Determine the Existence of Coverage

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A key obligation of an insurance claims person is to establish, through a thorough investigation with the assistance of the insured and the records of the insurance company, that coverage exists for a loss once it is reported to the insurer. Often, insurers are faced with insureds who fail to report losses promptly. Some fail to report until after an adverse verdict at trial. Courts differ on the proper method of dealing with late reports of loss and claims depending on the policy wording and the law of the jurisdiction.

The insured, who reports a claim late, will always claim that the insurer was not prejudiced by the delay and, as a result, they did not breach the notice condition of the policy.

The Notice-Prejudice Rule

When the Notice Prejudice Rule Doesn’t Apply

The notice-prejudice rule does not apply to a date-certain notice requirement in a claims-made insurance policy. In a claims-made policy, the date-certain notice requirement defines the scope of coverage. Thus, to excuse late notice in violation of such a requirement would rewrite a fundamental term of the insurance contract.