A no known loss letter is an important but not always well-understood document. It aims to help an organisation and its management satisfy its duty of disclosure. This obligation must be fulfilled while negotiating the terms of policy at any stage of its lifecycle. Without one, an insurer is not likely to agree to any requested changes.
In this article, we will explore the concept of a no known loss letter within the context of the following coverages:
- Directors and officers liability insurance
- Employment practices liability insurance
- Management liability insurance
- D&O insurance for nonprofits
You may also find that similar concepts apply to a broad range of financial lines insurances, such as professional indemnity insurance, cyber insurance, and even crime insurance to a certain extent. Keep in mind, however, that each policy is strictly interpreted according to its own terms and conditions.
Contents
1 No known loss letter: A definition
2 The role of a no known loss letter in the policy lifecycle
3 What is the purpose of a no known loss letter?
4 Who can sign a no known loss letter?
5 Imputation and severability of knowledge
6 A no known loss letter sample
7 No known loss letter: An example
8 Conclusion
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