June 24, 2019

Invest in Evidence Preservation CE for Adjusters to Thwart Spoliation Risks

Insurance companies and third-party plaintiff administrators work in the realm of risk and risk management. Often, however, they can become oblivious to the risks which they themselves face.

Invest in Training

It’s like the proverbial cobbler’s children who ran around barefoot. Charity not only begins at home, but so does sound risk management when it comes to insurance companies and claim administrators.

One of the risks that they face is the risk of evidence spoliation. To guard against inadvertently destroying or altering evidence, which could be key to a piece of civil litigation that is the subject of insurance, carriers and claim entities should invest in adjuster training. They should sensitize adjusters to the perils of spoliation of evidence and, more importantly, invest time periodically promoting sound/best practices for evidence preservation.

Training can take many forms: periodic claim department meetings, case studies, checklists and resources in electronic form, internal webinars, “brown bag” lunch-and-learn sessions, periodic outside guest speakers.

Companies should see training as not just a cost but rather an investment. Moreover, they should view such training as an ongoing process, not a “one-off” phenomenon, not something that you do once, check off of a checklist, and then feel that you have done all there is to do.

Failure to invest in adjuster training on spoliation can create its own costs and liabilities. Companies should not assume or presume that adjusters are attuned to this risk. To paraphrase a bumper sticker, “Stuff happens” and unthinking adjusters can get themselves in situations where they inadvertently discard a key piece of evidence or fail to take reasonable steps to ensure that key evidence is preserved by someone else.

This evidence may involve a component of an automobile involved in an accident, a key piece of evidence in a fire cause and origin investigation, or a household product that caught fire and triggered a product liability claim. Bungling evidence preservation can create insurer liabilities: claims of negligence, bad faith, etc.

Thus, spoliation prevention policies, procedures and education are part of an insurer’s own risk management plan. Further, having sound practices to thwart evidence spoliation enhances subrogation opportunities and thereby stems financial leakage! This can create one of the few times where the Claims department can be a source of incoming funds. When this happens, it helps to blunt the “usual” knock on claim units that we’re “cost centers” and a “Black Hole” that costs money but never generates any!

The take-away: make spoliation prevention and evidence preservation sensitivity training and best practices training an integral and recurring part of continuing education programs for adjusters and claim staff. It is an investment which can repay itself many times over!

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