Navigating your claims process often seems like a daunting task. However, it doesn’t have to be, if you are aware of a few policy aspects that require vigilance. As your claims advocate, we ensure that the carrier abides by its obligations under the policy, but here are few pointers of what you should keep in mind.
“One of the most common bases on which a carrier may deny coverage is so called late notice,” says Audrey Samit, Vice President of Claims Management at CRIO, Inc. “Therefore, the most important aspect of first handling a claim is that it be reported timely.”
Another basis upon which the carrier may deny coverage is when the Insured settles a matter without obtaining the consent of the carrier.
“To avoid this coverage issue, we strongly recommend that neither you nor your counsel engage in any settlement discussions, nor make or accept any offers of settlement, without first advising us so that we can update the carrier accordingly and attain its consent,” adds Mrs. Samit.
Policies are typically “duty to defend”, which means that it is the carrier’s right and duty to defend a claim against its insured or “non-duty to defend” which means that the carrier does not have the right and duty to defend. Whether a policy is a duty to defend or non-duty to defend, it is important for an insured to advise the carrier if it seeks to engage counsel. Often, an insured will receive a lawsuit and immediately hire counsel to answer the complaint without first noticing the matter to the carrier and advising that it has engaged counsel. While such action may not ultimately compromise coverage, it may create a situation where the carrier declines to recognize those legal costs which were incurred without its consent and which would have otherwise been covered by the policy. Moreover, and typical with many carriers as to non-duty to defend policies, the carriers have a roster of specific firms approved for use by the insured and the policy language requires compliance. We should also note that there are circumstances where an insured may engage its own counsel despite the policy language and this is a matter addressed on a case-by-case basis. Understanding your policy and your obligations under it as an insured are crucial to ensuring, to the best ex-tent possible, that coverage is not adversely impacted.