N
NOTICE OF CIRCUMSTANCES THE INSURANCE CLAIM YOU NEED TO KNOW ABOUT.
Managers may be unaware of certain
that period. With a Notice of Circumstance
steps an association can take to protect its
tender, however, the association may
rights as it relates to an expiring insurance
preserve its rights before the policy period
policy. Often insurance policies have certain
ends and coverage, under that policy, is
reporting requirements to make a claim for
terminated.
a covered loss. These often state that claims
By Seema N. Kadaba and Cassie N. Holloway
for acts occurring during a policy period
If a Notice of Circumstance is tendered
must be made before the policy expires.
during the policy period and a claim is later asserted after the policy period has
However, many policies also contain
ended, but arising out of the circumstance
a provision known as a “Notice of
described in the Notice of Circumstance,
Circumstance.” This provision is often
then the insurer must treat the claim as
included as a way of extending coverage for
if it were timely made when the Notice of
events that may produce a claim at a later
Circumstances was tendered. The purpose
date, as long as the notice of the change
behind this is to allow an association to
in “circumstance” is given to the insurer
file an anticipated claim that may not
before the policy expires. This type of
come to fruition until the policy period is
notice is not a claim for money, but rather
over and the insurer adjusts the policy to
a claim to reserve the association’s rights
exclude what may have been covered in the
to later tender a claim under an expiring
previous policy.
policy when it does not have sufficient
12 The Law Journal Winter 2020 | cacm.org
information on whether its current situation
This is particularly applicable in current
will ripen into a formal claim.
times. At this moment, associations do not know what claims may arise against
WHY CONSIDER A NOTICE OF
it or the board related to the COVID-19
CIRCUMSTANCES CLAIM
pandemic. A claim could arise that the
If certain claims are not made by the date
board handled something incorrectly
when an insurance policy period ends,
during the pandemic and the association
the association will be prohibited from
should not lose the opportunity to file a
asserting those claims that occurred during
claim with the policy that may currently
