September 28, 2022

Archives for October 2012

Claims Management Tip: Greet Each of Your Reports Each Morning …

Whether you are a claims manager, supervisor or Executive Vice President, make a point to say “Good morning!” to each of your reports every workday. It is tempting to make a beeline to your office, boot up the computer and close the door. You have work to do! You have tons of projects and deadlines. You want to dispense with your real work before you turn your attention to your staff.  Your staff is important, so maybe you will check in and mingle with them after you get some work done.  Right?

Well, maybe not.

As a manager, your effectiveness, however, is measured by what you can get done through the efforts of others. We have all heard the phrase, “People don’t care how much you know until they know how much you care.” Saying “Good morning” each day to reports is a small way of showing them that you care about them as people.

You can’t fake it.  People will sense fakery.  Don’t approach it as though you are running through a checklist.  It need not be anything elaborate or detailed, but it must be personal and heartfelt.  Open-ended questions work well to invite feedback and comments from the claim staff.  Examples:

“How are you doing today?”

“How’s that big claim I heard about?”

“What are we seeing in terms of claim trends?”

“Are you hanging in there with the workload/”

“Anything you need me for today?”

In his book, In Search of Excellence, management author and guru Tom Peters shifts the focus from having an MBA to extolling the virtues of MBWA — “management by wandering around.” The morning greeting to your claims staff is part and parcel of this. The broader issue is not holing up or sequestering yourself from your claims staff.   Many managers espouse an open door policy.

In practice, though, many send subtle or not-so-subtle messages that the staff should stay away. Claim adjusters do not enjoy working for standoffish bosses. That does not mean to gravitate to the other extreme and become a micromanager, either. There is a happy medium. You cannot fake a concern for other people. Adjusters will see through that quickly.

There are four reasons why you should do strive to do a morning greeting to each one of your claims staff:

1. It boosts morale. People feel better about their jobs if they feel that their boss notices them.

2. It gives you a heads up about problems brewing and stewing in the claim department.

3.  It helps you keep your finger on the pulse of the claim department.

4.  It pays dividends by showing your staff that people come first, above projects. In fact, you cannot complete unaccomplished projects without the efforts of your people.

Obviously, there’ll be situations where this is impractical. Perhaps people are traveling or out of the office for any number of reasons. You don’t need to hunt people down when they’re in the restroom.  Nevertheless, as a best practice claims management discipline, strive to say hello engage with each member of your team every day. It is time well spent and invested. It will yield dividends in terms of staff morale. You can’t e-mail it in. You can’t leave a voice-mail. These high-tech tools do not lend themselves well to personal warmth.  It doesn’t have the same texture.

You can have the claims equivalent of a PhD but, if you cannot relate your staff as people and show that you appreciate them and recognize them, they’re not going to work hard for you. So, to boost your effectiveness as a claims manager or supervisor, greet each one of the reports personally in the morning.

What other office “start of day” habits or rituals have you found get the claims staff off on the right foot for the workday?

Adjuster Practice Tip: Attorney Assignments — Don’t Just Mail it In

The “usual” way of assigning cases to outside defense counsel is to mail or email the claim file with a cover letter.  Nothing wrong with this, but go a step further.  Calendar a few days after the assignment gets to counsel’s desk to reach out and phone counsel. Or, instruct defense counsel to call you upon receipt of the assignment.

Take 5 to 10 minutes to

  • discuss the assignment,
  • discuss the scope of the work that the adjuster desires and to
  • ask the attorney to provide some estimate (within 30-90 days) of the cost of handling the case.

This telephone exchange is also an opportunity for the adjuster to add some commentary that may not have fit into the assignment sheet or cover letter. There may be other features about handling the case that you prefer not to put in the cover letter that you can convey to defense counsel by phone.

Do more than just “mail it in” when making an  assignment to defense counsel. Follow-up with a initial, albeit brief, phone call to set the tone, set expectations and forge the foundation for a productive working relationship.

Yes, it may consume a bit more time in the short run. If it avoids misunderstandings, billing overruns or strategic missteps, however, it is time well spent.

Amidst all of the high-tech methods of communicating, e-mail, instant messenger, social media, we can often lose sight that there is a handy technological device that allows us to actually communicate with people in real time. It’s called a . . . telephone.

When making initial assignments to defense counsel, feel free to send a assignment letter, but supplement that by picking up the phone as well to elaborate and provide context for the case assignment.

Any other thoughts on ways to improve the assignment process to outside counsel?  Post your thoughts here or email them to

Policyholder Lawyers Warn of “Top 10 Bad Faith Traps” for Adjusters

On October 4th, I attended for the first time White and Williams’ “Coverage College” in Philadelphia. This was the sixth annual event. Although I had received invitations many times before, this year the stars aligned and I was able to attend.

It was a very informative and impressive event. About 560 people registered for the function from over 100 different companies and nearly 17 different states. If you are into networking and learning about various aspects of insurance coverage topics, this is an event not to miss.

The entire staff of White and Williams puts on a high quality event for people in the claims and insurance industry. If you get a chance to go next year, do it! You might also learn the secret double life lived by Randy Maniloff — by day a mild-mannered coverage attorney but by night, a wild and crazy guy. I always knew that Randy was a standup guy, but now I understand that an entirely different context. (For details, you’ll have to ask Randy.)

Each breakout session was instructed by a pair of attorneys from White and Williams, with one exception. The concluding session featured, not attorneys from White and Williams, but a pair of attorneys from the other side of the fence, the policyholder advocacy side. Attorneys Jay Levin and Doug Widin from Reed Smith LLP’s Philadelphia office gave a lively and fast-paced presentation on “10 Bad-Faith Traps for the Unwary Claims Professional.”

For the benefit of busy claims people who could not attend the Coverage College, I will recap a top-10 list which very few will find as funny, but which is instructive nonetheless in avoiding bad-faith problems. Again, I do not take credit for these but am simply conveying the “Top 10” list presented by the Reed Smith attorneys:

#10.  Claim-handlers who don’t know the rules of policy construction.

#9.  Inadequate reservation of rights letters

#8.  Improper use of panel counsel.

#7.  Failure to maintain an ethical wall between coverage and defense

#6.  Uneducated underwriters who don’t understand the policy and make it hard to argue that the policy was clear and unambiguous.

#5.  Failure to control outside counsel and adjusters.

#4.  Failure to act in a timely fashion.

#3.  The dangerous claim file (such failure to document, pejorative comments, lack of supervisory review, etc.)

#2.  Unreasonable failure to settle within policy limits.

#1. Failing to pay what you agree you owe.

The Reed Smith attorneys probably felt that they were in enemy territory, since they typically are on the policyholder side of litigation, suing insurance companies and criticizing the work and performance of claim adjusters. Nevertheless, the presentation was not in any kind of accusatory tone and was, by itself, worth attending the entire daylong Coverage College.

My only (mild) criticism of the Coverage College was that none of the sessions that I saw or attended allowed time for audience interaction or Q&A. Nowadays, that is a problem. Audiences want the ability (and time) to pose questions. Most participants these days are not content for speakers to just show up, give their little speech, and then leave. People want to be engaged, to have a dialogue and at least have an opportunity to pose questions. The best conference and CE sessions involve a blend of substantive presentations and audience interaction. Often the latter turn out to be more value-added than the former. In fairness, the sessions were budgeted for 45 minutes piece, in which case it might be worth considering lengthening the sessions for future Coverage Colleges.  Suggestion:  more dialogue, less monologue.

Again, this is a mild criticism.  Notwithstanding the lack of Q&A opportunities, White and Williams’ Coverage College has to rank as a top level continuing education opportunity for any claims professional!

Book Review: Dennis Wall’s “Litigation and Prevention of Insurer Bad Faith”

Litigation and Prevention of Insurer Bad Faith, Third Edition, by Dennis J. Wall, (2 volumes), West Publishing, 2011, $473.

Whether you are a claims person or an attorney working in the area of insurance coverage, you cannot toil in the vineyard of bad-faith without encountering at some point the name of Dennis Wall. Wall is an Orlando, Florida attorney who specializes in bad faith. He has recently updated and expanded his seminal work, Litigation and Prevention of Insurer Bad Faith. This two volume set is now in its third edition, published by West Publishing Company.  The fact that what was once a single volume has now morphed into two, may be an indication of the burgeoning nature of law and litigation in this particular area of the legal landscape.

Volume 1 subdivides into two parts: Introduction and Background, followed by a lengthy section on Third Party Claims.

Volume 2 tackles First Party Claims, Damages, and wraps up with a Summary and Conclusion.

With regard to third-party claims in volume one, Wall covers:

*  Standards of Conduct toward Insureds

*  Responsibilities of the Insured

*  Insurer defenses against actions by the insured

*  Relations between Primary and Excess Carriers and Reinsurers

*  Actions by Others and Insurer Defenses

*  Discovery from Insurers concerning their handling of third-party claims

In Volume 2, Wall tackles the following aspects of first party claims: standards of insurer conduct, responsibilities of the insured and presenting first party claims, insurers defenses against first party actions by insureds, and discovery from insurers.

Additionally, Wall includes eleven handy Appendices that range from an initial letter from defense counsel to the insured, a sample letter informing insureds of case progress, liability insurers’ guiding principles, and sample jury instructions.

This is the third edition of a book that spans decades.  The first edition debuted in 1985.  Edition number two appeared in 1994.  This latest, expanded, two-volume resource comes 17 years later, so it was due for an update.

Admittedly, this is not the kind of book that anyone will curl up with to read cover-to-cover.  Even the most die-hard insurance and claim geeks will not mistake it for 50 Shades of Gray.  Its target audience and market is lawyers who do bad faith work.  Some adjusters may find the strong dose of legal case citations heavy sledding, their eyes glazing over.  What claims adjusters are looking for is practical guidance on what to do to avoid bad faith pitfalls in claims-handling.  Such lessons can be distilled from Wall’s latest book.

Every claims office should have a copy of Litigation and Prevention of Insurance Bad Faith.  It’s too late now to rename the book, but perhaps it would have made sense to title it, Prevention and Litigation of Insurance Bad Faith.  Elevate prevention above litigationThe more time and effort spent on prevention, the less time and money bled on litigation.  Prevention is often the best cure.  More time spent on one may avert having to spend time (and much money) on the other.

One of the biggest risks that insurers and other claim organizations face these days is bad faith.  One preoccupied or overloaded adjuster mishandling a loss may “uncap” policy limits.  Aggressive claims-handling may spur juries to award punitive damages.  Lay jurors do not feel “warm and fuzzy” toward insurance companies, despite the prevalence of geckos, cavemen or perky Flo on TV commercials.  None of these characters will be hand-holding or adjusting the claim when the rubber meets the road and a policyholder reports a loss.  This is the “moment of truth” when the marketing gloss has receded and insurance buyers start to see the true value (or lack thereof) of their insurance purchase.  Often, they learn — too late — that the “cheap quote” the desired for coverage was cheap for a very specific reason.  In insurance coverage and service — as in other realms — you get what you pay for.

With a tight economy, bad faith risks are unlikely to subside.  Economic stresses may embolden policyholders to be more aggressive in pursuing insurance recoveries.  Financial pressures from shareholders, green eyeshade folks and the corner offices may impel insurers to embrace hard-line policy interpretations and claim-handling practices.  This yeasty mix offers a recipe for bad faith claims and lawsuits.  Dennis Wall’s updated treatise offers a training and practice blueprint for claim operations who not only want to defend themselves but — perhaps more importantly — determine how to stay out of bad faith hot water to begin with.

Insurers themselves are in the business of risk — quantifying it and managing it. Wall’s book can be an indispensable tool for any claims organizations own risk management program that aims to address the perils of bad-faith. In an insurance and risk context, we can say to the claims industry, “Physician, heal thyself.”

A book like this needs to be more than simply credenza decoration. It needs to be frequently used, consulted, thumbed through, reviewed and pulled down from the shelf. If claims staffs read and heed the principles articulated in Litigation and Prevention of Insurance Bad Faith, they will go far toward inoculating themselves from bad-faith “viruses” and position themselves for more effective defense against any such claims which do arise.


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