Claims

Property insurance claims

An insurance claim arises when a policyholder invokes its contractual right under an insurance policy to be indemnified in respect of an insured loss.

In the case of property insurance, the occurrence of an insured loss typically requires insured property to have been physically lost (eg theft) or physically damaged by operation of an insured peril, such as fire.

For further guidance on the meaning of ‘damage’ in insurance, see Practice Note: Meaning of damage in insurance.

Liability insurance claims

For liability insurance, by contrast, an insured loss occurs when a policyholder ascertains a liability to a third party pursuant to a judgment or tribunal award or a settlement with the third party. Since potential liabilities are typically less certain than physical loss or damage, liability policies require the policyholder to notify its insurer on becoming aware of circumstances that may give rise to a claim. Compliance with notification provisions in liability policies is very important as failure to do so may result in a loss not being covered—particularly if the requirement to notify claims and circumstances is expressed in the