In September 2011 a tool hired from construction engineering company Maccaferri allegedly caused an injury to a third party, yet Maccaferri waited until July 2013 to notify its insurer, Zurich.

Although there was a notification clause in the policy which stated that Maccaferri “shall give notice in writing to the insurer as soon as possible after the occurrence of any event likely to give rise to a claim”, they only notified Zurich when proceedings were issued.

Zurich argued that Maccaferri had failed to notify it of the accident as soon as possible and was therefore in breach of the notification clause.

However, the Court of Appeal found that the circumstances of the accident were unclear prior to the issue of proceedings and there was no evidence to indicate that Maccaferri was aware of at least a 50% chance of a claim against it. Furthermore, it held that the notification clause was ambiguous and therefore had to be interpreted in favour of Maccaferri.

Zurich was therefore not able to rely on the notification clause to deny liability under the policy.

The decision serves as a reminder to insurers that the terms of policies must be very clear in order to have effect.