All insurance policies require prompt notification of claims. Why is that? Insurance is a transference of risk. In exchange for payment (called premium), the insurer takes on the risk of having to pay if something bad happens to you. But your insurer will not know something bad happened until you tell them about it. If you delay telling your insurer, the cost to fix the problem might increase or the insurer might lose the opportunity to mitigate the consequences of that loss. The insurer has the right to refuse to pay the claim or part of the claim if your delay caused them prejudice.
So, when should you notify your insurer?
- For house, car and contents claims – as soon as possible after damage or loss happened and before you incur any expense other than the reasonable cost of urgent work to prevent further loss.
- Health insurance – always check with your insurer before you incur any costs to make sure it is covered by the policy.
- For public liability claims – immediately after you become aware of a situation that could give rise to a claim. Do not wait for a claimant to make a formal claim against you, act promptly.
- For statutory liability claims – immediately after you become aware of a situation that could give rise to a prosecution or proceeding against you or your company. For example, if there has been a workplace accident, you should notify your insurer on the same day and seek their guidance before meeting with the regulator.
- For professional indemnity claims – immediately after a claim has been made or you become aware of circumstances which may have the potential to subsequently give rise to a claim against you. For example, if you discover you made an error and gave a client incorrect advice, this could be a circumstance that could lead to a claim and it is something that you should let the insurer know immediately.
- For Cyber claims – as soon as you become aware of something that could give rise to a claim under the policy, regardless of whether you believe the quantum is under the policy excess. So, for example, if your system has been hacked, let your insurer know immediately even if you believe you can easily fix this with the help of your local IT support.
- Employment Disputes claims – when you become aware of circumstances that could lead to a claim. Some employers notify when they go through a restructure or when an employee threatens a personal grievance.
If you are unsure, it is better to err on the side of caution and notify. Most policies require you to obtain prior approval before costs are incurred so check with your insurer first. We recommend that you become familiar with the requirements of your policy.