Family road trips — whether as a child or a parent, I’m sure we’ve all heard or said:
“Better go now, because we won’t pull over to a rest stop until I need to pull over!”
As a father with a small bladder and a vice of Mt. Dew, my kids know this is a vain threat, but the point here is thinking ahead is always wise. The same can be said for claim management.
Ideally, businesses don’t have a loss. But when they do, knowing such things as when to report a claim or who you would want to defend you in liability matters require planning ahead.
Claims-Made Policy
Last summer, I shared a blog on the importance of promptly reporting executive line events due to the claim reporting conditions found in such claims-made policies. I can’t stress how important this is to understand. A lawsuit is not required to trigger the reporting condition, and rarely is it the first thing presented to make a claim against a company. When in doubt, let us know.
Duty to Defend
When it comes to defense of a covered liability loss, having conversations about who will defend you well in advance of an actual litigated claim is wise. In fact, doing so before renewing a policy is suggested, as conversations and consensus with the involved carrier will be required.
Most claim policies are “Duty to Defend,” which places the decision on which attorney to use in the carrier’s court. Most carriers will have panel counsel they will use when defense is required on a covered loss. This is regardless of line of coverage.
Carriers prefer a limited number of attorneys they work with for each line of coverage and jurisdiction. Each carrier will have highly structured processes and procedures of how counsel will work a case and report back to the carrier. Another reason will be agreed-to hourly rates. Finally, building rapport and a good working relationship is easier when working with fewer firms.
For all these reasons, working with a limited number of selected firms is the norm. At times, this includes law firms you may work with already or prefer. If so, great! If not, persuading carriers to allow an attorney not on panel counsel to defend a matter can be nearly impossible, especially if the loss has already occurred.
If this is something that’s important to you, ask Holmes Murphy to find and share your carrier’s panel counsel ahead of time. If your preferred attorney is not on the list, depending upon the carrier, we can have conversations with them to see if that firm can be added to the panel.
Keep in mind, nominating a new firm to panel counsel takes some time as the carrier will want to fully investigate any proposed firm to ensure they are qualified as well as verify they would be willing to follow the carrier reporting process and rates.
Executive Risk Policy Guide
Claims-made reporting conditions and Duty to Defend are just some of the items addressed in a Holmes Murphy guide penned by our Executive Risk & Cyber Account Executive, Ross Ingersoll. You can find the document by clicking here.
When it comes down to it…just think ahead. Sometimes it’s a long way to that next rest stop. If you’re not sure what to do, reach out!
