Julian Miller and Parminder Badhan emphasise the importance of complying with notification provisions in insurance policies
Under a claims-made insurance policy, the insurer is liable for claims made against the insured by a third party during the policy period. A notification provision, which is a key feature of all claims-made policies, allows the insured to notify its insurer when it becomes aware of circumstances that might later give rise to a claim. Subsequent claims arising from the circumstances notified are then covered by the policy.
The scope and operation of notification provisions in claims-made policies has not always been entirely clear. Two High Court cases, HLB Kidsons (a firm) v Lloyd's Underwriters subscribing to Lloyd's Policy No 621/ PKID00101 [2007] EWHC 1951, [2008] 2 All ER 769, and more recently, Kajima UK Engineering Ltd v Underwriter Insurance Co Ltd [2008] EWHC 83, [2008] All ER (D) 194 (Jan), provide clarification.
HLB Kidsons (a firm of accountants) had received claims arising from tax avoidance schemes. It argued
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