Notice of Circumstance

A notice of circumstance is a report of an incident that has not yet become a claim. Once accepted, it locks that incident into the policy in force at the time, so a demand letter arriving three years later is handled under the policy you had then rather than the one you have now.

This is the main defense against the structural weakness of claims-made coverage. In senior care the gap between incident and demand routinely runs one to three years, and in that interval exclusions get added, abuse sublimits get reduced, retentions rise and carriers exit. A circumstance noticed under the better policy stays with the better policy. The judgment is where to draw the line, because noticing everything reads to an underwriter as a pipeline of future claims. A workable written standard: any death, any fracture, any transfer to a higher level of care attributable to the incident, any stage three or four pressure injury, any elopement, any abuse or neglect allegation whether or not substantiated, any incident where the family has requested records or retained counsel, and any state-reportable event. Apply it consistently and be specific in the notice, because vague blanket notices covering all incidents in a year are routinely rejected.