When do we know 'when' to make a notification of a claim. What is the process?
‘Notify early and notify often’ once you have reason to believe that a claim might be made against you. Best to err on the side of caution.
How do we make a notification. What is the process?
Put it in writing to Accountancy Insurance setting out all relevant matters of which you are aware, in detail, attaching all relevant documents. A completed Accountancy Insurance claim form is a good starting point.
Is there any conflict of interest between the lawyer representing the insurance company and us?
Conflicts of interest can arise in these circumstances. They are therefore managed by obtaining your informed consent to the lawyer’s appointment and by providing you the opportunity to seek independent legal advice, should you wish to do so at your own expense.
What if the instructions from the insurance company differ from our strategy? For example, what if one party wants to settle the claim and the other party wants to defend the claim?
These issues are often managed through proactive and transparent communication between the insurance company, yourself and lawyer. In most cases, the insurer has the right to conduct/control the claim, and you have the opportunity to participate/cooperate. In certain cases, the parties may look to invoke a ‘Senior Counsel clause’ (whereby advice is sought from Senior Counsel on the progression of the matter) or the insurance company may invoke a ‘hammer clause’ (whereby you are allowed to continue to defend the action, but the insurer’s liability is limited to the amount for which the claim could have been settled).
If the claim is not covered under the policy, who bears the lawyer’s costs incurred in relation to the claim up until that point?
As a general rule, in the event that indemnity is not available to you, the insurance company will bear the lawyer’s costs incurred in relation to the claim up until that point.
When does a costs inclusive excess come into effect in the defence process?
As a general rule, a costs inclusive excess will be eroded by defence costs following a grant of indemnity (confirmation that the claim is covered under the policy). The excess will not be eroded against those costs which relate to the determination of indemnity, as such costs are borne by the Insurance company.
What if a lawyer appointed by the Insurance company does not specialise in a certain area which requires specific knowledge?
Insurers panel lawyers have been selected due to their skill, training, experience and expertise in particular areas. Your insurer will therefore ensure that the appointed lawyer has the relevant knowledge to act in the matter and has a thorough understanding of the insurers policy wordings.
What is the first step?
If you are aware of a circumstance which may give rise to a claim, contact the Professional Risks team at Accountancy Insurance on 1300 552 867. We will guide you through the whole process from notifying the Insurer to liaising with Lawyers on your behalf.