Claims Made Insurance Policies – Part 3

Possibly, the most vexing question in the entire scope of liability insurance is what is the definition of a notifiable ‘Circumstance’? In 1975 a meeting of leading PI underwriters was arranged to discuss this question with regard to the forthcoming mandatory insurance of solicitors. The objective was to find a definition that the Law Society could agree to. It never happened.

With the benefit of hindsight, it is not too difficult to see why. By definition, every ‘Circumstance’ that may give rise to a claim is different from the last, or the next. There is no way of defining something which, by definition, cannot be defined until it is identified. Therefore, the question is “what does a prudent underwriter mean by ‘Circumstance that may – or is likely to – give rise to a claim’ and how do we recognise it?”.