People often think of time limits for bringing claims as something imposed by law, as indeed they are. However, there can be other time limits which apply, including those imposed by contract.
Insurance contracts normally include time limits for making claims and these are often expressed in less than precise wording.
In a recent case, a claim for subsidence was made relating to a retail shop. The policy required the insured to advise its insurers immediately if damage was noticed that might give rise to a claim. The retailer had noticed cracks in the walls in August 2003, but failed to advise its insurers until a year later, by which time the cracking had caused damage to the insured’s fixtures and stock. In the interim period, the retailer had obtained an engineer’s report, documented the damage and informed its landlord’s insurers.
The retailer’s insurers rejected the claim on the basis that they were not notified immediately. The insured argued that it only knew that the damage was caused by subsidence shortly before it made its claim, but the court rejected its argument. It should have notified the insurers as soon as it was aware that a claim might result.
The moral of the story is that if you have reason to think you might have to claim on your insurance policy, make sure you are aware of any applicable time limit on making a claim and adhere to it, or you may find the insurer can reject it.