Claims Manqagement (1)
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Transcript of Claims Manqagement (1)
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Claim Management
Prof: V.K.Agarwal
Visiting Faculty
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Insurance
Inland Marine
Work
CompOther Liability
Bonds
Property& Liability
AUTO
Coverages
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Claims History Review Ins Program
Autos (fleet of 9, incl. trailer)(experience - discounted)
Package (liability is sales based - auditable) - CPP
W/Comp (payroll-based - auditable) Loss history
3/02 - $127 other vehicle turned in front of auto driven byowner/officer
5/01 - $7290 unsafe lane change auto loss owner/officerdriving
8/99 - $9706 lost control of auto, flipped
9/03 - $1399 theft from auto parked at business 2/03 - $6038 theft of computer, copier, laptop, from business
premises 7/98 - $688wind/hail damage to canopy at parade of homes 12/97 - $4013 cut finger while using utensil to trim tile,
during installation
9/96 - $1919
employee drove vehicle into building, damageddesk, bookcase, side of bldg, computer
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Multi-line Commercial policiesproperty loss exposures
possibilitythat a person or an organizationwill sustain a financial loss as a result ofdamage to, destruction of, theft of, or loss ofuse of property
liability loss exposures
possibilitythat a person or an organizationwill sustain a financial loss as the result of aclaim from someone seeking monetary
damages
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Commercial insurance Commercial property Business income Crime insurance Equipment Breakdown Inland & ocean marine
Businessowners ~ BOP
Commercial Package policy ~ CPP
Farm insurance
Commercial auto
CGL insurance
Workers compensation
& employers liability
Professional
Directors & Officers/EPLI
Fiduciary liability (EBL)
Umbrella
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Commercial insurance/bonds
Aircraft
Environmental Impairment Liquor Liability Surety Bonds License & Permit Bonds
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Section I
Analysis of property insurance
What
WhereHow
How
Much
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Section 2
Analysis of liability insurance
Insured
BI, PD, PI, AIExclusions
Conditions
defense
judgment
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Eligibility Commercial Package (CPP)
Business Owners (BOP)
Other: builders risk
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Policy structureCommon policy
declarations
Common policyconditions
Coverage partsIf only one part, its consideredmonoline rather than packaged
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Commercial Property
Declarations
property description
kinds & amounts ofproperty covered
covered causes ofloss
mortgagee(s) (ifany)
deductible amount
list of forms &
endorsements
coinsurance %
any optionalcoverages
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Commercial Insurance
Conditions concealment, fraud,
misrepresentation
control of property insurance under 2 or more
coverage parts
legal action against insurer
liberalization
severability
cross-suits
no benefit to bailee
other insurance
policy period,coverage territory
transfer of rights ofrecovery(subrogation)
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Loss Conditions
(Valuation/settlement basis)
abandonment
appraisal duties in event of loss or damage
loss payment
recovered property
vacancy
valuation
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Commercial Property Buildings, auxiliary structures
Insureds business personal property
Others personal property in insureds custody
Property Not Covered
Property Subject to Limitations
Additional Coverages
Extensions of coverage
Deductibles Loss Settlement Provisions
Optional Coverages, endorsements
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Definition ofBuilding
structures listedon Dec page
completedadditions tocovered buildings
fixtures (including
outdoor)
permanentlyinstalledmachinery &equipment
insureds personalproperty used to
maintain business &premises
additions, alterations,& repairs (including
materials within 100)
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Property NOT Covered byB
PP accounts, bills,
records.
most animals
autos for sale
contraband
excavations
land
air/water-borneproperty
bridges, roadways,bulkheads, piers, retainingwalls, foundations
property covered elsewhere
underground pipes
valuable papers
vehicles/aircraft/watercraft
outside grain, hay, straw,fences, antennas, trees
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Additional Coverages
Property off premises
Property in Transit
Property of Others
Personal Effects
Debris removal
Preservation of property
Fire department service charge Pollutant cleanup & removal
Increased cost of construction
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Coverage Extensions Available
BPP
Newly acquired buildings or personalproperty
Valuable papers & records
Accounts receivable
Exterior Signs
Trees, Shrubs, Plants and Lawns TenantGlass
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I
nsurer
sL
oss Payment Options
Pay the amount of
damage or loss Pay to repair or
replace damaged
property
Take property &
pay agreed or
appraised value
Repair, rebuild orreplace with propertyof like kind and quality
Remember: must havefinancial loss
andinsurable interest
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BPPAdditional Conditions
Mortgage Holder Vacancy Coinsurance or agreed value
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Optional Coverages
BPP agreed value option
inflation guard
replacement cost
extension of replacement cost toproperty of others
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Functional Valuation
Endorsements:B
PP
Functional replacement cost = cost to replacedamaged property with similar property that
will perform the same function
Functional building valuation Functional personal property valuation
(other than stock)
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Two Major Approaches
to Insuring Property
SPECIFIC INSURANCE
States separate amount for each building andfor personal property at each location
BLANKET INSURANCE
Covers with one limit:
2 or more types of property
1 or more types of property
at more than 1 location
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Commercial Liability How can liability be imposed?
Contract
Common law negligence
Statute
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Who can expose the business to loss? Owner/spouse in conduct of business
Employees, including operation of
mobile equipment Real Estate/property managers
Legal Representatives
Newly acquired/formed organizations
Independent contractors Those to whom property is entrusted
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Structure of Coverage Liability coverage
Premises/operations
Products/completed operations
Acts of Independent Contractors
Supplementary Payments
Medical Payments
Damage to Rented Premises
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Structural coverage issues Who is an insured
What is covered
Where its coverage How much: Limits of insurance
Exclusions
Definitions Conditions
Endorsements
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Who is an insured Named insured (by definition)
Automatic insureds
Additional insureds
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What is covered Legal liability (damages) Defense expense (sometimes in
damages, sometimes outside) BI, PD, PI, AI as defined (may exclude
last two based on class of risk,underwriting)
Direct and indirect liability exposures
which are not excluded or better coveredelsewhere Not professional (few exceptions)
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Where & when its covered
Territory
Policy period
Occurrence, suit
Retroactive, extended reportingperiods: claims made forms
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Exclusions Intentional acts (reasonable force,
perpetrator excluded)
Contractual Liability (exceptions) Liquor
War
Employment/workers compensation
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Exclusions continued Pollution
Recall (sistership) expense
Auto/watercraft/aircraft (exceptions) Damage to your own property or property
in your care (business risk)
Damage to what youre adding value to
or working on (be careful, workshopexcluded)
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Exclusions continued Known loss (montrose decision, akaloss in progress)
Mold, contamination, fungus (incl.testing, remediation)
Professional (some exceptions)
PI/AI exclusions (intentional,criminal)
Lead-based paint
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Exclusions added by class Products/completed operations
Advertising injury/Personal Injury
Testing / consulting Other locations/operations
(depending on nature)
Special med pay exclusions
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Limits of insurance Occurrence
General Aggregate
Products / completed operationsaggregate
Med Pay sublimit per person
Supplementary payments(enumerated)
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Definitions BI, PD, PI, AI Suit, claim Hazards (to bring meaning to coverage
description and boundaries toexclusions)
Transfer of rights of recovery Other insurance
Insured Contract (to clarify exclusionfor contractual or assumed liability)
Territory Pollution
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Risk Management
Identifying loss exposures
Analyzing loss exposures
Evaluating techniques
Selecting best technique(s)
Implementing technique(s)
Monitoring program & making neededcorrections & adjustments
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Risk Management
Analyze
Options
Select
Monitor
Identify
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Property/L
iability Owner? Landlord?
Tenant?
Construction?
Lease income?
Rental Expense?
Other parties?
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Auto Risks?
Driver selection?
Accident analysis?
Excess/primary?
Permissive user?
Delivery/installation?
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WorkersCompensation
Statutory
Employer/employee
Subcontractors
Employers Liability
Safety Programs
Volunteers
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Inland Marine Computers/data
Values to be delivered & installed
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OtherL
iability Employment Practices
Directors & Officers
Owners & ContractorsProtective
Umbrella/Excess
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Bonds
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What
s in each bucket? Property & Liability
Auto
Workers Comp
Inland Marine
Bonds
OtherL
iability
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