Study 8 - Commercial Claims Flashcards
What are the 8 typical steps of a claim?
1) The client reports the loss to the broker
2) The broker reports the loss to the insurer
3) Claim goes through an intake process; claims professional assigned
4) First issue to determine is if there is coverage
5) After coverage confirmed, reserves are set and updated as the process continues
6) Claims investigation begins; contracts, waivers, interviewing witnesses, on-site inspections
7) Resolution; typically a payout
8) All stakeholders need to be notified once resolution is reached
What are some common priorities for a client when a commercial claim occurs?
- Confirming that there is coverage for the claim
- Timely communication throughout the claims process
- Being aware of the costs of the claim (rates/coverage)
- Resolution of the claim (amount/timing)
What are some typical questions a client may ask about a claim?
Is there coverage?
How do I find out how the claim is progressing?
What do I need to do in the claims process?
Who can I speak to about the claim?
What is the cost of the claim?
When will the claim be resolved?
What is the role of a claims professional?
- To verify coverage based on the loss details
- To communicate with the client and broker about how coverage applies to the specific loss details
- To notify underwriting of possible issues with the policy or new risks
- To verify the loss details and explain the claims process to the client
- To evaluate the claim by setting appropriate reserves
- To pay amounts owed under the policy as defined and/or as prescribed by law
- To communicate developments throughout the life of the claim with the other stakeholders
What is a TPA?
Third party administrator
What is the role of the broker in relation to claims?
- Assist the client in reporting the loss, first notice of loss, send to insurer
- Explain the claims process to the client
- Monitor the progress of the claim, as necessary
- To advocate on insured behalf when concerns arise
What is the different between express and implied?
Express is written in the agreement
Implied is part of the client’s expectation
What is the role of the underwriter in relation to claims?
- Verify that the policy is intended to respond to the risk
- Assess policy renewals based on claims history
- To confirm whether there are policy issues with a claim
- To have copies of endorsements and business descriptions, among other policy documents available to confirm coverage
What are the three main elements of the claims process?
- Reporting a loss
- Confirming coverage
- Effective coverage
What is the important information to capture when a loss is reported?
Loss details Date of loss Jursidiction Contracts Contact information Reporting of the loss
What are some issues of a loss not being reported?
- Claims professional loses opportunity to verify info about coverage or injuries, interview witnesses, preserve evidence and to identify parties that may be liable
- Chance of litigation against insured increases
- At renewal, underwriter may not have time/opportunity to review the risk
- Reputation of insurance professionals and company is harmed
What is investigated in relation to coverage?
Definitions, exclusions, endorsements, limits, deductibles, self insured retention, claims handling agreements
What is the difference between a reservation of rights letter and a non-waiver agreement?
Non-waiver agreement is signed by the policyholder to acknowledge the stance of the insurer
How does the broker communicate with clients before, during and after the claims process?
BEFORE
- Potential for exclusions and what it means
- Relate expectations
- Discuss deductible
- Discuss self insured retention
- Discuss risk managements or recommendations from insurer to reduce risk
DURING
- Ensure all info is reported by client
- Confirm deductible & SIR
- Relay info from claims and/or underwriter
- Ensure client follows through on recommendations
- Explain importance of compliance
- Notify client of obligation to forward notice
AFTER
- Communicate settlement and the impact
- Discuss strategies to reduce future claims
What tasks are generally included in a claims investigation?
- Reviewing all information
= Speaking to the parties involved - Verifying facts
- Ensuring reserve adequacy (updating reserves as more info becomes available)
- Complying with claims handling agreements
- Keeping brokers, clients and underwriters updated and informed
