Notification obligations

Professional indemnity policies are nearly always written on a claims-made basis. Under this type of cover the assured is insured against claims made by a third party in the policy period, and there is usually an obligation to notify insurers of the making of such claims. In addition, the policy will normally provide that the assured is required to notify circumstances which may give rise to a claim, and if he does so then the policy will cover any later claims arising from those circumstances even though the claims fall outside the policy period. In HLB Kidsons v Lloyd’s Underwriters [2007] EWHC 1951 (Comm) Gloster J undertook a minute examination of the purposes and obligations of a notification of circumstances clause. The judgment is considered at length because of the many important issues that it raises with regard to notification under liability policies.