Subjectivities
Conditions attached by the underwriter to a quote or commitment, a risk survey, a signed application, a prevention measure, whose non-fulfillment can suspend or defeat the cover.
Subjectivities are the conditions an underwriter attaches to its quote or line: cover is granted subject to receipt of a signed application, a satisfactory risk survey, installation of a protection system, a reinsurer's agreement, or no losses between quote and inception. They allow a placement to be concluded quickly without waiting for all the information, postponing some checks until after commitment. Their wording decides their effect, and that is where disputes arise. A subjectivity can be a condition precedent, without which cover does not attach; a condition subsequent, which defeats cover already in force; or a mere obligation whose breach opens only a right to revise terms. The contract certainty discipline imposed in the London market requires subjectivities to be identified and cleared within precise deadlines, otherwise the insured believes it is covered when its contract is not. For the underwriter, it is also a selection tool: a demanding subjectivity quickly reveals the candidates who will not be able to meet it.
Textbook case: a cyber underwriter grants a line subject to multi-factor authentication being deployed on all remote access within 30 days of inception. On day 45 it is not; ransomware enters through an unprotected remote access point. Depending on whether the subjectivity was drafted as a condition precedent or as a mere obligation, the loss is excluded or merely the occasion for a revision.
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