What is a consequence of failing to report a claim to the excess carrier in a timely manner?

Failing to report a claim to the excess carrier in a timely manner can lead to the imposition of a potential penalty by the excess carrier. Most excess insurance policies contain clauses that require policyholders to notify the insurer promptly about any claims that may exceed the limits of the primary insurance. When claims are reported late, the excess carrier may view this as a breach of the policy conditions, which can result in various consequences, including penalties.

These penalties can vary depending on the terms outlined in the policy, and they could manifest as the denial of coverage for the claim or additional costs incurred due to the delay. Timely reporting is essential not only to ensure proper claims handling but also to maintain a favorable relationship with the excess insurer, which relies on this information to evaluate potential liability and exposure.

Being aware of and adhering to reporting timelines is crucial for ensuring coverage and minimizing risks associated with delayed notifications, which can disrupt proper claim management.