The Benefit of Continuous Cover with the same Insurer

What is Continuous Cover

Continuous Cover gives cover for claims that have arisen out of a known circumstance and should have been notified to the insurer in a prior policy period. This is providing that the following points are taken into account:

• The current insurer was the insurer at the time the policyholder first became aware of the matter.
• Continuous Cover was held with the insurer.
• If the insurer had been notified of a circumstance, the policyholder would have been covered under the policy in force at that time.
• The claim, nor the known circumstance, was previously notified to any insurer.
• The lesser limit of the two applicable policies will apply.
• Delayed notification may be taken into account in the adjustment of the claim, should the insurer’s position be prejudiced.
• Issues of ‘non-disclosure’ and ‘known circumstances’ exclusions are not raised.
• Fraudulent non-disclosure or misrepresentation does not occur.

Continuous Cover and Section 21 of the Insurance Contracts Act

• The benefits of a Continuous Cover clause do not forgive a policyholder’s overriding legal duty of disclosure under Section 21 of the Insurance Contracts Act (the Act):
• Any policyholder has a duty to disclose every matter that is known and could be relevant to the insurer accepting the risk.
• Section 28 of the Act details the solutions available to an insurer if it could be shown that a policyholder failed to comply with its duty to disclose.