ADVICE ON WHAT TO NOTIFY UNDER YOUR CFC UNDERWRITING POLICY

2^nd June 2024

ADVICE ON WHAT TO NOTIFY UNDER YOUR CFC UNDERWRITING POLICY

PRASIS Board are grateful for production of this article to Simon Perkins, a Partner at DAC Beachcroft, a law firm associated with CFC Underwriting

What do I have to notify under my CFC Underwriting Policy?

Your CFC policy provides you with important protection, for example, to pay for the costs of specialist lawyers to investigate and represent you in a claim or regulatory proceedings, and to cover compensation and legal costs that you might have to pay to a patient in the event of a claim. The policy is issued by CFC Underwriting on behalf of Certain Underwriters at Lloyd’s, London and Other Insurers.

Like all formal contracts, your insurance policy contains terms and conditions, which you will need to comply with, so as to avoid breaching any terms. One of the most important terms is the requirement that you "notify" (or inform your insurers of) a "circumstance" which may reasonably be expected to give rise to a claim under your policy. You are obliged to notify "as soon as reasonably practicable" and follow any directions of your insurers (subject to the specific terms and conditions of your policy).

The purpose of this is that so long as insurers are notified of potential problems as soon as practicable after you come to know about them, your insurers can work to protect your interests (whether directly or through appointing lawyers to represent you). Equally, if insurers do not know about a potential problem then they can't help you manage it or appoint representatives for you (if appropriate). Whilst you might hope that the problem will resolve itself, or think that your future insurance might be adversely affected by informing insurers of too many incidents, it is imperative that you do notify insurers of anything that may reasonably be expected to give rise to a claim, so that both your interests and those of your insurers are protected.

Guidance

It is generally easy to recognise when a "claim" is made, but less easy to identify when there is a "circumstance" which may be expected to give rise to a claim. A claim could take the form of formal court proceedings, or a letter from the patient or their solicitors setting out a complaint and demand for compensation, especially if described as a "letter of claim" or a "letter of notification". It is also important to note that a claim could be represented in a complaint letter (or even made verbally).

A "circumstance" can be less easy to identify. You could receive a negative review from a patient posted on the internet, or dissatisfaction expressed to you directly which does not demand compensation, but this might amount to a circumstance. Equally, you might become aware of a problem or error that was made in your treatment without the patient having complained at all. You might find out that the patient has been referred for corrective treatment, or has suffered an unexpected adverse outcome whilst under your care.

Do also be aware that you should notify insurers even if you consider the complaint or allegations to be without merit or even spurious, as such allegations will still ned to be defended.

Finally, your policy typically has a condition that you must not admit liability, settle, or make a promise for payment to a patient without your insurers' prior written agreement, so it is important that you properly notify and obtain your insurers' consent for a matter that you would like to promptly resolve.

If ultimately you have doubts over whether to notify a matter, do call the medico-legal helpline and advisers will be at hand to talk through the issue.

PRASIS Board are grateful for production of this article to Simon Perkins, a Partner at DAC Beachcroft, a law firm associated with CFC Underwriting.

June 2024