WHEN CAN AN INSURER DENY A CLAIM


By Karen Brain


Denying a claim is a refusal by an insurer to indemnify an insured under the terms of an insurance contract.


Firstly, what forms an insurance contract? It is formed from three types of documents:


1 2 3


The Insurance Schedule


The Insurance Policy Wording Any Endorsement


So, all of these must be read together to understand the terms of an insurance contract.


Therefore, there are many terms in a contract of insurance that may be applied by an insurer for the purpose of refusing to indemnify an insured. Against popular belief of many insureds, this does not mean that insurers claim departments spend their time scrawling through insurance contracts to find a reason not to indemnify a client!


Just to be clear for readers of this article, by indemnify we mean not to defend an insured and/or not to pay out on a claim.


Why are we focussing on these specific named terms? Because breach of such a term could leave you dealing with the claim yourself!


When an insured requests indemnity under their purchased insurance contract, perhaps because a third party is claiming against them for negligence, an insurer will check that there is no evidence, that is facts of the case, that suggests there has been non-compliance by the insured with a condition precedent in the insurance contract that is relevant to the claim. If the facts indicate there has been then an insurer has the right to not provide indemnity for the claim in question. This would mean that the insured would have to deal with the claim themselves.


So, for marine surveyors and marine engineers let us look at some of the condition precedents you may find in a contract of insurance for professional indemnity cover that you must comply with if you wish the policy to indemnify you as an insured.


TODAY WE ARE LOOKING AT CONDITION PRECEDENTS AND THE CONSEQUENCE OF FAILURE OF AN INSURED TO COMPLY WITH A CONDITION PRECEDENT.


THE REPORT | SEP 2025 | ISSUE 113 | 91


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