Notice of circumstances
A notification, under a claims-made policy, of facts that might give rise to a future claim, which attaches that claim to the current policy even if it arises after expiry.
Under a policy triggered by the claim, it is the date on which the third party makes its claim that determines which policy applies. An insured that learns an incident might one day lead to a claim, before any is made, is in a delicate position at renewal: if it says nothing, the new insurer will exclude this known fact; if it changes insurer, the old one will not cover a claim made after expiry. The notice of circumstances solves the problem by letting the insured notify, during the policy period, facts likely to give rise to liability; any claim that later arises from them is then attached to that policy, whatever its date. Policies generally require a precise description, dates, persons involved and the nature of the possible harm, and reject overly vague notices that look like a precautionary inventory. The mechanism is central in directors' liability, professional liability and cyber, where a security incident discovered at the end of the period can produce claims for years.
Textbook case: three weeks before its cyber policy expires, a company discovers that a vendor exposed the data of 50,000 customers, with no claim yet made. It notifies the circumstance to its insurer. The actions brought by customers eighteen months later attach to that policy, even though the company has changed insurers in the meantime.
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