There are a number of practical reasons why all circumstances and claims should be notified to PI insurers as soon as possible:
1. It will avoid policy problems
Any unreasonable delay, even if not over a renewal, can result in PI cover being jeopardised if the insurer suffers any prejudice. As an example if a business has a clear and reasonable opportunity to prevent or resolve a claim that insurers are unaware of but fails to take this opportunity without good reason, any later costs and any increase in the size of the claim may not be covered by PI insurers. If the PI insurers are aware of the claim and opportunity to resolve it but allow the business to miss it the cover would not be affected. From a legal perspective the prompt notification of circumstances will provide a business with statutory protection that is not available after expiry of the policy. This is invaluable if a circumstance later escalates into a serious claim.
2. Insurers may be able to assist
Most PI insurers and claims management companies such as DCS Asia Pacific are highly experienced in how to mitigate and manage claims against a business. In the vast majority of files the business is insured and the insurer and insured business have the same vested interest in seeing the claim resolved on the best of negotiated terms. It rarely benefits any business (outside of solicitors) to be involved in long and protracted legal proceedings. DCS Asia Pacific places great importance on efforts to resolve claims at an early stage minimising the financial, managerial and reputational impact of the claim on the insured business. Together we will work to try and ensure that the business retains the claimant as a client and will often sit in the background so that the business gains credit with a client for resolving a justified complaint quickly and calmly.
3. The ramifications of the claim may be wide spread
In a number of scenarios there are other parties and/or other insurers who may be culpable or errors that are alleged against one business. Once PI insurers are notified they will quickly identify and act if such a scenario arises. Since all PI insurers will have the same requirements regarding prompt notification it is equally essential that the other parties also notify their insurers. No business wants to be in a position where the truly culpable party has no PI cover as they were not pushed to notify the claim to their own insurers. In the case of Authorised Representatives, subsidiary companies or satellite offices there may be policies held by group or parent entities that require notification by them.