How and When to Provide Notice of an Insurance Claim

The early stages of an insurance claim are often the most critical. Your phone rings – there was an accident at one of your properties, a bad environmental report came in, some worrisome information from an employee is reported. Make no mistake: potential lawsuits are in your future. Even the threat of a claim (depending on its severity and scope) is enough to warrant giving notice to your insurance carrier as soon as possible. The strategic question becomes: who should notice the claim to your insurance carrier, and what should be included?

A real estate investor must avoid giving its insurance carrier potential grounds to deny coverage, thereby putting cash flow, or worse yet, the property at risk. Below are some best practices real estate companies should employ when making an insurance claim.

Put together the right team and engage them early. The outset of an insurance claim is where an experienced risk management team of attorneys and insurance brokers can deliver the most value. A denial of coverage can pose an existential threat to a property. The right team will be instrumental in securing coverage for a claim, and thereafter, will serve as your claims managers.

Savvy insurance adjusters may ask their insureds leading questions. They may push for certain admissions or obtain certain statements of fact, all taken down in notes or a recording – and all of which mightprovide the basis for claim denial.

Carriers point to the value of reduced billing rates of panel counsel, but those reduced rates might disproportionately benefit the insurer who is paying the fees once your claim is accepted. Moreover, the early stages of a claim or lawsuit are always stressful, and businesses often grow frustrated bringing new panel lawyers up to speed on their business practices, particularly if familiarity with the business is a key component of the claim.

• Keep Your Preferred Team Involved. Even if you are forced to use panel counsel by your carrier, a good insurance broker will educate your panel counsel on your business, focus them on the key issues and manage the claims process. Some businesses feel panel attorneys can be beholden to the insurance carrier, so they will engage their preferred legal counsel to oversee the panel attorneys and help manage the litigation.

In summary, before your company unknowingly puts insurance coverage at risk, have your insurance broker and attorneys work together to best present your claim to your carrier. Putting your best foot forward minimizes the risk of claim denial, and your team members' different perspectives will allow you to see all angles of a claim. After your claim is submitted, continue to leverage your team to manage the claims process, limit potential liability, and reduce the burden of litigation on your business.

Ryan Kirby is the General Counsel of IOA (Insurance Office of America), a national insurance agency with over 1500 employees. Prior to IOA, Ryan was the Chief Legal Officer & General Counsel of Atlas General Insurance Services. Ryan holds a B.A. in English from the University of Colorado at Boulder and a J.D. from the University of San Diego School of Law. Ryan is a California licensed attorney, and nationally licensed insurance broker.