Let’s face it. One way or another, all of your claims will be settled, right? Third-party claims may take a long time to settle, but a resolution is almost guaranteed at some point; there will be a settlement. It may result from a compromise between the plaintiff and the insurance company or could be from a jury verdict against your policyholder.
Is there a way to prevent all liability claims from going into litigation? No, probably not. Especially the ones you learn of when the first notice of loss is a summons and complaint. However, there are some things you can do when managing your claims department to reduce the number of claims that do go into litigation.
Here are some tips and tricks that should be employed today by your claims department that can reduce the number of claims that result in a summons and complaint.
Complete a thorough investigation within 30 days. Learn everything you need to know about the circumstances of the loss as soon as possible. Someone representing your company should go to the scene, talk to the people there, and take photos and measurements as necessary. Police reports should be obtained. Security camera video should be obtained. As much information should be learned about how the incident occurred as early as possible because damages usually take a long time to figure out.
Utilize your staff adjusters and independent adjusters to get the investigation done quickly. If you fail to do this, chances are you will be paying your defense counsel to do basic things such as obtaining police reports, seeing photographs, statements from witnesses, and other simple things that adjusters are supposed to do. Oh, and by the way, the cost of an adjuster doing this is far less than having your defense counsel perform these tasks!
Maintain Rapport With The Claimant
If the claimant is not represented, make sure you contact them early and maintain a complete record of phone and in-person communications with that individual. If there are problems with liability, explain to them how liability works and what is owed under the policy and what is not. This is not a time to discuss coverage with a potential plaintiff. Instead, it is time to educate them about liability insurance and what they can expect through the claim process. Develop rapport.
Maintain Rapport With The Attorney
If the claimant is represented, the same rules apply. Maintain robust conversations with the plaintiff’s attorney about liability and what your investigation reveals thus far. If the plaintiff’s case appears weak, voice that to the claimant’s attorney early on. You may have information that they don’t have yet. Alternatively, they may have information in support of liability that you are not aware of yet. The longer your claim investigation lingers, the more likely the case will go into litigation. Learn as much as you can from both sides to make an early liability determination, making discussions regarding damages more productive later on.
Process Med Pay Quickly
If your policy has medical payments coverage, make sure those payments are issued in earnest. Remember that medpay is no-fault coverage. You do not need to determine liability to make a payment under med pay. You must prove that the claimant was injured on your insured property. This can be done in most cases through a statement from your insurance or an independent witness. Security camera video will also prove whether they were injured on-premises. Actively request from the claimant or their attorney copies of medical bills or any out-of-pocket expenses that qualify for payment under your med pay coverage and get those payments out as quickly as possible to show goodwill. Remember that is what med pay is designed for!
Every claim is different, and you’re not going to be able to prevent every case from going into suit, but you can make sure that you are reducing the number of claims that go into the suit through concerted effort.
You can’t manage something that you are not tracking. Maintain some data on the claims that go into litigation versus those that do not. Employ the steps above over time and see if your efforts impact the number of claims that go into litigation. Is all this effort worthwhile? Of course, it is. Defense costs can often slide into the six figures before you know it.
Manage your claims department, but also manage your claims. Teach your adjusters that a claim can be managed with some skill. With practice, they’ll be able to settle a claim every time.