Risk management is a tool most public entities use to reduce their susceptibility to unexpected losses. Even with the most efficient risk management program in place, public entities still face the danger of something going wrong. Uncertainty is inevitable which is why OneBeacon Government Risks wants you to know all the steps involved with filing a claim. Filing a claim quickly and correctly can be the deciding factor in the amount of loss that occurs.
Step 1: Know when to report a claim
First things first, talk to your broker and understand what constitutes a claim under your specific policy. Different policies have different claim definitions. For instance, some policies consider Equal Employment Opportunity Commission (EEOC) charges to be claims, while others require that there be a demand for money damages. Some policies require that demand to be in writing. The timing for reporting claims is important. Your broker can assist you in making sure you report claims when necessary and report those clams to the correct carrier.
Examples of things you may want to report:
- Incidents with serious injuries or damage within your jurisdiction
- Tort Notice/Demand Letter and Investigation
- Litigation Hold
Step 2: Time can be of the essence
Some lawsuits have a very short timeframe to file a response in court; some as short as 20 days. EEOC charges also require a very fast turnaround. It is important to report these matters to the insurance carrier as quickly as possible, especially after service of the lawsuit, so there is adequate time to review the lawsuit, determine if the correct carrier is notified, and to assign defense counsel.
Step 3: Report the claim
Either the insured or the broker can report the claim to the insurance carrier. Your broker should have the reporting details. If not, they can be found in your policy. It is important that you follow the reporting directions to ensure that the carrier receives the claim details, is able to set up a claim file and is able to assign to an adjuster. Once reported, the carrier will send you a confirmation notice along with the contact information for the adjuster. A copy of this acknowledgement letter will be sent to your broker.
Step 4: The Coverage Letter
If there is a lawsuit and defense counsel needs to be hired, you may be offered a defense “under reservation of rights.” That means that there are certain claims or certain damages that are not or may not be covered under the insurance policy and the insurance carrier is letting you know about this issue via a letter. For example, Law Enforcement Liability policies typically have exclusions for Criminal Acts. If the incident involves an officer who is criminally charged, there may be a reservation on this exclusion. The letter will further explain the limits of insurance and whether any deductible or self-insured retention applies. If the entire lawsuit is precluded from coverage, a denial letter will be issued. The carrier will advise the public entity that it must defend the suit at its own cost or it may suggest that another type of carrier or a carrier covering another policy period be placed on notice of the matter. If you believe the carrier has missed something in its coverage analysis or the allegations and/or damages have changed by way of an amended complaint, you can forward it to the carrier and ask for a renewed coverage review.
Step 5: Defense Counsel
The adjuster will review the incident or lawsuit you have submitted. If the matter is in suit and there is potentially coverage for some or all of the causes of action, the carrier may appoint defense counsel to represent you. For public entities, the defense counsel typically has a specialty in handling claims against governmental entities and is familiar with the available immunities, tort caps and other issues that are specific to governmental entities. If there are multiple individuals who are named in the lawsuit, they may share the same counsel or be appointed separate counsel, depending on the circumstances.
If your public entity has a claim, it is important to gather all the necessary information needed for an investigation. When in doubt report! See our infographic (below) for some of the documents you may want to consider preparing based on the type of claim. If you have any additional questions regarding the claim filing process, contact your broker to discuss your policy and procedures.