Claims made liability policies and claims notification
Notification of event likely to give rise to a claim requires at least 50% chance of claim (UK case)
Patrick Bracher, Director
Norton Rose Filbright South Africa Inc.
The policy obliged the insured to ‘give notice in writing to the insurer as soon as possible after the occurrence of any event likely to give rise to a claim with full particulars thereof’. An employee was injured at work using a gun for attaching wire together on 22 September 2011. At the time of the accident it was not asserted that the manufacturer of the gun was to blame. A letter of demand in this regard was only received by the manufacturer on 18 July 2013. On 22 July 2013 the manufacturers notified their broker of the threatened claim who in turn notified the insurer.
The court held that the phrase ‘likely to give rise to a claim’ describes an event with at least a 50 per cent chance that a claim against the manufacturers will eventuate. The words do not mean that the duty to notify arises when the insured could have discovered with reasonable diligence that there was an event likely to give rise to a claim. The ‘as soon as possible’ requirement applies only after there has been an event likely to give rise to a claim. There was no room for a ‘rolling assessment’.
On the evidence, when the accident occurred involving the gun there was a possibility, but not more, that the accident involved a fault in the gun. There were other possibilities, for instance a fault in the way the gun was used or no fault at all. The likelihood of a claim could not simply be inferred from the happening of the accident and there had not been a failure to notify the event timeously.
(The case is Maccaferri Ltd v Zurich Insurance PLC).
Norton Rose Fulbright South Africa Inc.
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