The “notice” provision in all insurance policies should be modified to mean notice to a “specific individual”.
Comment: Here is another one of those “missed” clauses. How many times have you heard a client say “I never received the notice”?
Just recently a prospect was explaining to me that they received a letter from a law firm placing them on notice of a potential claim. “Someone” at the front desk apparently signed for the letter but it never reached the person in charge of handling the insurance. A second request was received but months later, which was finally forwarded to the insurance carrier. Unfortunately, the second letter placing the insurance carrier on notice was submitted after the expiration of the prospect’s claims made policy. The insurance company held their position that they would not defend on the basis of late notice because the first letter the plaintiff’s attorney sent was in fact signed for by the insured and they should have placed the carrier on notice at that time. Obviously this was a big problem. One way to avert that from happening is to have the insurance policy state that proper notice/knowledge of claim must go to a specific person before the clock starts ticking.
Another clause to be aware of is the “Time for Suit” language and time frame. This clause places a time constraint on when an insured can bring suit against the insurance carrier; typically it is a one year time period. Here to an insured must be aware of these provisions while thinking through various claim recovery scenarios. While suing the insurance carrier is a “last resort” action, important time parameters such as these must be acknowledged and working into any loss recovery strategy.
Bottom Line: The insurance company knows what every single word of the contract means and how various clauses will work at the time of a loss or claim – make certain that you know how your policies will work in the event of a claim or loss.