Due Diligence Investigations

“This number (224) likely represents just a small fraction of the notice-based denials that never
make their way to a courtroom. More must bedone to educate policyholders on how to comply with their policies’ claims-made reporting requirements. How did notice-based denials under claimsmade forms become so common? To understand how the industry has arrived at this
point, it is important to explore the history and evolution of the claims-made form.
There are six main reasons for these denials.
1.Late reporting of a claim after policy expiration
2.Failure to disclose known claims or potential facts and circumstances that could
give rise to claims later on an application (and not reporting same under the notice
of potential claim provisions)
3.Failure to identify that the current claim being reported is related to a prior claim reported to a previous insurer or previous policy with the same insurer
4.Failure to disclose prior-pending claims made on an insurance application
5.Reporting the claim in a manner that is not as directed by the policy language itself
6.Claims denied for not reporting “as soon as practicable”

The main driver of denials is that the policyholder reported the claim after the policy expired, as represented by 101 denials upheld by the courts. Not too far behind that category is
the situation where the insured knew of a claim or wrongful act before the inception of a policy.
Here is a breakdown of the six categories. … “