These clauses are sometimes found in policies in the UK but are
more commonly found in other jurisdictions, for example, Singapore.
The effect of such clauses is to extend cover to claims under a
current policy which should have been notified under an earlier
In this case, an insured entered into an agreement in 2008 which
arguably led to it entering into a further agreement in 2010. It
was alleged that the insured had committed certain errors and
omissions. A claim was notified to insurers under a 2013/14
The defendants had entered into consecutive annual contracts of
insurance on similar terms for periods prior and subsequent to the
relevant cover, starting on 9 June 2009.
The policy had a retroactive date clause excluding coverage of a
Claim that was "in any way involving any act, error or
omission" committed before 5 June 2009; a notification clause,
as a condition precedent for coverage; and a continuous cover
clause extending cover to claims that should have been notified
under the prior year's policy. The judge held that the
retroactive date clause did not apply in the circumstances. The
judge also held that a letter from the third party was not a
"Claim" for the purposes of the cover but, even if it
was, it was clear that the terms of the notification clause did
"not take effect to nullify the effect of the Continuity of
Cover Clause." Therefore, insurers would not be afforded this
defence. The whole point of the clause was to extend cover to
claims where there had been a breach of the notification condition
precedent in the prior year; any breach of the condition precedent
would preclude the insured from recovering under the prior year
(and, if insurers did not renew, there would be no cover later on
either). Where insurers did renew on terms which included the
clause, there would be cover for claims which should have been
notified under the prior year.
A court in the United Kingdom refused to remove an arbitrator for perceived bias where the arbitrator was appointed to arbitrate multiple disputes arising from the same underlying incident triggering insurance coverage.
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Ben Crook and Neil Beresford are holding a Breakfast Briefing on Wednesday 26 April 2017 to highlight for insurers the issues arising and practical steps needed in advance of the introduction of a new right for insureds to claim damages...
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