When reading the fine print of almost any insurance policy, one will see a host of often daunting insurance policy conditions. Almost all insurance policies, including liability, crime, kidnap and ransom, and property insurance policies call for “notice” of claims within a certain period of time.
Additionally, many insurance policies, such as property or crime policies, call for the filing of a proof of loss within a set amount of time and also may require that any suit against the insurance company for its failure to pay a claim (in part or in full) must begin within a reduced statute of limitations period-sometimes as short as 12 months. Such a provision may even be found in a liability policy, although this is rare.
Policyholders should be careful with these time-sensitive provisions as insurance companies often seek a complete forfeiture of insurance coverage when arguing that the policyholder failed to comply with them–even where no harm to the insurance company has resulted.
This article also appeared in The National Law Review (May 9, 2011).