TSIB CLouis
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Claire M. Louis | Director of Claims | Turner Surety and Insurance Brokerage, Inc. INTRODUCTION There are a number of benefits to promptly reporting a claim to your commercial general liability insurers. Advising insurers of an accident, claim or suit within a reasonable period of time can help ensure that insurance coverage is available to pay the loss and that you will not incur any out-of-pocket costs. Early reporting to insurers can positively impact your bottom line. Insurance industry studies demonstrate a correlation between prompt loss reporting, lower claim costs, and shorter settlement times. Lower claim costs can translate into lower insurance premiums and greater profitability for your organization. Once a claim or suit is reported, the claim management process can begin. Early claim response and investigation can lessen the likelihood of attorney involvement and litigation. Fewer, shorter disputes increase the productivity of management and employees who will spend less time dealing with claims and lawsuits NOTICE TO INSURERS The notice provision in liability insurance policies exists to provide insurers with the opportunity to promptly investigate and respond to claims. Claim notification also allows insurers to set loss reserves and determine insurance policy premiums. Commercial general liability policies require the insured to promptly notify the insurer of any occurrences which may develop into a claim as well as any claims or suits asserted against the insured. In addition to notifying the insurer of an occurrence or claim, you must forward to your liability insurer copies of all demands, notices, summonses or other court papers you receive even if you previously reported the matter to the insurer as an occurrence or claim. Failure to do so could lead to loss of your insurance coverage. TIMELINESS OF NOTICE Courts have generally held that insurance policy notice provisions requiring notification of occurrence, claim or suit “as soon as practicable” should be construed to mean that notice should be given within a reasonable period of time in light of the surrounding facts and circumstances. Delayed notification of occurrences, claims, or lawsuits to insurers may relieve an insurer of its obligations under the insurance policy. However, most states require the insurer to show that it has been prejudiced by the insured’s late notice for this to occur. To determine if there is prejudice, courts generally consider whether the delay has resulted in the loss of information essential to evaluating or defending the case. New York is one of the few states where any delays in insurer notification, regardless of whether there is demonstrable prejudice to the insurer, can defeat coverage. In New York, notification delays of less than 30 have resulted in a loss of coverage. The other states where prejudice is considered irrelevant in determining the impact of late notice on an insurer’s coverage obligations are Georgia, Nevada,and Virginia. The Benefits of Early Insurance Claim Reporting
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Transcript of TSIB CLouis
Claire M. Louis | Director of Claims | Turner Surety and Insurance Brokerage, Inc.
INTRODUCTION
There are a number of benefits to promptly reporting a claim to your commercial general liability insurers. Advising insurers of an accident, claim or suit within a reasonable period of time can help ensure that insurance coverage is available to pay the loss and that you will not incur any out-of-pocket costs.
Early reporting to insurers can positively impact your bottom line. Insurance industry studies demonstrate a correlation between prompt loss reporting, lower claim costs, and shorter settlement times. Lower claim costs can translate into lower insurance premiums and greater profitability for your organization.
Once a claim or suit is reported, the claim management process can begin. Early claim response and investigation can lessen the likelihood of attorney involvement and litigation. Fewer, shorter disputes increase the productivity of management and employees who will spend less time dealing with claims and lawsuits
NOTICE TO INSURERS
The notice provision in liability insurance policies exists to provide insurers with the opportunity to promptly investigate and respond to claims. Claim notification also allows insurers to set loss reserves and determine insurance policy premiums.
Commercial general liability policies require the insured to promptly notify the insurer of any occurrences which may develop into a claim as well as any claims or suits asserted against the insured.
In addition to notifying the insurer of an occurrence or claim, you must forward to your liability insurer copies of all demands, notices, summonses or other court papers you receive even if you previously reported the matter to the insurer as an occurrence or claim. Failure to do so could lead to loss of your insurance coverage.
TIMELINESS OF NOTICE
Courts have generally held that insurance policy notice provisions requiring notification of occurrence, claim or suit “as soon as practicable” should be construed to mean that notice should be given within a reasonable period of time in light of the surrounding facts and circumstances. Delayed notification of occurrences, claims, or lawsuits to insurers may relieve an insurer of its obligations under the insurance policy. However, most states require the insurer to show that it has been prejudiced by the insured’s late notice for this to occur. To determine if there is prejudice, courts generally consider whether the delay has resulted in the loss of information essential to evaluating or defending the case.
New York is one of the few states where any delays in insurer notification, regardless of whether there is demonstrable prejudice to the insurer, can defeat coverage. In New York, notification delays of less than 30 have resulted in a loss of coverage. The other states where prejudice is considered irrelevant in determining the impact of late notice on an insurer’s coverage obligations are Georgia, Nevada,andVirginia.
The Benefits of Early Insurance Claim Reporting
IMPORTANCE OF EARLY REPORTING
The above discussion makes clear that the early reporting of occurrences, claims, and lawsuits to liability insurers is not only desirable, but essential to maintaining the availability of insurance coverage and minimizing the financial impact on your business. All occurrences, claims, lawsuits, accidents or circumstances likely to give rise to a claim should be promptly reported to the insurer within 24 hours, if possible.
Many liability insurers offer on-line claim reporting or a 1-800 claim reporting number to facilitate claim reporting. If you decide to use either of these reporting tools, which we strongly recommend, be sure to have on hand detailed loss information, including a description of the injury or damage and contact information for the claimants and witnesses, if any. You should note the claim number assigned by the insurer as confirmation that you reported the claim and so that you may more easily retrieve the related claim record from the insurer’s on-line claim system (if you have access). If feasible, print and maintain a copy of the electronic claim report. This will provide additional evidence of timely claim reporting, should questions arise about this in the future.
You may wish to consider designating individuals within your organization with primary and secondary responsibility for insurance claim reporting. Having a claim reporting back-up reduces the risk of late claim notice in the event the individual with primary claim reporting responsibility is absent.
Finally, remember: claims, unlike fine wine, do not improve with age. Report claims to insurers early and often!
If you have questions about this article, please contact Claire Louis at: 201.722.3900 or [email protected].
Claire Louis is TSIB’s Director of Claims. Claire leads TSIB’s property-casualty insurance claims group, which provides professional advice to clients on claims valuation, management, and recovery issues.
Turner Surety and Insurance Brokerage, Inc. (TSIB) is a privately-held insurance brokerage which provides risk management services for leaders in the design and construction industry. TSIB is a subsidiary of HOCHTIEF AG, one of the largest construction and engineering organizations in the world. TSIB’s website is www.tsibinc.com.
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