Claims cooperation clause

A claims cooperation clause obliges the cedant to notify claims above a threshold without delay, to pass on documents, and to consult the reinsurer before any material settlement. It stops short of control: the decision stays with the cedant, which must listen but need not comply. The problem it solves is late information, which denies the reinsurer any chance to act usefully, to reserve correctly and to adjust its own retrocession. It is the usual middle ground between a follow the fortunes clause, which binds the reinsurer to the cedant's decisions almost blindly, and claims control, which dispossesses it. The sensitive point is the sanction: depending on the drafting, failure to cooperate forfeits the right to recover outright, or only entitles the reinsurer to damages for the prejudice caused. The first version is formidable, since it turns an administrative oversight into an outright loss of cover, and arbitrations on the point are numerous.

A cedant notifies a 8 million euro construction claim in 2026, eighteen months after receiving the writ, where the clause required notice within thirty days. The reinsurer pleads forfeiture. The arbitral tribunal reads the wording as carrying a proportionate sanction and reduces the recovery by 900,000 euros, the extra defense cost caused by the late notice, instead of striking out the whole 5 million above the retention.

Claims cooperation clause, Coopération sinistres, Clause de consultation, Claims cooperation