Unlike assets insurance where the insured is the owner of the property that has been insured, liability-based polices involve damage to third party property, injury to third parties or financial losses suffered by third parties. This means that there are some complications which slow down the claims resolution.
Firstly the insured generally has to wait for the third party hold them (the insured) liable. This generally comes by way of an attorneys letter of demand or a summons to appear in court. Some third parties may wait years before they submit their claims against the insured. In South Africa the injured party has 3 years from the date that they become aware of the injury or loss to bring an action.
Secondly, the claim also has to be quantified and proven by the third party. Depending on the nature of the loss, this could involve medical or forensic reports which can also take some time to produce.
Finally, the claim may proceed to court if the insurers decide to defend the matter or the parties cannot agree on a settlement. This can also take many years.
The notification requirements vary for PI, Liability, Financial Lines, Motor and Personal Accident. It's a good idea to check the claims section of our website or to chat to one of our claims specialists to confirm the specifics.
Most of our policies will insist on the claim being notified as soon as the insured becomes aware that there is an incident that could give rise to a claim under the policy. The insured may be made aware of the loss either by a letter of demand, a summons to appear in court, a formal complaint, a notice of set down etc.
Getting the notification requirements wrong can result in the rejection of the claim. Read this article.