---
title: "Notification of facts that might give rise to a claim under a claims-made liability policy (section 40(3))"
url: "https://ailawframework.com/precedents/insurance-law/notification-of-circumstances-claims-made-policy"
type: "precedent"
site: "AI Law Framework"
id: "a22-notification-of-circumstances-claims-made-policy"
area_id: "A22"
kind: "notice"
ai_level: "yellow"
version: 1
law_stated_as_at: "2026-10-18"
---

# Notification of facts that might give rise to a claim under a claims-made liability policy (section 40(3))

> A written notice from an insured to its liability insurer of facts that might give rise to a claim, given before the policy period ends so that a later claim is covered under s 40(3) of the Insurance Contracts Act 1984…

Canonical page: https://ailawframework.com/precedents/insurance-law/notification-of-circumstances-claims-made-policy  
Law stated as at: 2026-10-18

Site index for agents: https://ailawframework.com/llms.txt

A written notice from an insured to its liability insurer of facts that might give rise to a claim, given before the policy period ends so that a later claim is covered under s 40(3) of the Insurance Contracts Act 1984 (Cth).

## Key facts

- Kind: Notice. A formal notice to serve or publish.
- Practice area: [Insurance Law](https://ailawframework.com/precedents/insurance-law.md)
- Jurisdictions: Australia
- AI level: Yellow. AI can help in set ways. A lawyer checks specific points before use.
- Law stated as at: 2026-10-18
- Status: Maintained. Checked on 2026-10-18 against the 3 authorities it cites, for Australia.

## When to use it

Use when an insured under a claims-made or claims-made-and-notified policy (professional indemnity, D&O, management liability, cyber liability) becomes aware of an incident, complaint or error that could lead to a claim, and especially before renewal or expiry.

## How AI may be used

AI may draft the notice and the chronology of facts from the client's file and the policy schedule; the lawyer checks the facts, the policy's notification clause and the timing before it is sent.

**AI may:**

- Extract the policy number, period, insured entities and notification address from the schedule
- Draft a dated chronology of the facts from emails, complaints and file notes for the lawyer to verify
- List every possible claimant and the potential heads of loss mentioned in the documents

**AI must not:**

- Must not make admissions of liability or characterise the insured's conduct as negligent or a breach
- Must not omit facts that might later be said to have been known, to make the notice look narrower
- Must not decide that a matter does not need to be notified

**The lawyer checks:**

- The notice is given in writing, to the address the policy requires, before the period of cover expires, and as soon as reasonably practicable after the insured became aware of the facts
- The facts are described with enough detail to identify the potential claim and claimants, without admissions
- The policy's own notification and "circumstances" clause is satisfied, and any other potentially responding policy has also been notified
- The insured has been told not to admit liability, settle or incur defence costs without the insurer's consent

## Authorities

- [Insurance Contracts Act 1984 (Cth) s 40(3) (notice of facts that might give rise to a claim, given as soon as reasonably practicable and before the cover expires)](https://www.legislation.gov.au/C2004A02944/latest/text)
- [Insurance Contracts Act 1984 (Cth) s 41 (insurer consent to settlements and admissions; insured's notice requiring the insurer's position)](https://www.legislation.gov.au/C2004A02944/latest/text)
- [Insurance Contracts Act 1984 (Cth) s 54 (insurer may not refuse to pay by reason only of an act after the contract, including late notification)](https://www.legislation.gov.au/C2004A02944/latest/text)

## Full text and drafting notes

The full text and the drafting notes are not part of this public page. Signed-in firm accounts can read them at https://ailawframework.com/precedents/insurance-law/notification-of-circumstances-claims-made-policy and through the signed-in MCP connector https://ailawframework.com/mcp/firm.

*Practice guidance for planning and review. Confirm current primary sources and the requirements of the actual matter. This is general information, not legal advice.*