I recently had the opportunity to discuss contracts, litigation and liability at the Snow & Ice Symposium. During the discussion, a topic of concern was staying involved with the claims process to prevent insurance carriers from settling potentially unjust claims and raising insurance premiums.
It’s simple, but easy to forget. It is very important to promptly forward any claim notice or lawsuit to your insurance company or agent. You don’t want to cause a delay, because it may compromise the ability of your insurance carrier to defend a lawsuit. The insurance carrier will investigate the claim, and if a lawsuit is presented, legal counsel will be hired to represent your company. Your policy has a clause requiring your full cooperation in defense of claims, including prompt notification of all claims and lawsuits to your insurance company.
Provide service documentation
Supplying documentation to assist your insurance company with investigation and analysis of claims is extremely important. The initial claim usually contains basic information, probably limited to the date and location of the accident, and possibly a brief discussion on the claimed injury. Supplying documentation to your insurance carrier from the beginning of the claims process gives your insurance carrier an understanding of your business, and the potential responsibility of your company for the claim. Supply a copy of your contract for services and any documentation of work performed by you or your subcontractors surrounding the claimed accident. Help your insurance company understand what was expected, what you did, and why you are not responsible for the claim.
Don’t interact with opposing counsel
There is nothing for you to gain by calling or writing to the attorney and offering your version of events. It is extremely unlikely anything you say will result in a dismissal of the claim. If anything, the attorney will simply use any information you provide against you.
One of the most difficult parts of my job is representing a business that has no time or interest in assisting the defense. It is understandable that you are busy operating your business and may be uncomfortable with litigation and dealing with attorneys, but please understand your attorney absolutely needs your assistance. It is incumbent upon you to educate your attorney on the operations and contractual responsibilities of your business. Just because your insurance carrier selected and is paying for the cost of the attorney does not mean you should fail to cooperate.
Keep in touch throughout process
You have a right to be kept advised of developments in your case. One of the most common complaints at my presentation was that insurance carriers settle claims with no notice to the snow and ice management company, resulting in increased insurance premiums.
There is nothing wrong with an insurance carrier deciding to settle a case, since there are significant costs associated with a legal defense and uncertainty when proceeding to a jury trial. However, you deserve to be kept advised of developments. Staying engaged in the defense process lets your insurance carrier and attorney know you care about the result of the case.
Consent to settle? Not likely.
You probably don’t have a right to require consent to settle. But you do have the right to be kept advised of significant developments in a legal case, including settlement discussions. Consent to settle clauses are usually found in insurance policies covering physicians, but are extremely rare in a policy of insurance covering snow professionals. Essentially, unless you have a very large deductible or self-insured retention limit, you probably can’t require your insurance carrier to get your consent before settling. However, by staying in contact with your insurance carrier and/or attorney, and making sure your position on responsibility for services is understood, you stand a good chance of influencing or at least guiding the direction your insurance carrier decides to take in defense of a case.
- Be open and honest with your insurance carrier/attorney regarding your contractual responsibilities and services provided on the claim site.
- Never talk to opposing counsel. It can only get you in trouble.
- If you don’t make time to be involved in the process, don’t be surprised if the carrier settles on your behalf.
Darryl Beckman founded Beckman Roth Ogozalek, which has offices in New Jersey
and Pennsylvania. Contact him at email@example.com.