2. Definition of a circumstance
Under this wording, the definition of a circumstance contains ‘information likely to give rise to a claim’. My interpretation of this is that a notification would be accepted even if the client hasn’t made a formal complaint, this wording didn’t contain any exclusions relating to market fluctuations, therefore I believe your precautionary notification should be accepted by insurers.
3. Definition of legal liability
This wording does not contain any exclusions relating to the fluctuation of markets, but under the definition of legal liability cover is provided for any negligent acts in the exercise and conduct of professional business. If there was no error or emission this definition will result in your notification being rejected due to losses from the fluctuating market.
Conclusion
We may see an increased number of notifications due to the social distancing measures currently in place. Advisors will be unable to have face to face meetings with clients as often as usual and there is likely to be more correspondence in writing. Email is less personal and often your clients may be willing to express mild dissatisfaction, it will then depend on what your policy wording states as a notifiable circumstance.
I always advise our clients to err on the side of caution and always notify any circumstance however small it may seem. If you are unsure how your policy wording applies, I strongly recommend that you speak with your broker or a recognised expert as they will be able to answer any concerns you have. In any situation you must be careful to avoid a potential non-disclosure, I advise my clients that the insurer will be put on ‘notice’ and a formal complaint may be forthcoming to remove any chance of late notification.
About Daniel West Cert CII – Associate Director
Associate Director Daniel has been with Apex Insurance Brokers for 5 years and specialises in the placement of IFA and Financial Institution Professional Indemnity Insurance (PI).
As an independent broker, Apex can offer one of the most extensive choices of IFA insurers available, with specialist sector and product knowledge to offer their clients some of the best terms available in the market. Their extensive IFA insurance experience allows them to fully understand your business, advise how to best present your risk and what insurers are best suited to your firm.
