4.1 Claims: Notifications

Question 1

Decision in Lloyd’s TSB v Lloyd’s Bank

Answer 1

proximate cause was poor advice, nor poor training

Question 2

Two people insured may contact when claim arises

Answer 2

Insurer or broker

Question 3

What basis should all ex gratia payments be made on and why

Answer 3

W/o prejudice to avoid disclosure if litigation ensues

Question 4

What does ‘may’ give rise to a claim mean under Kidson

Answer 4

Real + appreciable possibility, on an objective view

Question 5

What case interpreted the meaning of ‘as soon as practicable’ for notification clauses

Answer 5

Kidson

Question 6

What kind of policy coverage is more expensive and why

Answer 6

Occurrence basis, as exposes insurer to indefinite future liability

Question 7

What are aggregation clauses

Answer 7

Aggregates together different losses to create one claim

Question 8

Kidson on ‘as soon as practicable’ meaning

Answer 8

When insured has sufficient knowledge of possibility of claim

Question 9

Why does 11 IA not apply to notification CPs to liability

Answer 9

Notification CPs relate to risk as a whole, not a particular risk

Question 10

Who will insurer involve first if claim arises

Answer 10

Claims handler

Question 11

What is a claims made policy

Answer 11

Insurer at time of claim/notification = liable, even if circumstance turns into claim outside of policy period

Question 12

Kidson defines ‘may’ or ‘likely’ for circumstances?

Answer 12

‘May’

Question 13

What does ‘likely’ to give rise to a claim mean under Layher

Answer 13

At least 50% chance of claim being made, not just possible

Question 14

What is the general inclination of insurer when claim received

Answer 14

To settle

Question 15

Two cases on wording for circumstance - ‘may’ and ‘likely’

Answer 15

Kidson and Layher

Question 16

What does s.13A IA do

Answer 16

Gives insured right to claim damages if insurer fails to settle within reasonable time

Question 17

What does the difference in decision between Countrywide and Lloyd’s suggest?

Answer 17

‘Single act/omission’ cannot be more remote cause of poor training, but ‘single source’ can be

Question 18

What is an occurrence basis policy

Answer 18

Insurer at time of occurrence = liable, regardless of insurer at time of claim

Question 19

What should insurer do if received notification of claim, but potentially there was a circumstance before claim arose

Answer 19

Check no previous notification of the circumstance

Question 20

What guidelines give minimum standards for S’s PII

Answer 20

SRA Minimum Ts&Cs

Question 21

What case suggested that, for aggregation clauses, ongoing affairs are not a single act

Answer 21

Lloyd’s TSB v Lloyd’s Bank

Question 22

Two alternatives to a waiver of rights

Answer 22

Ex gratia payment or w/o prejudice payment

Question 23

How does SRA limit exclusions/avoidance under PII for Ss

Answer 23

Only allow exclusion for fraudulent party, not for innocent, and cannot avoid in event of fraud

Question 24

What is a w/o prejudice payment

Answer 24

Settlement between parties

Question 25

What do policies include if with same insurer for several years

Answer 25

Retroactive date - cover all claims back to beginning of first policy

Question 26

Kuwait Airways policy wording

Answer 26

Max policy limit for 'any one occurrence'

Question 27

What Act brought in provisions to control insurer's late payment of claims

Answer 27

Enterprise Act 2016, inserting s.13A IA

Question 28

What two things should S get if potential claim

Answer 28

Final policy wording + check Proposal Form for binding Ws

Question 29

When can insured claim damages for insurer's failure to settle within reasonable time

Answer 29

If insured can prove actual loss, and loss contemplated by parties at time of C

Question 30

Layher defines 'may' or 'likely' for circumstances?

Answer 30

'Likely'

Question 31

Dawson's Field Arbitration gave what test for aggregation

Answer 31

Four unities test - locality, time, cause and intention of human agents

Question 32

Who can PII only be obtained from per SRA

Answer 32

'Participating Insurers'

Question 33

What is the minimum limit for PII per SRA

Answer 33

£2/3m

Question 34

Two kinds of policy coverage, relating to what claims are covered

Answer 34

Claims made or occurrence basis

Question 35

What should S check the notification relates to

Answer 35

Included circumstances

Question 36

Why might insurer deliberately waive rights

Answer 36

To preserve goodwill w/ client

Question 37

What happens if failed to comply w/ notification CP to liability

Answer 37

Insurer can refuse to pay out

Question 38

Two potential CoIs when acting for insurer + insured

Answer 38

Subrogation (BI of insurer may = settling) and acting for both (e.g. insured's defence on insurer's instructions)

Question 39

In an aggregation clause, what does insured usually want to argue

Answer 39

In favour of aggregation, to avoid paying excess multiple times

Question 40

Can insurer contract out of 13A IA

Answer 40

Yes, if complying w/ 16 + 17, and not consumer policy

Question 41

What is an ex gratia payment

Answer 41

Denies technical liability whilst preserving goodwill

Question 42

What case adopted the four unities test from Dawson's Field

Answer 42

Kuwait Airways

Question 43

How was Countrywide decided differently to Lloyd's

Answer 43

Poor training WAS a single source

Question 44

When might insurer be in favour of aggregation clause

Answer 44

If in insurance tower and losses likely to be sgnificant

Question 45

Lloyd's TSB v Lloyd's Bank policy wording

Answer 45

Series of 3rd party claims 'resulting from a single act or omission' = one claim

Question 46

What ex gratia payment is usually recoverable under reinsurance C

Answer 46

W/o prejudice only

Question 47

From when must policy be for s.13A IA to apply

Answer 47

04/05/2017

Question 48

How can you avoid waiving rights

Answer 48

Expressly reserve rights

Question 49

Three things notification clause usually sets down

Answer 49

Timeframe to notify, methods and info to provide

Question 50

Policy wording for Countrywide

Answer 50

'Single source' = one claim

Question 51

What should insurers do if notification of excluded circumstances

Answer 51

Reject notification

Question 52

What was the decision in Kuwait Airways

Answer 52

One occurrence was the invasion of Kuwait, leading to the destruction of the 15 planes - one claim