Conditions precedent to liability: Why clear policy wording matters

The recent case of Makin v Protec Security and another [2025] EWHC 895 provides important guidance for insurers on the enforceability of claims notification conditions.

The judgment confirms that appropriately worded policy conditions can operate as conditions precedent to liability, giving insurers an automatic right to repudiate liability for late notification - even in claims brought under the Third Parties (Rights Against Insurers) Act 2010.

Insurers should take note of the court's approach to policy drafting and the consequences of breach.

Background

The Claimant sustained serious injuries when he was ejected from a bar by two door supervisors. During an altercation outside the premises, one of the door supervisors held the Claimant in a headlock. The Claimant subsequently left the scene and took a taxi home. Two days later, he was discovered to have suffered a stroke, which left him with serious neurological disability.

The Claimant brought proceedings against both the bar operator and Protec Security, the alleged employer of the door supervisors. The claim against the bar operator was later discontinued. A preliminary issue trial took place in July 2023, which Protec Security did not attend because joint liquidators had been appointed over the company the day before the trial commenced.

The court found that the Claimant's stroke resulted from an assault by the door supervisor and that Protec Security was vicariously liable for both the assault and the resulting injuries.

QBE was Protec Security's public liability insurer. Given Protec Security's insolvency, the Claimant brought a claim under the Third Parties (Rights Against Insurers) Act 2010 (TP(RAI)A 2010) to enforce his rights directly against QBE.

The relevant policy condition

The policy contained the following claims conditions (conditions 1-10), which were required to be complied with following any incident that may give rise to a claim. The policy stated that breach of these conditions would entitle the insurer to refuse to deal with the relevant claim.

The key provisions

1. Writ, summons, etc.

The insured was prohibited from responding to any letter, writ, summons, or other document sent in connection with any accident, incident, or occurrence that may relate to a claim under the policy. All such documents were to be sent immediately to Sutton Specialist Risks Ltd. unanswered, or to the insurer or its legal representatives, as otherwise advised.

2. Notification of claims

The insured was required to inform Sutton Specialist Risks Ltd immediately upon knowledge of any impending prosecution, inquest, or inquiry in connection with any accident or disease which may be the subject of a claim. Written notice was to be given, along with any further information and assistance required by the insurer, within 30 days of any damage, bodily injury, incident, accident, or occurrence that may give rise to a claim.

The judgment

Protec Security failed to notify QBE within 30 days of the incident and did not forward Letters of Claim received in 2019 and 2020. The court found that Protec Security had breached both notification clauses. The court held that compliance with the claims conditions was a condition precedent to liability, and that the breach gave QBE the right to refuse cover.

Although the point was obiter (given that the condition precedent to liability had been breached), the judge noted that QBE could also have argued prejudice arising from the loss of evidence, fading memories and the non-cooperation of staff.

Implications for insurers

This judgment confirms that clear policy wording linking compliance with claims conditions to the insurer's obligation to deal with a claim can create a condition precedent to liability, without the need to expressly use the term ’condition precedent’.

Breach of a condition precedent to liability gives insurers an automatic right to deny cover without needing to demonstrate prejudice. This principle applies equally to claims brought under the TP(RAI)A 2010, as the claimant's rights against the insurer are no greater than those of the insured.

Insurers should ensure that notification obligations are clearly drafted and that the consequences of non-compliance are made clear to policyholders.