---
title: "Notice requiring a liability insurer to state whether it admits the policy applies and will conduct the defence (section 41(2))"
url: "https://ailawframework.com/precedents/insurance-law/section-41-notice-requiring-insurer-position-on-indemnity"
type: "precedent"
site: "AI Law Framework"
id: "a22-section-41-notice-requiring-insurer-position-on-indemnity"
area_id: "A22"
kind: "notice"
ai_level: "yellow"
version: 1
law_stated_as_at: "2026-10-18"
---

# Notice requiring a liability insurer to state whether it admits the policy applies and will conduct the defence (section 41(2))

> A notice from an insured under s 41(2) of the Insurance Contracts Act 1984 (Cth) requiring a liability insurer to say in writing whether it admits the policy applies to a claim and whether it will conduct the…

Canonical page: https://ailawframework.com/precedents/insurance-law/section-41-notice-requiring-insurer-position-on-indemnity  
Law stated as at: 2026-10-18

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

A notice from an insured under s 41(2) of the Insurance Contracts Act 1984 (Cth) requiring a liability insurer to say in writing whether it admits the policy applies to a claim and whether it will conduct the negotiations and proceedings.

## 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 2 authorities it cites, for Australia.

## When to use it

Use when a claim has been made under a liability policy, the insurer has not confirmed indemnity, and the insured needs to settle, make an admission or run its defence without waiting indefinitely for the insurer's position.

## How AI may be used

AI may complete the notice from the claim file and draft the chronology of the insurer's responses; the lawyer decides when to give it, what time is reasonable and what the insured will do next.

**AI may:**

- Extract the policy details, the claim details and every communication with the insurer into a chronology
- Complete the notice fields from the verified chronology
- Diarise the response date and follow-ups

**AI must not:**

- Must not advise the insured to settle, admit liability or make a payment
- Must not state what period is a "reasonable time" for the insurer to respond
- Must not characterise the insurer's conduct as a breach of its duty of utmost good faith without the lawyer's decision

**The lawyer checks:**

- A claim has been made under the policy and the policy requires the insurer's consent to settlements or admissions
- The time given for the insurer's answer is reasonable in the circumstances, for example given hearing or settlement dates
- If the insurer does not answer in time, the insured understands what s 41(3) does and does not protect before acting
- The notice is given in writing to the insurer at the address the policy requires

## Authorities

- [Insurance Contracts Act 1984 (Cth) s 41(1) and (2) (notice requiring the insurer to state whether it admits the contract applies and whether it will conduct negotiations and proceedings)](https://www.legislation.gov.au/C2004A02944/latest/text)
- [Insurance Contracts Act 1984 (Cth) s 41(3) (if the insurer does not answer within a reasonable time, it may not refuse or reduce the claim only because the insured settled, compromised or admitted without consent)](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/section-41-notice-requiring-insurer-position-on-indemnity 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.*