At RWH Myers, we often describe what we do as “claim preparation,” which refers to the tangible part of what we do, but there is so much more to our craft. When you have a "big claim," like the many companies that were impacted by recent hurricanes and wildfires, insurance placements are expected to respond. But just because you have a policy doesn't mean your claim will be prepared properly, quantified accurately and paid quickly. It depends on the preparation and execution of your claim team.
Bill Belichick, the Head Coach of the New England Patriots, has won more super bowls than any other coach. Whether you’re a fan or not, you have to appreciate the results of his leadership. His famous mantra is "do your job!" It is simple yet profound, and it's relevant to success in any team endeavor. Belichick preaches it over and over because he knows that winning is dependent upon each player doing their job, the right way. Nothing more. Nothing less.
A claim team should function much the same way, but the preparation can begin even before an occurrence. Having a skilled team with defined jobs and being well prepared to execute, plays a vital part in winning a big claim. Let’s explore the many jobs there are to do during the claim process and consider how preparation and execution may influence the final outcome.
- Communication - At the center of all communication should be a risk management professional who understands the insurance policy, the personnel and the goals of the organization. It is important that the flow of information and communication is managed at all times. Nothing should be shared or said without this person knowing about it.
- Coverage Interpretation - Brokers and attorneys are available to interpret coverage and should be leveraged to assist risk management in resolving any coverage disputes. Policy interpretation is necessary to determine how coverage applies and how deductibles are to be calculated for each cause of loss. It doesn’t matter how well a claim is prepared until all coverage issues are resolved.
- Information Gathering - There will be many requests for information and someone inside the organization should be assigned to produce all necessary information to adequately document the loss. This will be a daunting task due to the shear volume of data that will be necessary to prove the loss, but the burden will be lessened under the direction of an expert claim preparer.
- Strategy - By definition, strategy means “a plan of action or policy designed to achieve a major or overall aim.” The plan of action defines "who" will do "what" and in what time frame. Having experienced claim specialists on the team to set the standards of performance and to anticipate obstacles will keep the claim moving forward toward the goal.
- Technical - For property losses, there may be conflicting opinions about the extent of damage, such as whether something can be repaired or needs replaced. Policyholders should have technical experts on the team to evaluate the property or equipment in question and to work towards an agreeable solution.
- Quantification - Measuring the impact on earnings is a business interruption accounting exercise that encompasses an understanding of the company's business, it's operations and time element insurance. Calculations will be audited by a forensic accountant that works for the insurer. To achieve a level playing field, an independent forensic accountant is well-suited to quantify the loss on behalf of the insured.
- Documentation – It’s the policyholder’s duty to make their claim to their insurers. The claim package should consist of summaries, listings, source documents, invoices, costs and calculations. All claims will be met with adjustment scrutiny. A well prepared and properly supported claim will deter opposition and settle faster.
The amount recovered from insurers will be determined by how well everyone does their job. If there is any confusion on your claim team about what to do, who should do it and when it should be done, it will influence the outcome. With the right team, all doing their job, you’ll have the best chance to win the big claim and enjoy a fast and fair recovery.
If you incorporate this concept into your claim approach, the next time you are in a big claim, the outcome may not involve confetti, but you will be recognized for a job well done!