The policy under consideration in this judgment contained a Claims Conditions section and recordal that “Breach of these conditions will entitle us to refuse to deal with the relevant claim.” 

It was not expressly recorded that compliance with the claims conditions was a condition precedent and the words “condition precedent” were not themselves used. The phrase “Conditions Precedent” was used in other parts of the policy.

The insured argued that the terms of the Claims Conditions lacked the clarity that would be required to render them conditions precedent in the context of a policy that elsewhere made compliance with terms a condition precedent to the insurer’s liability.

The insurer agreed that the conditions relied on were not labelled as conditions precedent but that the “breach of these conditions…” recordal made it clear that there was a conditionality between the obligation to give notice and the insurer’s obligation to pay.

The court said there are good policy reasons why an insurer should wish notification obligations to be a condition precedent to its liability.

As well as the potential benefits that may come from dealing with a claim that is notified as soon as possible, there is a practical benefit to an insurer in avoiding the kind of arguments that were ventilated in the case at hand as to whether late notification had in fact prejudiced the insurer. 

The court said that, in the case at hand:

“…the contents of the clause are certainly capable of being construed as conditions precedent but, as the Third Defendant concedes, the label is not there. In the absence of any label, is the court able to conclude that these are necessarily to be treated as conditions precedent?; or alternatively is there sufficient ambiguity to lead to a position where, applying the contra proferentem principle of construction, the court should hold that the clauses do not have the force of conditions precedent?

…, the relevant conditionality here is said to be found in the statement that breach of the Claims Conditions “will entitle us to refuse to deal with the relevant claim.” The Third Defendant points out that the term used by those who drafted the policy is “will” not “may.” But the fact that a breach of the condition leads not to automatic refusal of indemnity but rather to the insurer having a right to refuse indemnity might be taken to suggest that there is some further process interposed between the non-compliance with the Claims Conditions and the refusal of indemnity. The Third Defendant could have avoided this position by expressly stating that compliance with the Claims Conditions was a condition precedent. It did not do so, even though other clauses in the policy were so worded.”

The court concluded:

“…I am not persuaded that there can truly be said to be ambiguity here given the use of the word “will” in the context of the insurer’s entitlement introductory section of the policy under the heading “Claims Conditions.” It still does an injustice to that language to conclude that non-compliance with the Claims Conditions gives the insurer merely a discretion to decline indemnity. Whilst the insurer may not always refuse indemnity, even where there is a breach of the Claims Condition (perhaps because the breach is not even arguably prejudicial to the insurer, …, to say that a particular set of circumstances “will entitle” a party to act in a certain way does not contain within it the implication that there is some contractual limit on the party to take that action. Moreover that consequence is not undermined by the failure to label the Claims Conditions as conditions precedent – the true meaning of the language is clear even without that label.”

The court held that there was no ambiguity and compliance with the Claims Conditions was a condition precedent to the insurer’s liability. On similar wording, the outcome should be no different in result under South African law principles. It is always useful to ensure that where steps are required to be taken by the insured there is a clearly recorded consequence for an omission to do so. However, the ”Breach of conditions” clause commonly adopted is badly worded and will not help.

Daniel Makin v Protec Security Group Limited and Others [2025] EWHC 895 (KB)