Tips For Maximizing Insurance Coverage

There are certain tips that a CFO, Treasurer, In-house Counsel and Risk Manager should know when they purchase insurance for their company and when they are presenting a claim to an insurance carrier.  The following is a list of tips SandRun Risk consultants frequently advise potential clients.

1. Know your company and its business inside and out so that you know what policies are necessary and the level of risk the company can tolerate.
2. Work closely with the broker during renewals. Have face-to-face meetings with the brokers and insurance underwriters at different times throughout the year and build a relationship directly with the insurance companies. 
3. Review the policies carefully both before and after they are issued, to confirm that the coverage issued is correct.  If it is not correct, get it corrected.
4. Remember, an ambiguity in the policy is usually favorable to the policyholder.
5. Carefully review the notice provision of all policies, including umbrella and excess policies. 
6. Have a good document retention policy. 
7. Store policies electronically. 
8. Make sure the company is provided with copies of all policies.
9. Err on the side of noticing.  Let the insurer decide if a claim is covered.  Alternatively, retain an insurance lawyer to evaluate the claim and offer an opinion on whether there is coverage.
10. Take the time to notice a claim early.  Avoid a late notice coverage defense from the insurance carrier.
11. Make sure that the insurer is providing a full and complete defense.  The duty to defend is broader than the duty to indemnify.  The duty to indemnify is based on actual facts while the duty to defend is based on theoretical facts and assumptions.
12. Read and understand the reservation of rights letter from the insurance carrier.  Respond to it.  Always seek reconsideration for any coverage denial.
13. Adjust your claims handling strategy to the insurance company involved.
14. Determine the financial goal of the insurance company personnel before trying to negotiate a settlement of a claim.  The policyholder should be prepared to retain its own insurance coverage counsel.
15. Either negotiate your preferred choice of counsel when purchasing the insurance policy or point out the potential problems when/if panel counsel is assigned.
16. Object clearly and promptly to any billing guidelines proposed by the insurance company.  Establish a regular protocol to submit invoices and track payments.
17. Before signing a settlement with an underlying claimant, be sure that the insurer has been given an opportunity to approve or know about the settlement.  Avoid the voluntary payment argument.
18. Retain an insurance lawyer to assist you on insurance coverage matters.