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Customs, Standards, Practices & Duties - P&C

Claim Auditing

The claims audit is the anathema of day-to-day claim operations. Nothing is more disruptive. Yet, if properly defined, nothing is more informative and helpful in improving a claim management program. This article will examine the need for a regular auditing program and provide a recipe for a three-dimensional approach to the process in order to maximize the accuracy of the audit results.

The need to conduct regular claims audits has already been widely discussed. With the magnitude of self-insured claims programs (including self-funded programs) and the millions of dollars spent on claim administration fees, what better way to verify whether the money spent has been justified or wasted? In essence, an audit of closed and open claims should accomplish several things.

Continuity and prior/pending litigation exclusions in the claims-made policy form

“Directors and officers liability policies have long been issued on a “pure claims-made” basis (a
phrase this writer first coined in 1990). That is, they were written with no prior act date (also
known as a retroactive date). As a result, wrongful acts of the directors and officers dating
back to corporate formation were covered as long as the claim was first made against the insured
during the policy term. To minimize the singular risk D&O insurers were taking (i.e.,
“what probability exists that a claim will be first made against the insured during the policy
term?”), they began using a “continuity date” and/or a “prior/pending litigation exclusionary”
date that was the same as the inception date of the first policy issued. The date the insured
first obtained coverage thus became known as the “first coverage date” so the “continuity
date” could be honored at renewal. This was reinforced by a warranty within the application
for coverage stating that the insured was or was not aware of facts, incidents, or circumstances
that could give rise to a claim in the future.”

The World Trade Center Property Insurance Trial: Lessons Learned?

All should use greater care handling underwriting information

Vincent “Chip” Boylan

Property and Casualty Insurance Expert Witness with a 45 Year background as an Insurance Broker.  Expert witness since 1989 with a primary focus on 1) agent and broker standard of care; and 2) coverage issues. Topics addressed have included: Property/Crime; Business Interruption; General Liability; Executive & Professional Liability; Workers’ Compensation; Umbrella Liability; Automobile; and Homeowners.…

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Pauline Thomas

EXPERIENCE Agent / Broker / Producer Standard of care, underwriting, insurance policy coverage interpretation, claims, good faith, bad faith Property, liability, WC, inland & wet marine, commercial & personal lines, self-insurance, risk management Interpretation of clauses in lease agreements, construction, PEO & other contracts, additional insureds, certificates Help professionals & laypersons understand insurance & risk…

Nancy Germond

Nancy Germond’s three decades of risk management experience give her unique insights and abilities as a consultant. An accomplished risk and claims manager, Nancy authored scores of risk-management related articles, White Papers and has presented for organizations like the Public Risk Manager Association (PRIMA) and the Society for Human Resources. She is the Executive Director,…

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Steve Coombs

Mr. Coombs joined Risk Resources as president in 1992. Risk Resources is a risk management and commercial insurance consulting firm based. Risk Resources does not sell insurance and provides consulting services on a fee-for-service basis. Common projects include risk management and insurance audits, insurance RFPs/proposal management, agent/broker RFQs, RFPs and selection, risk financing studies, litigation…

Michael Gay

An interpreter of “insurance-ese” assisting others in understanding insurance policies, procedures, and practices of the industry. Expert Witness/Litigation Consultant in P&C coverages and Agent/Broker “Best Practices”. Four decades of insurance program development in the specialty P&C insurance space. Skilled in the identification, analysis, evaluation, and treatment of complex risk and loss exposures. Insurance Educator for…

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