There are increasing reports from The RIBA members that some insurers are looking to deny claims because of late notification issues. Professional Indemnity insurance (PI) rates have reduced significantly over the past few years due mainly to competition but the wordings offered by insurers vary and some policies have high demands in relation to claims notification requiring immediate notice or at best notification as soon as possible. The onus of notification also varies in policy wordings some requiring the notification of a circumstance which may/ might or is likely to give rise to a claim. Some policies demand direct notification to Insurers whilst others will accept notification through the insured's brokers.
Simon Brookes the MD of the RIBA Insurance Agency says "Members should ensure that their policy wording incorporates an innocent non disclosure clause. This gives architects some leeway in the notification of claims. Insurers cannot penalise an insured for innocent late notification unless there is intent to defraud, or if the late notification of a claim or circumstance is seen to prejudice insurers position in which case they would look to adjust the claim settlement to reflect such prejudice.
The PI policy wording arranged through the RIBAIA incorporates an innocent non disclosure clause and allows members of The RIBA to refer any dispute to the President of The RIBA. Although some other policies claim to provide the same referral conditions, The RIBA have made it clear that they will only accept such referrals if the PI policy is placed through the RIBA Insurance Agency. As a very minimum the PI policy should incorporate an Arbitration Clause to deal with disputes but again many PI policies fail to incorporate such conditions.
PI policy wordings vary and members should not always be tempted by the cheapest. At the end of the day if a member has a claim they want their policy to respond. The RIBAIA policy is the ONLY policy recommended by The RIBA itself, that is for a reason, because it is the only policy which incorporates an innocent non disclosure clause, an Arbitration clause and the referral to the President in the case of a dispute".
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