What to do in the event of a Professional Indemnity, Directors & Officers or Financial Lines claim…

There are strict criteria to be observed around notification of a Professional Indemnity, D&O or other financial lines claim.

The most critical risks to a business are those that impact the company’s financial health and wellbeing and claims intimated under the Professional Indemnity, Director & Officers and other financial lines sections of cover can have a significant impact.

As such, there are strict criteria to be observed around notification of a potential claim.

It is vital that insurers are notified of any complaint or dispute which may give rise to a claim immediately after the policyholder becomes aware. At this point, the policyholder should temporarily refrain from dialogue or correspondence with the third party or their representative to avoid prejudicing their right to indemnity under the contract of insurance.

These types of policy generally operate on a ‘claims made’ basis and as such, a notification can only fall to the current period of cover. For example, a claim arising from a 2014 dispute cannot usually be notified against a 2017 policy.

Disputes brought under these types of cover are recognised as complex and often highly sensitive. Insurers will wish to understand the full facts of the dispute and allegations before accepting the notification and may call for the policyholder’s files for review before offering any guidance.

Once Insurers have conducted their review they will either:

  • Instruct legal representation for the policyholder, or
  • Ask the policyholder to prepare his draft response to the allegations which once approved, may be issued.

Important: Insurers rarely agree instruction of legal representation outside of their approved panel of solicitors and so, it is wise to refrain from approaching your own advisers without their approval as any fees incurred in doing so may not be covered by the policy.

Equally important is the fact that Insurers will not wish the third party or their representatives to be aware of their involvement or of the guidance being provided.

For assistance with notifying a claim against your policy, please contact your dedicated Claims Executive or call 02920 853788. Alternatively, you can email information to claims@thomas-carroll.co.uk.