What is the difference between a claim and a notification of circumstances which might give rise to a claim?
A claim is usually defined in an insurance policy and is easily recognisable. A claim can mean a written or verbal demand for civil compensation or damages by a third party against you. Examples of a claim include: a statement of claim, letter of demand, writ, summons, application, cross-claim, counterclaim or a notice of claim issued pursuant to the Personal Injuries Proceedings Act 2002 in Queensland. Depending on the policy wording, a complaint made about you to the Office of the Health Ombudsman and/or Ahpra about your conduct in your capacity as a dentist could be considered a claim. You are advised to refer to your insurance policy for the definition of a ‘claim’.
A circumstance can be an incident, situation, fact, occurrence, or matter that you reasonably believe may give rise to or potentially result in a claim being made against you. For example, you are aware that you made an error in a procedure or you are aware of a deficiency in the service you rendered, or the patient expressed dissatisfaction or made a complaint regarding your treatment/conduct to you or the practice (but has not demanded compensation).
Do I have to tell the insurer of a notification of circumstances that might give rise to a claim?
It is important that you notify your insurer in writing as soon as practicable upon becoming aware of any facts or circumstances that might give rise to a claim against you. You should speak to the ADAQ Compliance and Advisory Services team and they can assist you in providing the notification of circumstances to your insurer. If you fail to notify your insurer of facts or circumstances that might give rise to a claim, and in a subsequent policy period, a claim is made against you arising out of the fact or circumstances, your insurer may decline to cover your claim on the basis of a ‘prior known facts and circumstances’ exclusions. It is particularly important if you change insurers that you notify the outgoing insurer of all facts and circumstances that might give rise to a claim as the new insurer may not cover you for prior known facts and circumstances.
If you decide to tell the insurer of a notification of circumstances, the notification should contain all information which contributed to your reasonable belief about the potential emergence of a claim. In your notification, you should specify the relevant incident, facts and parties (and avoid vague language) so that it becomes identifiable to your insurer.