General Liability Claims – How Insurance Companies Investigate Them

Written By: Joseph Badowski on April 12, 2010 No Comment

To borrow a famous quote from the movie Forrest Gump, handling general liability claims is “like a box of chocolates – you never know what you are going to get”. Those working in general liability insurance are faced with a myriad of issues, and must be able to address them in a timely and calculated method. The general insurance liability claims adjuster must develop each claim systematically, so that nothing is overlooked.

Pinpointing The Issues : The first thing to be done by the claims adjuster is to obtain an understanding of the various issue involved. The insured may not be aware of the claim being advanced against them. It therefore becomes necessary for the adjuster to develop a clear understanding of the issues involved in the claim. Pinpointing the allegations and theory of liability is the initial part of the investigation.

Assess The Coverage : Once the adjuster understands the issues involved, they then identify and address any potential coverage issues. Frequently, the initial coverage analysis is based on very limited information. Therefore, a timely and well written reservations of rights letter should be issued citing the potential coverage issues, which must be perfected through further investigation. Coverage is a particularly sensitive issue and should not be taken lightly by the adjuster. Discussions with supervisors and senior management should be an ongoing process to ensure that every thing regarding coverage is correct.

Know The Insured’s Role / Status : It is essential that the adjuster clearly recognizes the role or status that the insured has in a general liability claim. Does our insured own or lease the property? Is the insured a real estate management company? If so, does our insured have a real estate management agreement? Is our insured the snow removal contractor? Is our insured the General Contractor, or are they a subcontractor? Is our insured the manufacturer, distributor, retailer or installer of a product?

Find Out About The Insured’s Work Or Service : The adjuster needs to take the time to learn about the type of work or service the insured performs, and how this contributed to the alleged injury or damage. An expert will not only provide vital testimony to refute allegations of negligence being made, but will also assist the adjuster to understand the technical issues involved. Through interviewing the insured, and through expert testimony, the adjuster can obtain necessary information and become educated on the technical issues involved with their claim.

Secure And Analyze Relevant Documents : Although an insured may have no tort liability, they may have entered into a contract or agreement which could expose them to contractual liability. The contract or agreement contains indispensable information needed to complete a contractual liability analysis. For this reason, an adjuster needs to recognize when there is a potential risk transfer exposure, and to secure copies of any applicable documents.

Secure Field Investigation : The scene of an accident may change as efforts are made by an insured to complete a job. For this reason, it is necessary for the adjuster to develop a close rapport with their field investigator to insure accurate and timely flow of information. The field investigator has the responsibility of communicating everything that may have a bearing on the claim, however insignificant it may seem.

The author, Joseph Badowski, is a liability insurance expert who has worked in the industry for more than 20 years. He currently works at Harleysville Insurance, and can be contacted at jkmbadowski@yahoo.com