November 16, 2018

Archives for August 2013

Practice Tip #8: Prepare Upper Management for Dynamic Claim Scenarios

Last week, we discussed the dynamic environment in which product liability claims unfold and evolve. That has certain operational implications for adjusters who handle these claims. This is particularly true with regard to dealings with upper management.

Bad News

Let’s face it, we all want to be in the position of delivering good news to the boss. No one favors delivering bad news to higher-ups. Like it or not, fair or unfair, there is a tendency in the corporate world to shoot the messenger and to associate failure with the person who delivers the unwanted message.

Resist this temptation and tendency.

Don’t sugarcoat things for upper management by giving rosy assessments. Let them know that many factors which are uncontrollable and unforeseeable could change reserves, case value and resolution strategy. Err on the side of over-communicating with management.

Create a paper trail so no one can ever say, “You kept us in the dark!”

When it comes to case outcomes here, success has a thousand fathers but failure is an orphan. 

That orphan will most likely be YOU, not the underwriter who wrote the account.  The underwriter will likely have already collected his or her bonus for meeting those ambitious premium growth goals. And boy, did they add that premium! Unfortunately, it came at the cost of writing some marginal accounts which are now spewing claims like a fire hydrant. Well — you can’t have everything, can you?  But that’s your problem, right?

So, consider all internal constituencies on the org chart that should be apprised of major case developments or emerging loss trends.  Do more than consider, communicate. Do it in various means and document. If this sounds like a CYA, cover-your-ass strategy, then so be it.

Wouldn’t you rather have the problem of delivering good news to the boss after setting grim expectations than delivering bad news after painting a rosy picture?

Practice Tip #7: Brace for New Circumstances Driving Changed Claim Strategy

Defending drug and device cases is challenging because of the dynamic environment in which such claims evolve.  To paraphrase a popular bumper sticker, “Stuff happens!”

Stuff Happens

So, buckle your seatbelts for changed circumstances that may and should alter your best laid plans and strategy.  For example …

The policyholder has a change of heart gets “cold feet” about defending the case after you have spent many thousands of dollars in the effort. Surprise!

*  Your insured saved money by buying the minimum liability limits and – on a large damages case – – changes its mind at the 11th hour and tries to set you up for bad faith with a “hammer letter.”  Surprise!

*  The excess carrier you haven’t heard from in years suddenly surfaces, pops out of the woodwork seizes a high profile and demands that you disgorge your full policy in case you doubt value as that high. Surprise!

*  Your well-crafted strategy in the case craters when bad documents surface during your policyholder’s production. Or, maybe your insured recalls the product during the pendency of the claim or has a scathing TV exposé on “20/20.”  Surprise!

Welcome to the world of life science product liability claims.

In handling drug and device product liability cases, you must be flexible and not be shocked by the vicissitudes of change that can blow you off of your original course. The not due to any fault or flaw in the claims handler, but simply comes with the turf and territory. Of course, all claims evolve in dynamic, ever-changing environments, but there is a difference in degree and some of the highest degrees seem to be in the life science arena.

So … what are the operational implications of these realities?  What does this mean in terms of how the claims-handler deals with upper management and other important constituencies?

Stay tuned for next week’s post, where we discuss this!

Practice Tip #6: Realize the Insured’s Psychic Investment in Claim Defense

Aerosmith sang ” Hey j-j-jaded …” in its song titled (what else?) . . . “Jaded.”

Bored

Becoming jaded is an occupational hazard that adjusters must be aware of and guard against, however.  After handling hundreds or thousands of claims over weeks, months and years, we can start to take a ho-hum attitude about new claims that come along.

To us, it’s another claim.

To policyholders, it’s their Baby.  This is particularly true when it comes to product liability claims. So much of their corporate existence is tied up with the product. It’s not just a product.  It’s the reason for their existence.

It’s not like an automobile accident involving a fleet truck or car.

It’s not like a slip and fall claim.

It’s different.

Product liability claims are often emotionally charged by virtue of the policyholder’s psychic/emotional investment in defending the product as a tangible personification of its corporate identity.

The insured has not only a financial but also an emotional investment in its product and in defending it.  Emotions can run high, especially when the insurer wants to settle and the policyholder wants its day in court. 

These emotions can erupt even before the fork in the road moment in choosing between settlement or defense. They can surface right at the outset of the claim when the insured once a $600 in our law firm to defend them in the insurance company wants to pick from its own panel of defense counsel, who bills at $175/hour. The insured enters the fray with a “spare no expense” attitude. The insurance company and adjuster often enter the fray with an attitude of, “let’s see what’s most cost-effective.”

This dynamic impacts the financial outlay to defend the claim. This isn’t “just another case.” To policyholders, they’re often in a fight for survival.

As claims people, it’s tempting to view these files like “crates on a loading dock” — just another claim. 

The insured views the files like rare antiques. 

We should handle the claims like that. 

It’s okay to life Aerosmith. If you’re going to handle and manage product liability claims harmoniously, however, we must guard against the professional peril of becoming … j-j-jaded

Reflections on Claim Friendships: Tribute to Dave Bauer (1930-2013)

Foxhole friendships are often the most enduring.

Bauer

Claim adjusters experience lots of stress and pressure. No man is an island, nor is any claims person. Often, the friends you make in your fellow claim associates grow into something more and forge strong bonds. We work not just for paychecks and job stability, but also as an ancillary benefit sometimes develop close friendships with colleagues.  Vendors become more than just service providers.  Co-workers become more than just business associates. 

They become friends.    

Today, I depart from my usual “Claims Coach” commentary on loss adjusting topics.  I know that in business, we’re supposed to blanch emotion out of the recipe.  Button-down, stiff upper lip. Emotions play no role in the rational decision-making governing business decisions!

However, today I learned of the passing of a longtime friend and claims colleague, Dave Bauer, who had a 40+ year career with GAB Business Services.

I met Dave in 1986, when I was still a “young turk.”  He was an eminence gris in the home stretch of a long claims career. I was the client and he was the vendor on a program involving product liability claims against medical equipment manufacturers.(Dave would never say the words eminence gris – he’d just call himself an “old fart.”)

In my 22 years there, I knew Dave as a resourceful and creative claims professional. He had no interest in the burdens and headaches of being a claims supervisor or manager.  He had no stomach for the politics and positioning of working in a Home Office.  He was instead a technical virtuoso in getting claims settled and moved along. Despite his gruff exterior, he was a kind man with a wry sense of humor.

An ex-Marine, Dave listed his educational pedigree as being a student at the School of Hard Knocks, University of Life.   He was a no-nonsense guy with an unerring BS-detector, able to smell a manure pile from a mile away. 

One of my first exchanges with Dave was at the DRI Drug and Device conference in Coronado, California in May 1989 at the Hotel Del Coronado. Dave and I did a joint presentation to defense attorneys on our fledgling claims program, trying to interest them in working with us.  The audience was packed and standing room only.  While I expected little from the droll old dude sitting beside me, Dave blew me away, had me doubled over in laughter by his deadpan but extremely effective and funny delivery of his message. He had a way with defense attorneys that came across as abrasive and abrupt, but was effective and to-the-point.   He sounded just like the guy in the Motel-6 ads who says, “We’ll keep the lights on for you …”  His presentation was lights-out!

Thereafter, Dave and I often presented together at conferences.  Dave often teased me later that, whenever he spoke,  I’d have a stopwatch on him to ensure he kept to our agreed-on time allotment.  I gently corrected him, saying that when he spoke, I didn’t use a stopwatch but instead substituted a calendar.

Admittedly, Dave had a quirky, jaundiced view of the legal profession.   At an insurance defense conference my company hosted at a resort location, I mentioned that two of our outside defense attorneys took advantage of the romantic setting to get married.  Dave disapprovingly said, “I don’t mind if two lawyers get married, so long as they don’t breed…”

That was classic Dave Bauer.

Eventually, Dave retired but I still kept in touch with him and he with me. When you’re in a corporate world and then leave it as I did two years ago, you find out who your true friends are. Many people who sought you out, hung on every word now treat you as The Invisible Man.

And to them, you are. You are no longer a source of business. You are no longer a client or a prospect. You are in that netherworld of anonymity. When you leave a corporate setting and set out on your own, you learn who your true friends are, the people who value you for the relationship itself, who don’t just see you as a source of business and referrals.

Dave was one of those people.

Our relationship morphed from a business exchange to a close friendship. He was one of the most creative claim professionals I have known in my three-plus decade career.   (Once, he included the offer of a bass-boat to get a claim settled with an avid fisherman.  In another, he offered a donation to the claimant’s church.)  But beyond that, he was a terrific husband, father, and grandfather.

I will remember Dave not just for his claim prowess. I will remember him for his love of being at the racetrack and betting on the horses.

I will remember him for his passionate devotion to the St. Louis Cardinals.

He was a blue-collar, lunch pail kind of guy without pretension, an ex-Marine who — despite his gruff exterior — was a kind and friendly man.

At 80-some years old at the end, Dave had a great run and a full life. In recent years toward the end of the line, he suffered a succession of health problems. I used to kid him that his medical insurance guidelines did NOT entitle him to his demand that nurses give him three sponge baths a day. ..

I am honored to have worked with him and to have known him. Though I shed tears at the news of his passing, I rejoice in his life and the legacy – – both professional and personal — that he leaves behind in the lives of those he touched.

Godspeed, Dave – – I will never forget you…

YouTube You Tube     Facebook Facebook     Twitter Twitter     Linked In Linked In
Disclaimer   |   Sitemap   |   CLM Advisors
Quinley Risk Associates, LLC © 2012. All Rights Reserved.
Website support provided by Aivilo Web Solutions, LLC.