PROFESSIONAL LIABILITY

Claims Reporting-- What, How & When to Report a Claim

Brad Ackles, B.A.
Vice President, The Mitchell & Abbott Group

As discussed in the INSIGHTS magazine in a recent article on "claims-made" policies, you have an obligation to make your Professional Liability insurer (Encon) aware of any circumstance which could reasonably give rise to a claim.

"Claims-Made" policies are designed for application to claims first made and reported during the policy period. As outlined under Part V (Conditions), item 9 (Notice of Claim) of the policy, written notice must be provided as soon as practicable and prior to the expiry date or termination of the policy.

For the BCACC members, the Professional Liability coverage expires April 1^st of each year. Prior to renewal, each participating member receives an application asking them to declare if they are "aware of any facts, circumstance or situations that may reasonably give rise to a claim." If answered "yes", details must be provided and reported so that the claim can be attached to the appropriate policy period.

Even though policies can appear to be "renewals", the Insurers who underwrite each policy may vary from one policy period to the next. Prompt notification will ensure the attachment of the claim to the correct policy period. More importantly, failure to meet these conditions may be considered late notice or absence of notice and could forfeit your rights under the policy.

Here are some guidelines to follow for claims reporting.

There are a number of different situations that may give rise to a claim and should be reported immediately. Some are more obvious than others. Most Professional Liability insurers use the test of what is "reasonable" to determine if you are meeting the claims reporting conditions of the policy. Would it have been "reasonable" for you to recognize a circumstance which could give rise to a claim?

• If a suit is brought, a copy of the Statement of Claim, summons or other legal process.
• If no suit but a demand letter from a clients' solicitor, a copy of the letter, the details surrounding receipt of the letter and a copy of your reply if one was sent.
• Any written notice with allegations of professional malpractice.
• Any written notice with a requirement for you to reply under the BCACC disciplinary process.
• Any verbal complaints or oral threats from clients.
• Any circumstance you become aware of where a third party may hold you responsible for your actions.

Your report should contain copies of all written documents as well as names of potential claimants, specific date and nature of alleged wrongful act, the alleged injury or damage and the details of how you became aware of the circumstances.

The policy requires written notice so you should fax or send a letter directly to Encon or to Mitchell & Abbott.

The policy requires that you report "as soon as practicable after being made aware of a claim". Prompt notification is required and essential in order to provide members with early advice and to ensure that their rights & interests are properly protected. Delay in notification could prejudice the insurers position and impair their ability to defend you.

We do hope this article has provided you with some valuable information and guidelines for reporting claims. If you are unsure as to whether a matter should be reported to the insurer (Encon), please call us for advice and consultation on a confidential basis. As your broker/program administrator, we are here to help you.

Call us toll-free at: 1-800-461-9462.

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