September 22, 2021

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!

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