It can be tempting not to read the small print of your medpal policy, but don’t overlook it. This is particularly important when you need to report a “notifiable circumstance”. Broadly speaking, this is any circumstance of which the insured is aware which is likely to or may give rise to a claim, when evaluated objectively. The risk of a claim should be real or appreciable, but many insurers will define this very broadly in the policy wording and may give examples such as complaints or even requests for copy records, or not attempt to define it at all, putting the insured in jeopardy of later being left without cover if they fail to report or notify the broker about the first circumstance timeously. This is particularly the case with ‘Claims Made’ policies (the norm with medmal insurance) which cover the policy holder for claims ‘made’ in the policy year even where the alleged negligence often occurred a number of years earlier. There will often be a strict time limit for notification.
Best practice is to err on the side of caution and keep your broker fully appraised of any possible circumstances, as failing to notify may be perceived as dishonesty. It is the broker’s role to liaise with the insurer and to ensure that you are not penalised by paying higher premiums at a later date. Once reported, a typical notification clause will contain a provision deeming any claim arising out of that circumstance to have been first made in that policy period. If not, there will be a double jeopardy on renewal of your cover. Mentioning the circumstance only at that time will likely be treated as a prior circumstance outside of your cover, whereas not mentioning it will likely result in the insurer rejecting coverage of the claim if it is later made.
We frequently advise on matters of coverage and can help you with any questions or issues you may have.
If you have any questions on the above, please contact Matthew Trinder or Andrea James for more information.