Understand the general principles in the claims handling process.

a. Introduction:-

i. The claims department is the show window of the insurance company

ii. Insurer is the custodian of pool of funds for ALL insureds

iii. Both parties have an obligation to behave responsibly

b. Describe the legal requirements for a valid claim.

i. Onus of Proof – Insured:-

1. Loss occurred from a peril insured under the policy

2. Provide an estimate of the loss

ii. Exceptions in respect of Liability claims, insured still needs to prove a valid claim

but the insurer will handle all negotiations and pay the third party directly

iii. Only the courts will decide liability and quantum, unlike for property claims where the insurer decides.

iv: Onus of Proof – Insurer

1. If an insurer rejects a claim, the burden of proof now shifts to the insurer

c. Other requirements: –

when a claim occurs, the insurer will need to check:

1. Was cover enforce at the TIME of the loss or when the claim was made?

2. Is the insured the same person covered in the policy or entitled to indemnity under the policy?

3. In the peril or event covered by the policy?

4. Has the insured taken reasonable measures to mitigate the loss?

5. Have all conditions and warranties connected to the policy been complied with?

6. Has the duty of Fair Presentation been compiled with in respect of commercial insurance and the duty to take reasonable care not to make a misrepresentation in respect of consumers?

Policy Conditions:-

a. They can be implied or expressed

i. Implied are usually the common law principles of insurances (eg: Insurable Interest &

Insured taking reasonable measures to mitigate the loss)

ii. Expressed are usually stated in the policy document.

b. Three types of conditions:

i. Precedent to contract

ii. Subsequent to contract

iii. Precedent to Liability

c. Breaches of policy conditions relating to claims.

i. Void – cancelled Ab Initio, usually for fraud. IA 2015 (warranty, automatic suspension)

ii. Voidable – will not pay a particular claim but will keep policy enforce.

iii. CIDRA 2012 (Insurer cannot avoid paying a claim where breach was not related to
claim)

iv: Consumer Rights Act 2015:-

a. Transparency (renewal terms as well as any notices)

b. Prominent Terms (policy contract in general, no hidden or unfair terms eg: