Late notification of a fleet accident

The clause is a post-loss notification condition in a non-consumer policy. At common law, breach of a condition precedent can entitle an insurer to decline even without prejudice. The Insurance Act 2015 changed that for non-consumer contracts. The Act's claims provisions prevent an insurer from relying on a post-loss notification term unless the breach has prejudiced it; the insured must show that non-compliance did not prejudice the insurer. That is the battleground here. Northern Cover asserts prejudice: it says it lost the chance to inspect the third party's vehicle and obtain early medical evidence. But the vehicle has been repaired, so inspection may already have been impossible after the accident; repair invoices and photographs may exist. Medical records exist, and the third party's claim has only recently been presented. The insurer must particularise what it could and would have done differently in the 14 days. A general assertion of prejudice is not enough. If the insurer cannot show actual prejudice, it cannot rely on the clause. If it can show prejudice, the clause may be enforceable and the claim can be declined. The outcome is therefore evidence-dependent, not automatic. Harlow should demand the insurer's prejudice evidence and provide its own evidence.

The broker owes a duty to exercise reasonable skill and care, including explaining conditions that could defeat cover. A 14-day accident notification condition is unusual and important, so merely supplying a policy summary may not be enough for a commercial client with 12 vans. The broker's statement 'we'll handle claims' may have created an understanding that reporting to the broker was sufficient, although the broker did not say it would notify the insurer. However, Harlow is a commercial insured with its own transport manager. The manager knew about the accident and chose not to report it. Even with clear advice, the company might still have failed to notify, so causation is not straightforward. The broker may be liable for a contribution, reduced for Harlow's contributory negligence, rather than for the whole loss. The broker should notify its professional indemnity insurer, preserve the file, and consider a without-prejudice settlement. FCA Principle 7 (clear communication) applies, but the Consumer Duty does not because Harlow is not a retail customer. The Financial Ombudsman Service is unlikely to be available because Harlow is not a micro-enterprise. A complaint to the broker and, if necessary, a negligence claim are the realistic routes.

Steps:

• Give the insurer a formal written notification and ask it to reconsider, setting out why the delay caused no prejudice: the internal log, driver statement, photographs, repair invoice, and the third party's medical records.
• Ask for the insurer's specific prejudice evidence and the policy wording, including the notification condition and any claims cooperation clause.
• Do not correspond with the third party's solicitor without the insurer's agreement; pass all correspondence to the insurer.
• Complain to the broker in writing and ask for its file and advice records; notify the broker's professional indemnity insurer if a negligence claim is likely.
• Preserve all evidence and witness details; the driver may have left.
• Review internal reporting: a 24-hour rule for all accidents, a named claims contact, and a diary reminder.
• If the insurer maintains denial, take legal advice on a claim against the insurer and/or broker. The company should also check whether the third party claim is covered by the Road Traffic Act compulsory insurance if the insurer declines; the Motor Insurers' Bureau may be relevant only in limited uninsured scenarios, not here.