Kosmar Villa Holidays plc v Trustees of Syndicate 1243 [2008] EWCA Civ 147, [2008] All ER (D) 448 (Feb)
An insurer who begins to deal with a claim, even if he thereby represents that he views that claim at that time as being, if good, a matter for indemnity under the policy, is not thereby required for all time to maintain his dealing with or conduct of the claim.
He can leave it to his insured to conduct a defence, although he may turn out to be liable to indemnify his insured against both liability and the cost of defending liability. Moreover, he may discover matters which lead him to believe that the claim is not within the policy, and it remains open to him to withdraw his support for it.
Thus, where an insured fails to comply with a condition precedent in a claims notification clause in an insurance policy, the insurer does not elect to waive the insured’s failure and accept liability if he initially deals with the claim. Dealing with a claim is not necessarily
