What is a written demand for damages or relief?

Patrick Bracher from Norton Rose Fulbright.

A professional indemnity policy required the insured to give notice to the insurer of any ‘written demand for monetary damages or non-pecuniary relief’. A letter from solicitors reserving rights to pursue a claim and expressing the view that there was a strong claim against the insured was held not to be a written demand and therefore there was no late notification.

While the letter expressed the view that there was a strong claim against the insured, the purpose was to agree a protocol for swift and effective recovery of the loss from a third party, not to assert or expand a claim against the insured.

In that context, the solicitors’ letter made it clear that rights against the insured were fully reserved and any step taken to recover from the third party was not to be seen as a waiver. The request for an agreement to fund the recovery strategy was not a written demand for monetary damages or non-pecuniary relief and it was therefore not a reportable letter in terms of the wording of the policy.

This is obviously different from an obligation to report events likely to give rise to a claim.

[The case is ARC Capital Partners Limited v Various Insurers [2016] EWHC 141 (Comm)]

First published by Financial Institutions Legal Snapshot.