D.C.’s transit system is bracing for liability lawsuits arising from a spectacular head-on crash that occurred in June 2009. The crash killed nine and injured 80. (For recent story, see http://www.washingtonpost.com/wp-dyn/content/article/2009/07/11/AR2009071102660.html)
None of this surprises me. In fact, being a claims guy, one of the first things I think about when hearing about such an event is the wave of litigation.
What caught my eye was a quote from the transit system’s former CFO and Maryland Board member Peter Benjamin. Deriding the prospect that the transit system would have to pay claims from its own funds, confident that the transit system has adequate coverage to address the flood of claims, Benjamin is quoted as saying, “The probability of having to pay enormous sums of money is relatively low. Our insurance rates will go up.”
Huh???
Sorry, but the judges and juries doling out awards could care less if your insurance rates go up. Your insurance rates going up is not check on jury awards, settlements or recoveries. It is an after-effect of those events.
It’s like saying,
“If I drive drunk and kill someone, I can’t get a big award against me because GEICO would raise my rates.”
“If my Rottweiler mauls the postman, I’m in the clear because Nationwide would jack up my premium.”
I can only hope that Benjamin was misquoted or that this comment was taken out of context. Otherwise, the Metro transit system may find itself digging into its own coffers if liabilities exceed their insurance layer. One thing is for certain – the prospect of rising insurance costs will not act as any “brake” on settlements or jury awards stemming from the June 2009 crash.
Sunday, July 12, 2009
Monday, July 6, 2009
Revisiting CEO Review of High-Dollar Claims
In April, the Claims Coach blogged about Evan Greenberg of ACE adopting the practice of personally reviewing all claims of $1 million or over, posing for discussion whether this was a good idea or a waste of a CEO’s limited time. One anonymous follower of the blog offered the following perspective:
“I could see the claims manager submitting a report to the CEO of a company in regards to claims reserved at or over $1,000,000. but the CEO reviewing these high $ claims? If he has limited or no claims experience himself, the poor adjuster is put in the position of give the CEO a `claims 101’ lesson (not an enviable position) and trying to justify everything he did- his investigation, damage control, evaluation, reserve recommendations. Please, let’s leave this up to the claims professionals!”
“Reviewing” covers a lot of ground. Maybe it’s one thing of a CEO wants to review each million-dollar claim. It’s another thing if the adjuster cannot consummate a settlement because the CEO hasn’t gotten around to reviewing the file.
Can you imagine being the claims rep at a judge-ordered settlement conference trying to get through to the CEO by phone for additional settlement authority while the Big Cheese is at a Board Meeting or on a flight to the coast?
“I could see the claims manager submitting a report to the CEO of a company in regards to claims reserved at or over $1,000,000. but the CEO reviewing these high $ claims? If he has limited or no claims experience himself, the poor adjuster is put in the position of give the CEO a `claims 101’ lesson (not an enviable position) and trying to justify everything he did- his investigation, damage control, evaluation, reserve recommendations. Please, let’s leave this up to the claims professionals!”
“Reviewing” covers a lot of ground. Maybe it’s one thing of a CEO wants to review each million-dollar claim. It’s another thing if the adjuster cannot consummate a settlement because the CEO hasn’t gotten around to reviewing the file.
Can you imagine being the claims rep at a judge-ordered settlement conference trying to get through to the CEO by phone for additional settlement authority while the Big Cheese is at a Board Meeting or on a flight to the coast?
Thursday, July 2, 2009
Ape Liability (Continued)
http://www.claimsjournal.com/news/east/2009/07/02/101919.htm
Now the victim of the enraged chimp “Travis” says she feared the ape due to its size, temperament and its tendency to damage its own cage. Charla Nash was attacked by the animal in February and was disfigured to the point where doctors at The Cleveland Clinic performed a face transplant.
Nash has filed a $50 million liability lawsuit against the chimp’s owner, Sandra Herold of Stamford, CT.
The Claims Coach speculates that Herold’s homeowners insurance coverage is triggered and that there is no way the homeowner’s liability policy limits remotely approach $50 million. The Claims Coach is not a lawyer, but is aware that often strict liability is applied to owners of wild animals, though legal counsel for Herold maintains there was no way for anyone to predict that the ape would inflict injury.
Notwithstanding those comments, it is tough to imagine that the homeowners liability carrier would not – at some point – tender its policy limits to try to get this case settled. The Claims Coach cannot imagine that the defendant would chance such a case to a dice-roll in front of a jury.
Given the horrific nature of the injury, the national publicity the case has garnered , the strict liability for injuries from domestically-kept wild animals – even the most stalwart and hard-nosed adjuster might think twice about trial and make a push to settle such a claim.
Now the victim of the enraged chimp “Travis” says she feared the ape due to its size, temperament and its tendency to damage its own cage. Charla Nash was attacked by the animal in February and was disfigured to the point where doctors at The Cleveland Clinic performed a face transplant.
Nash has filed a $50 million liability lawsuit against the chimp’s owner, Sandra Herold of Stamford, CT.
The Claims Coach speculates that Herold’s homeowners insurance coverage is triggered and that there is no way the homeowner’s liability policy limits remotely approach $50 million. The Claims Coach is not a lawyer, but is aware that often strict liability is applied to owners of wild animals, though legal counsel for Herold maintains there was no way for anyone to predict that the ape would inflict injury.
Notwithstanding those comments, it is tough to imagine that the homeowners liability carrier would not – at some point – tender its policy limits to try to get this case settled. The Claims Coach cannot imagine that the defendant would chance such a case to a dice-roll in front of a jury.
Given the horrific nature of the injury, the national publicity the case has garnered , the strict liability for injuries from domestically-kept wild animals – even the most stalwart and hard-nosed adjuster might think twice about trial and make a push to settle such a claim.
Sunday, June 28, 2009
Going Bananas Over Product Liability Fraud
Dole Food apparently is beset by bogus product liability claims filed by Nicaraguan banana farm works who claim they were made sterile by a pesticide, DBCP, last used in the 1970’s. An article in the latest issue of BUSINESS WEEK magazine (7/1/09 p. 16, “A Bunch of Fake Claims Against Dole?”).
Courts in that Central American country have awarded plaintiffs $2.2 billion in damages so far. Dole is not droll in fighting the claims and maintains that a mini-industry has sprung up south of the border to recruit people who never worked on the farms, give them briefings to make then credible and send them to sham medical clinics to goose up the damages.
Where are Bill Lerach or Dickie Scruggs when you need them?)
One upshot from this situation emerges for risk managers. Companies need to fine tune their mechanisms to handling foreign claims, an area that often gets short shrift. The tort lottery is most prominent in America, but other countries are finding it a tasty export from the good old USA.
Further, this vignette is a reminder that insurance fraud is not just an asbestos thing or a domestic U.S. phenomenon. Foreign claims-handling capabilities must include a search for SIU and fraud-fighting tools.
Courts in that Central American country have awarded plaintiffs $2.2 billion in damages so far. Dole is not droll in fighting the claims and maintains that a mini-industry has sprung up south of the border to recruit people who never worked on the farms, give them briefings to make then credible and send them to sham medical clinics to goose up the damages.
Where are Bill Lerach or Dickie Scruggs when you need them?)
One upshot from this situation emerges for risk managers. Companies need to fine tune their mechanisms to handling foreign claims, an area that often gets short shrift. The tort lottery is most prominent in America, but other countries are finding it a tasty export from the good old USA.
Further, this vignette is a reminder that insurance fraud is not just an asbestos thing or a domestic U.S. phenomenon. Foreign claims-handling capabilities must include a search for SIU and fraud-fighting tools.
Monday, June 22, 2009
Another great articulation of “What Adjusters Do” …
Few claim adjusters will ever be compared to Mother Theresa, nor do they vie for such an iconic status. Nevertheless, claim adjusters are often among the “first responders” in case of disaster and provided needed aid and succor.
For those adjusters who often wonder, “Why am I doing this?” one of the best explanations I have read comes from Pete Crosa, a claims authority who writes a periodic blog on “An Adjuster is What an Adjuster Does.” Peter hits the nail, on the head once again in his latest post, which I am offering verbatim:
"There is a great army of adjusters that swoop in right after a hurricane or a flood and, outside of a cold bottle of purified water and Red Cross personnel, they are one of the most welcomed sights to a battered and ravaged community.
"This concept of indemnity is as old as mankind. It’s not too difficult to imagine some primitive family losing their lone goat, camel, or other existence threatening asset only to be made whole by the care and generosity of other tribal members.
"Modern society didn’t ditch the concept, they merely packaged it and fashioned a legal contract called an insurance policy. How cool is that? Adjusters get to execute the terms of this insurance policy and we should feel pretty good about that. The terms are clear. Sometimes it makes them whole. Sometimes it just lessens the burden. But it always helps like it was designed to. That’s what an adjuster does."
Amen, Peter!
For those adjusters who often wonder, “Why am I doing this?” one of the best explanations I have read comes from Pete Crosa, a claims authority who writes a periodic blog on “An Adjuster is What an Adjuster Does.” Peter hits the nail, on the head once again in his latest post, which I am offering verbatim:
"There is a great army of adjusters that swoop in right after a hurricane or a flood and, outside of a cold bottle of purified water and Red Cross personnel, they are one of the most welcomed sights to a battered and ravaged community.
"This concept of indemnity is as old as mankind. It’s not too difficult to imagine some primitive family losing their lone goat, camel, or other existence threatening asset only to be made whole by the care and generosity of other tribal members.
"Modern society didn’t ditch the concept, they merely packaged it and fashioned a legal contract called an insurance policy. How cool is that? Adjusters get to execute the terms of this insurance policy and we should feel pretty good about that. The terms are clear. Sometimes it makes them whole. Sometimes it just lessens the burden. But it always helps like it was designed to. That’s what an adjuster does."
Amen, Peter!
Friday, June 19, 2009
SIU Adjusters Needed to Fight North Korean Insurance Fraud!!
Previously I didn’t know which was worse – North Korea’s burgeoning nuclear program or its Fearless Leader’s bad haircut. Now we learn that this country is a leader in international insurance fraud. Details and exploits are uncovered in a recent front page issue of The Washington Post (http://www.washingtonpost.com/wp-dyn/content/article/2009/06/17/AR2009061703852.html?hpid=topnews).
Apparently Korea National Insurance Company is renowned for procuring reinsurance and then submitting dubious claims. In fact, insurance fraud is a source of much needed hard currency.
Any anti-fraud or SIU adjusters looking for the ultimate career challenge might consider this one. Of course, taking on Kim Jong Ill might involve risking a stint in a North Korean labor camp. (Any adjuster who has flown Northwest will be well-prepared for this eventuality, however.)
Perhaps we should introduce a motion to the United Nations that it create an international SIU???
Apparently Korea National Insurance Company is renowned for procuring reinsurance and then submitting dubious claims. In fact, insurance fraud is a source of much needed hard currency.
Any anti-fraud or SIU adjusters looking for the ultimate career challenge might consider this one. Of course, taking on Kim Jong Ill might involve risking a stint in a North Korean labor camp. (Any adjuster who has flown Northwest will be well-prepared for this eventuality, however.)
Perhaps we should introduce a motion to the United Nations that it create an international SIU???
Saturday, June 6, 2009
Invest in Your Career Through New CLM Lit Management Training Sessions!
Vince Offer, the ShamWow pitchman, has nothing to worry about from me. You know – the scary dude on late night TV with the headset. (Actually, the economy is so bad now, I hear that some folks are knitting together Sham-Wows to fashion their own makeshift Snuggies!) ShamWows, Snuggies and Garden Weasels. We may laugh and snicker, but the pitchmen laugh too . . . all the way to the bank.
The Claims Coach isn’t given much to making product endorsements, but makes an exception now. I heartily recommend the new slate of litigation management training sessions being launched and offered by the Council on Litigation Management (visit http://www.litmgmt.org/Training.aspx ). The CLM is offering courses in 25 states, approximately 250 times from June to November 2009. Many provide adjuster CE credits.
The curriculum includes:
• “Fundamentals of Litigation Management”
• “Case Assessment and Evaluation”
• “Negotiation Strategies”
• “Structured Settlements”
• “Litigation 102: Pleasing and Motion Practice”
• “Litigation 103: Discovery Practice”
• “Litigation 104: Trial Practice”
Sadly, there has been a dearth of easily accessible training for claim professionals in the discipline of litigation management. This is ironic, as for many claim professionals this activity comprises a huge chunk of their jobs. The CLM helps fill this void.
In tight economic times, one of your best investments is to invest in your career – deepening your skill sets or broadening them. Visit the CLM website and consider registering for one of its sessions. Better still, join the CLM.
Caveat: if the session rooms are drafty, you’ve got to bring your own Snuggie….
The Claims Coach isn’t given much to making product endorsements, but makes an exception now. I heartily recommend the new slate of litigation management training sessions being launched and offered by the Council on Litigation Management (visit http://www.litmgmt.org/Training.aspx ). The CLM is offering courses in 25 states, approximately 250 times from June to November 2009. Many provide adjuster CE credits.
The curriculum includes:
• “Fundamentals of Litigation Management”
• “Case Assessment and Evaluation”
• “Negotiation Strategies”
• “Structured Settlements”
• “Litigation 102: Pleasing and Motion Practice”
• “Litigation 103: Discovery Practice”
• “Litigation 104: Trial Practice”
Sadly, there has been a dearth of easily accessible training for claim professionals in the discipline of litigation management. This is ironic, as for many claim professionals this activity comprises a huge chunk of their jobs. The CLM helps fill this void.
In tight economic times, one of your best investments is to invest in your career – deepening your skill sets or broadening them. Visit the CLM website and consider registering for one of its sessions. Better still, join the CLM.
Caveat: if the session rooms are drafty, you’ve got to bring your own Snuggie….
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