Court ruling highlights importance of notifying insurers of potential PII claims
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An account of a recent case reported on eapdlaw.com, Kidsons v Lloyd’s Underwriters, highlights the importance of notifying one’s insurers of any potential claim under a professional indemnity insurance policy. In this instance, Kidsons, a firm of chartered accountants, were seeking an assurance that their professional indemnity insurance provided cover in respect of any claims made against a wholly owned subsidiary of theirs that specialised in tax avoidance schemes.
Central to the case were conflicting judgements made by two tax counsel on the legality of at least one of the schemes as operated by Kidsons. Over a period of time, Kidsons issued various notifications to their insurers. But were these notifications sufficiently informative to meet the requirements laid down in the original insurance contract?
In the opinion of Mrs Justice Gloster, the first ones weren’t although the final one was. In essence, the ruling appears to suggest that not only must notifications be timely, they must also set out all the relevant facts clearly. There should be no ambiguity about what is being notified.