Understanding how a policy is built and the methodology behind pushing a claim through to the full payment of the policy can often be complex and overwhelming. However, following the panel discussion, "Claims payments: it takes a village," led by Nicole Ng, National Claims Leader at JLT Canada, Thomas Donnelly, Founding Partner at Thomas Gold Pettingill LLP and Dave Robinson, Senior Manager at Deloitte, at the 2017 RIMS Canada Conference that took place in Toronto from September 24th – 27th, both building the policy and processing a claim seemed much more digestible.
As explained by Ng at the beginning of the session, "Ensuring you have the proper insurance team in place is critical to the proper placing of your policy [and] the coverages afforded to you" when processing a claim.
The insurance 'team' that Ng refers to generally includes the Insurance Broker, the Claims Advocate, the Lawyer and the Consultant/ Forensic Expert.
The Insurance Broker, is the most integral part of the team. Commonly referred to as the "quarterback" by both Ng and Robinson, they understand your business and will advise you on what specialist you want to hire and when they are required.
Working with an Insurance Brokerage is key when building your policy or handling a claim: it has several people working within it and has access to various specialists, familiar with all kinds of businesses. The broker, whether an account executive or a claims advocate, acts as the intermediary between you and your insurer. They work with their teams and your insurer to fully evaluate your needs and understand your organization so that in the event of a loss, they are able to assist you and ensure that the full valuation of your policy is afforded to you. Full valuation can include the initial review of the policy and/or coordinating with a lawyer, forensic specialist or the insurer, to ensure that the policy is in a presentable state where the insurer can pay it, which is the most critical part of the insurance claim.
As noted by Donnelly, "a Broker is not a commodity. [You] need a Broker with expertise in your industry…someone who will actually visit your facilities and production plants and operations – if [they] don’t know your risk they can’t place proper coverage." He added, "…it is important to constantly update your broker when new developments, projects and risks arise." If your Broker is unaware of changes, it may slow the process to get the claim paid.
"Your policy is a critical agreement between you and your insurer", Ng pointed out. "It is the contract that the insurer relies on to make sure the needs of your business and any loss you have experienced at the business is given the coverage you intended" she further explained.
Managing your policy is almost as critical as the policy itself. Donnelly, Ng and Robinson agreed that careful management of the policy is essential when dealing with a claim. Donnelly suggested that "…you know where [they] are [and that] they’re properly stored and archived, so that when you need a policy – you can pull it up in 2 minutes."
Ng added to his point, "…build a historical database of all files that you have," whether they are placed by your current Broker or not. It is especially important in the event of a loss that requires a policy to have been placed in prior terms. For example, with crime policies, Ng continued, "…we see where we can trigger date of loss, but you have to show that you had crime insurance for the past several years before that – it may be on the policy that we’ve triggered, but the insurer won't want to pay for coverage that you didn’t elect to buy in that time."
Do not wait for a peril to see if your policy is conducive to your needs. Having an audit of your policies every few years is critical as the policy is created to cover anything that may give rise to a claim. It is important to work with a Broker or Claims Advocate who is proactive in their approach to claims and who fully understands your business needs and how a loss could impact your organization. If you have any gaps in coverage they should find the appropriate products, whether in domestic markets or overseas, or ensure that there is no product available. Regardless of the outcome, Ng emphasized that the Broker or Claims Advocate should, "walk you through it so you have full understanding of what you’re paying premium for and the expectation of what the premium will get you if you have a loss."
To provide a legal perspective, Donnelly added: "lawyers are brought in when a claim happens. If you don’t have a policy in place or you don’t have the right coverages in place before the claim happens, it is too late." His comment stressed the importance of being proactive when creating your policy, in addition to working with the right Broker and Insurer to obtain proper insurance.
If a claim does arise, each panelist urged that you speak with your Broker or your Claims Advocate first. Ng stated: "They should have a claims protocol in place; the people you need to engage within your organization, people to engage in the Broker's firm, people they will put in line with the carrier. They will create your service team on all sides to make sure your needs are met – they are a good resource."
Additionally, your Claims Advocate or Broker will sit with portfolio management teams to maintain constant engagement behind premium and service delivery. One of their main concerns is to get you right price with the right type of coverage. However, do not confuse "right" price with low price. Ng reminded the audience, "You can always get a low price, but that low price [might] come with a carrier that doesn't always pay claims – that's why they can guarantee a low price."
For more information on building your insurance policy or processing a claim, please contact Nicole Ng, National Claims Leader at ClientFirst@jltcanada.com.