In the case of Kajima UK Engineering Limited v The Underwriter Insurance Company Limited  EWHC 83 (TCC), the Technology and Construction division of the High Court considered the ambit of a notification provision in a "claims made" policy. One of the perceived advantages to an insured of such a provision is that it affords him cover in respect of a claim that arises after expiry of the policy provided that the claim arises out of a circumstance of which the insured became aware during the period of the policy and in respect of which he gave notice to the insurer in accordance with the terms of the policy.
Kajima UK Engineering Limited was a main contractor employed on an affordable housing project. In February 2001, during construction, Kajima notified its professional indemnity insurer, The Underwriter Insurance Company Limited (TUIC), of circumstances relating to the stability of the structure that could give rise to a claim. Over four years after the notification and following further investigation and remedial work in the intervening years, an investigation concluded that the flats were at risk of collapse and a settlement was reached in respect of which Kajima sought an indemnity from TUIC. By this time, the TUIC insurance cover had long-since expired.
The issue in dispute concerned whether, and if so to what extent, the defects and damage which emerged in the period after the notification and after the expiry of the TUIC insurance cover were covered by the February 2001 notification. In his judgment, Mr Justice Akenhead held that the notification was only effective in relation to the specific circumstances which were notified. Akenhead J went on to say that the notification would cover only (i) the defects which caused (ii) the symptoms of, or (iii) the consequences of, the circumstances which were notified in February 2001 and "the notified circumstances could not be expanded by the later discovery of unrelated defects or damage which were not the subject matter of the notification".
This decision provides useful guidance on the scope of notification provisions in these type of policies and highlights the importance of vigilant assessments of claims.