CR133 Disability – Notification of claim – claimant’s knowledge of cause of claim is prerequisite.

CR133

Disability – Notification of claim – claimant’s knowledge of cause of claim is prerequisite.

Background

In terms of the provisions of a group policy it was required that – “The insurer* must be notified in writing of any event which may give rise to a claim, within 3 (three) months of the happening of the event. The Insurer* will not be liable to pay a benefit in terms of this policy until such notice has been received. Failure to notify The Insurer* within the stated period may, at The Insurer’s* discretion, invalidate the claim.” (* Own edit – The Insurer for name of insurer).

The insurer in respect of this contract relied on this provision to deny liability on the ground that it was notified of the claim more than 4 months after “…the last date of active service…”.

The insurer emphasized that a primary reason for provisions limiting the time within which claims are to be notified and/or submitted is to avoid the possibility that an insurer may be prejudiced by late notifications/submissions of a claim – inter alia in that it may be deprived of the opportunity to properly investigate causes of disability or to recommend appropriate treatment at an early stage.

The date which the insurer used to calculate the 3 month period within which it had to be notified was, in fact the last day that the insured was actively at work. His initial absence from work was supported by a medical certificate from his general practitioner who “booked him off” for depression and anxiety as a result of work-related stressors. A sedative, an anti-depressant and one month’s sick leave was prescribed. At the end of that period, he was referred to a psychologist who continued treatment to which he initially responded favourably, but experienced a setback after which he was referred to a psychiatrist. The available information confirmed that it was only at this stage that the treating practitioners indicated a possibility that he would not be able to resume his occupation. The medical certificates and reports prior to that date, confirm opinions that the insured would be able to resume duty on dates specified on such certificates.

Discussion

The clause on which the insurer relies imposes an obligation of notification to the insurer of “…any event which may give rise to a claim…”.

Our perception was that it would not be reasonable to interpret this obligation to apply to the occurence of any event if the person on whom the obligation is imposed, was not or could not reasonably have been aware at the time of the occurence that it may give rise to a claim.

The symptoms experienced and conditions diagnosed were in our opinion not such that it reasonably implied knowledge from the first day of absence from work that it might give rise to a claim. The overall impression was that it was considered to have been a temporary reaction to work related stressors which would be alleviated by treatment and temporary sick leave. The time when the assured was referred to a psychiatrist and when the probability that his debilitating symptoms might continue indefinitely, could equitably be considered the time when the obligation to notify commenced.

Result

The insurer accepted this interpretation in the light of the specific wording of the contract. The matter was settled in that an ex gratia payment was made.

EdB
April 2006