Productive dialogues between you and your claims adjuster can add insights, reduce stress, and facilitate better outcomes.
What should you expect when a claim is made against your firm, or a pre-claim matter is reported? First, you should be contacted by an adjuster and provided with a file number within 24-48 hours of the report being submitted. The adjuster also will likely ask for a copy of the applicable contract and for some background on the project and the problem.
As this unfolds, it’s important to remember that you are their customer – and they are there to be your advocate. The adjuster should have experience with design claims and should be able to give you support and advice. Often, if you treat adjusters as knowledgeable “allies,” they are more likely to respond accordingly.
Adjusters should be there to listen and help you navigate what can be a difficult process; if they feel like they’re a member of your team, communication will be easier, and the entire relationship will go more smoothly.
Once the adjuster has gathered the facts and reviewed the applicable contract, you are likely to receive a Reservation of Rights letter, which may seem contrary to the team approach described above. Indeed, a letter informing you of possible coverage issues may appear adversarial and certainly can make the notion of open communication with the adjuster more difficult.
Recognize that one of the adjuster’s internal responsibilities is to evaluate coverage and prepare and issue these letters. In fact, the letters rarely affect the handling of the matter. And while they shouldn’t be ignored an overreaction can lead to an unnecessarily (and often counterproductive) adversarial relationship.
Instead of refraining to communicate, ask the adjuster to explain exactly what the content of the letter means and to keep you posted concerning any related developments. You may never hear about the issue or issues again. However, if questions persist, consult your broker and ask for their assistance.
Following the initial exchange with the adjuster there should be a mutual strategy or plan between your firm and your carrier.
Communication should be regular, and as frequent as the situation dictates.
Continued communication avoids surprises as the matter progresses. This includes openly discussing topics as basic as when, whether, and whom should be engaged as counsel; what should be expected during the course toward resolution of the matter; whether and whom should be engaged as an expert witness; what the likely expenses will be; and whether and when settlement should be considered.
When communication with the adjuster is ongoing, rarely does a late-developing surprise regarding the claim or any disputed element of it arise – especially if the design professional and the adjuster have discussed and resolved any potential issues as they occur and are in lockstep during the process.
In situations where the relationship with the adjuster is not going smoothly, alert your broker; they may be able to help get things back on track. If counsel has been engaged, remember they represent the design professional as the client (and not the carrier), so they may be another avenue of assistance in resolving differences of opinion.
Another option if the relationship becomes too contentious or adversarial is to speak with the adjuster’s manager, or have your broker become involved to discuss if a replacement adjuster is in order.
There’s no question that having a claim brought against your firm can be a stressful and uncomfortable situation. Your active communication with your adjuster should not contribute to that; on the contrary, the adjuster should be knowledgeable and reassuring. And you both should be focused on achieving the most cost-effective, appropriate, and mutually agreed upon resolution of the problem, so that you can get back to doing design work.
Lauren Martin is a risk manager and claims specialist at Ames & Gough. She can be reached at lmartin@amesgough.com.
