Common use of Known circumstance Clause in Contracts

Known circumstance. If - (a) a claim in respect of which the Insured is entitled to be indemnified by the Insurer under this contract arises from a circumstance which occurred prior to the period of insurance; and (b) the Practitioner became aware of that circumstance prior to the period of insurance; and (c) a reasonable person in the position of the Practitioner would have considered that the circumstance may give rise to a claim against any Insured; and (d) the circumstance was not reported to the Insurer or to the then primary insurer prior to the period of insurance, then the Insurer will not refuse liability or reduce its liability (or delay any settlement with or payment to a claimant) in respect of that claim, but the Practitioner will indemnify the Insurer to the extent of - (i) the difference between the Insurer's liability under this contract (including for defence costs) and the liability it or the then primary insurer would have incurred under the contract for the period of insurance during which the Practitioner first became aware of the circumstance (had the circumstance been duly reported then); plus (ii) the amount that fairly represents the degree to which the loss could have been mitigated if the circumstance had been notified to the Insurer or to the then primary insurer at the time that the Practitioner first became aware of it.