Risk Partners in Claims Administration

by | Apr 25, 2024 | Risk Governance, Risk Basics

Risk management plays an integral role in the partnership between an insurance carrier and legal counsel. Risk-legal-insurer are the trifecta of success in marketability and insurability. They are equal partners in the reporting, assessment, and successful management of any incident, claim or litigation. Success, however, requires respect for each role and the willingness to recognize and be attentive to the nuances of each claim file.

Credentials play a significant role in managing claims. A fire chief once reminded me that we all need to “stay in our lanes” and be respectful of the knowledge and experience we bring to the risk equation when managing our relationships. Understanding the strengths and weaknesses of legal counsel and claims representatives is as important as the strength of the documentation risk professionals provide for their liability assessment.

It is important for risk professionals to understand the claim reported and to gather information to cost effectively manage the claim file with their insurer and legal counsel. Note the word “with.” Successful risk professionals embrace the opportunity to go “Columbo” to gather information to defend their entity and minimize the potential claim reserve that may be recorded on their loss runs for their entity for that claim.

In the property and casualty business sector, my credentials are easily recognizable. CPCU means I am a Chartered Property Casualty Underwriter – I have the capacity to review business processes, budgets and operations and make a solid understanding of the nuances of an entity’s risk potential regarding insurability. My ARM – Associates in Risk Management gives me additional street cred to be able to assist in identifying and managing issues – risks that may materially affect an organization’s ability to remain financially stable and fiscally attractive. Lastly, the AIC – Associates in Claims gives me the knowledge to help assess liability and manage claims in partnership with insurance carriers and assigned legal counsel.

Early in my career, I had the privilege of learning claim case management from legal counsel who now sits on the federal judicial bench. I learned to respect the importance of open and honest communication and to identify the nuances – good, bad, or ugly of a claim for its defense. I also learned about how to construct a claim file for defense counsel and to determine what was potentially important to that defense. In learning that honesty, I recognized the importance of identifying entity vulnerabilities and strategic opportunities for settlement success.

Risk professionals embrace their legal counsel. Sure, there is always a give and take as to how best to defend based upon the people and processes involved, but that discussion sets the foundation for success in the risk-legal-insurer management of that claim file. What is most important to the relationship between the three is the ability not to waste time and to admit the liabilities that may exist. The recognition of deficiencies in claims management assists in a successful defense and conclusion for all parties involved.

Risk relationships with claims professionals is central to the respect given that entity for insurability. I have been fortunate to be able to cost effectively manage claims in partnership with legal counsel and insurers that positively affected my entity’s insurance program, annual budget, bonding, and risk’s profitability. Dollars spent on excellence in legal counsel and claims administration go a long way in proactively managing risk, insurance carrier relationships and marketability.

Proactive risk and safety management is an effective governance approach to good fiscal management. Time to take a hard look at your claims processes. Are they affecting your insurability? If you are getting queasy during that claim administrative review, let us discuss how Rivers Risk can help you energize your risk portfolio and minimize your claims administrative costs.