Why is it important that an insured notifies all circumstances during the policy period? What fact, situation or circumstance should I notify to an insurer?
By notifying all circumstances that might give rise to a claim, during a policy period, an insured can get the benefit of their statutory rights under Section 40(3) of the Insurance Contracts Act 1984 (the Act). Section 40(3) provides an insured with statutory rights to notify a circumstance or facts that might arise into a claim against an insured, to an insurer, during the currency of the policy. If a claim eventuates against an insured from the notified circumstances, then the insurer cannot deny indemnity, despite the fact that the claim arose outside the period of insurance. Therefore, any fact, situation or circumstance, which a reasonable person in the insured’s professional position would have thought might result in someone making a claim against them, should be notified to their current insurer.
