Most insurance policies contain clauses which require the policy holder to supply the insurer with relevant information in the event of a claim. Such clauses normally contain words such as 'within a reasonable period of time'. The question of what is a reasonable period of time arose recently in a case in which an insurer sought to avoid liability under a claim on the basis that the policy holder had not supplied the requested information within a reasonable time. In this case there was a delay of two and a half years.

What was somewhat unusual in this instance was that the failure to provide the information did not prejudice the insurer's position and, at the first hearing, the court found that since the insurer's position was not prejudiced by the failure, the delay could not be deemed to be unreasonable. The insurer appealed.

The Court of Appeal took a different stance, concluding that the insurer had a right to cooperation from the insured and the fact that failure to disclose the information might not prejudice its position was not in point. An insurance contract is one of ‘utmost good faith’ and so the insurer is within its rights to ask for any reasonable information. Furthermore, a material misrepresentation to an insurer may invalidate the policy, even if it is not directly relevant to a claim under the policy.

This case has implications for the management of any insurance claim. Information reasonably sought by the insurer should be provided within a reasonable time, or there is the possibility that a claim may be denied on the basis of the breach.