By Ziyad I. Naccasha
Effectively managing claims from the moment they arise is critical to minimizing risk, preserving relevant facts, safeguarding coverage, and positioning matters for efficient resolution. A clear workflow helps ensure that nothing is missed and that all stakeholders remain aligned. Below is a practical framework for handling new claims in a structured and disciplined way.
1. Initial Notice of a Claim
When a new claim is received, whether in the form of a pre-litigation demand letter, a dispute notice, or notice of pending litigation, the first priority is preserving the relevant data and facts and making sure that nothing pertinent to the claim is deleted from your system. Receipt of the claim should be acknowledged promptly, in writing, with confirmation that all documentation has been received. Be sure to calendar all relevant deadlines and let your lawyer know what you received.
2. Indemnification: Is There Someone Else Responsible?
If the claim that is being made stems from an act or omission of a third party, do you have an agreement with that third party that requires them to defend and indemnify you/your company? If so (and even if you do not have such as an agreement), tender the claim to that third party or have your counsel do so.
3. Coordinating with the Insurance Representative and Carrier
Once the claim is logged internally, the next step is to promptly notify the insurance representative and provide him or her with copies of all relevant materials. The representative will forward the information to the insurance carrier. At this stage, coverage details and applicable policy limits are identified, and you will be connected to an insurance claim representative who may want to have a confidential interview to discern the facts. If the insurance carrier assigns outside counsel, prompt communication with that counsel is essential. Initial contact should include sharing documents, aligning roles and expectations, and exchanging early impressions regarding strategy and exposure.
4. Issuing a Notice of Representation
A notice of representation should be sent to opposing counsel as early as possible. This communication formally advises that the party is represented by counsel and asks that all future correspondence be directed to the legal team, helping to centralize communications and avoid missteps. Cooperating with the insurance counsel is required by the insurance policy.
5.Listing the Claim on your Policy Renewal
When filling out the policy renewal, whether the claim has resulted in a lawsuit or arbitration, it’s important to list the claim (or any circumstances that could result in a claim) on your renewal application. Failure to list a claim in that renewal application can form the basis of later being denied coverage.
6. Ongoing Communication and Settlement
Consistent communication throughout the lifecycle of the claim is key to effective management. You will need to timely cooperate with the insurance defense counsel in responding to information requests, discovery and possibly being deposed and testifying at trial. You also need to have the insurer consent to any settlement negotiated. Failure to cooperate or seek consent could jeopardize the availability of your coverage.
While this framework is meant to be general, these steps are foundational and should be followed when a claim arises. Best wishes in efficiently resolving your claim!
Carmel & Naccasha Partner Ziyad I. Naccasha — has successfully guided firm clients on all aspects of the insurance claims process, from notices to litigation and release. If you have any questions about this article, or for further information regarding the insurance claims process, please contact Z at (znaccasha@carnaclaw.com) or (805) 546-8785.
About Carmel & Naccasha
Founded in 2004, Carmel & Naccasha has offices in San Luis Obispo and Paso Robles, and is a well-established firm, deeply committed to providing excellent legal services to our clients. The firm’s lawyers pride themselves on having open and consistently interactive relationships with clients. We listen to their needs and rely on our clients’ views, goals and feedback to help us plan strategies, chart appropriate courses of action and develop cost-effective solutions. Our attorneys have a broad range of legal experience in the areas of business transactions, real property, land use, commercial and employment litigation, trusts and estate planning, municipal law, and insurance coverage. For more information about us, visit the website at www.carnaclaw.com
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