be prejudiced and they may refuse to handle the claim. Therefore it is highly recommended that you report all incidents in order to protect your rights under your policy.
In the case that you feel the incident is less likely to lead to a claim settlement under your policy, then an incident may be reported as “notification only”. By reporting as “notification only”, you will have met the reporting requirements of your policy condition.
In addition to meeting your policy’s conditions, there are many benefits to prompt reporting, which include:
- Allows the Insurer to start handling the claim immediately leading to a quick determination of liability.
- Allows for a thorough investigation while the facts are still fresh.
- Ensures that legal requirements are met and helps to minimize any potential litigation.
- Early intervention reduces the total cost of claims and can help lead to an early and economical settlement.