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Your Guide to Liability Claims

Your Guide to Liability Claims

After years of faithfully paying your insurance premium, the day has finally come: you’ve got your first claim. This is why you have insurance! However, you’re not sure what to do next.

Luckily your policy gives you a good idea of what happens next, in a section usually titled “Duties In The Event Of Occurrence, Offense, Claim Or Suit”.

Timing Is Everything

The first thing the policy tells you is that the insurance company expects to be notified “as soon as possible of an offense or ‘occurrence’ that may result in a claim”. Even if the injured party hasn’t filed a lawsuit or made a formal claim, if you expect some sort of a claim from the occurrence, you should notify the insurance company right away.

Notice is particularly important if you have a claims-made policy, such as directors & officers coverage. You could wait until you receive a demand letter or lawsuit, but depending on the timeliness of the notice, the carrier may be within their rights to refuse to defend the claim.

What To Report

So what does the insurance company need to know in order to open a claim file?  The policy is very specific about this, as well. The Commercial General Liability Coverage Form (CG 00 01) reads as follows:

(Property claims are handled a bit differently and will be discussed in another blog post.)

All of the above needs to happen in the event of an occurrence that may become a claim. Should you receive a claim letter, a letter of representation or a lawsuit, the policy advises you to do the following:

It is very important that you cooperate with the insurance company in both the investigation of and the defense of the claim. Failure to do so may relieve the insurance company of any responsibility to defend or indemnify you.

What Not To Do

As stated above, you must cooperate fully with the insurance company in the investigation and defense of your claim. There is one thing you are absolutely forbidden to do as stated in the policy:

If you offer a settlement or make any payment to a claimant without the consent of the insurance company, the company may be relieved of their duty to defend you or reimburse you for any claims payment.

How To File A Claim

Should you find yourself in the position of needing to file a claim, the process is usually very simple:

  1. If you have a insurance broker, contact your broker by phone, mail or email as soon as possible with details of the claim as outlined above. If your broker is Hayes Brokers, you may call them at 800-869-8643.
  2. If you deal directly with an insurance company, the claim hotline number will appear on your policy, or on the company website. Calling your broker may delay the claims process.

Knowing what your insurance company expects from you in the event of a claim is a good way to make sure things go smoothly. If you think you may have a claim, call Hayes Brokers today to find out how to handle it properly.

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