Claims made clause, an escape hatch for the Company

The Italian Court of Cassation (Third Civil Section) has issued an order (published on February 2, 2024) stating the following principle: the Claims Made Clause contained in an insurance policy cannot be considered null and void for the sole fact that it provides that the insured party’s right is forfeited when the third party (injured party) files a claim.

Indeed, according to the Supreme Court, the claim is a future and uncertain event not conflicting with the structure of the casualty insurance, where the coverage depends on an event the insured party is not part of (i.e., the claim).

The case originates from a request for compensation served to a health care company by the family members of a deceased patient who requested the compensation of the damages suffered to the hospital only one year after the expiration of the insurance policy .

In this case, the local health authority (ASL) (who had requested to be indemnified by its insurance company), was ordered to pay the damages (without indemnification from the insurance company), because the claims made clause was not deemed null and void.

As a conclusion, because of the claims made clause, the Insurance Company is not required to indemnify the insured party  when the injured party requests the damages to the insured party after the expiration of the policy.