Rancho Mesa's Alyssa Burley and Vice President of the Human Services Group Sam Brown discuss the importance of reporting claims to the carrier right way.
Show Notes: Subscribe to Rancho Mesa's Newsletter
Director/Host: Alyssa Burley
Guest: Sam Brown
Producer/Editor: Megan Lockhart
Music: "Home" by JHS Pedals, “News Room News” by Spence
© Copyright 2024. Rancho Mesa Insurance Services, Inc. All rights reserved.
Transcript
Alyssa Burley: Hi, this is Alyssa Burley with Rancho Mesa's Media Communications and Client Services Department. Thank you for listening to today's top Rancho Mesa news, brought to you by our Safety and Risk Management Network, StudioOne.
Welcome back, everyone. My guest is Sam Brown, Vice President of the Human Services Group with Rancho Mesa. Today, we’re going to talk about why it’s important to report an incident to the carrier right way.
Sam, welcome to the show.
Sam Brown: Thanks. Glad to be here.
AB: Now, businesses purchase insurance to transfer financial risk to a third party as a way of protecting their organization against claims of liability.
So, what must the policyholder do to ensure this obligation is fulfilled?
SB: Yeah, Great question. And really, the obligation that we're talking about is a very simple but important line that's found in the ISO general liability form.
And the way it reads is, “we will pay those sums that the insured becomes legally obligated to pay as damages because of bodily injury or property damage to which this insurance applies.”
Now, the best way to make sure that this obligation is fulfilled is to report incidents as soon as practical.
AB: Okay. So, what types of occurrences need to be reported sooner rather than later?
SB: Well, per the ISO general liability form, occurrence means “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.”
So really, what that's trying to say is if an incident occurs that could reasonably result in a lawsuit or claim, you want to report it right away.
AB: Okay, so policyholders should read the policy language and discuss it with their brokers so they are sure they understand what types of incidents need to be reported and when. So, is there a legal definition for when they need to actually report these incidents?
SB: Yeah, that's a great question. Honestly, it's one that when we're sitting in our pre-renewal meetings or proposal meetings with our clients, it's one of several concerns that comes up, which is, which we already discussed, what type of incident needs to be reported, how soon, and what will this do to my future rates? Which are difficult questions to ask and I understand, you know, the apprehension, but the bottom line is you don't want that apprehension to come at the cost of triggering coverage or triggering protection. And as far as what you said, which is a vague term of as soon as practical, the court cases that were made available in some of the articles that I've read, really do not make it clear for us. You could say it would be 30 days in some instances, a year in some. Bottom line is, you don't want to find out what is too late. So, report the incident right away without delay.
AB: Okay, so as soon as you know about it, report it.
But why are some policy holders leery to report an incident when it happens?
SB: So I think that everyone understands that carriers are going to be scrutinizing the claims history and the loss runs, which is going to show both incidents or notice only items, as well as true claims. But honestly, during the underwriting process, incidents don't carry much weight, especially if there's no dollars attached to it because it's just us putting the carrier on notice. It's really the open claims that are going to be scrutinized greatly. So I just think clarifying that to the policyholder and the client is going to make them feel at ease and really help them to understand that this is really for their own protection.
AB: Yeah, we, we want our clients to report any incident that could result in some sort of claim, lawsuit, anything like that that you mentioned.
Sam, can you give us a couple examples of an incident that should be reported to the carrier?
SB: Sure, absolutely. These are a couple of real-world examples. So, a nonprofit client that has a secondhand or thrift store gave me a call because an elderly patron who was shopping had a pretty bad slip and fall. And it was recorded. It was on video. But they called me to say, hey, is this something? Because we had had these conversations, they knew to call and say, is this something that we should report to our carrier? And although I tell my clients to always call me, I also tell them, hey, 99% of the time, we're going to recommend reporting it. So that was a good example.
Another example, again, real world, is we had a nonprofit who's offering mental health services. They had given a teenager a mental health screening and given her a clean bill of health, green light, saying she's not a harm to herself. Unfortunately, they were incorrect. And this young person, unfortunately had some self-harm, in which case there could be some liability on the part of our nonprofit client who offered that health screening. Ultimately, we reported it, incident only, no lawsuit ensued, but we wanted to put the carrier on notice.
AB: Yeah, those are great real-world examples.
SB: Yep, yep, and I think they're important to highlight to give everyone an idea of things that should at least trigger the question, hey, should I call my broker and should we report this?
AB: Absolutely. So, Sam, if listeners have questions, what's the best way to get in touch with you?
SB: Yeah, I can be reached at (619) 937-0175 or sbrown@ranchomesa.com.
AB: Alright Sam, as always, thanks for joining me in StudioOne™.
SB: Thanks for having me.
AB: This is Alyssa Burley with Rancho Mesa. Thanks for tuning in to our latest episode produced by StudioOne. For more information, visit us at RanchoMesa.com and subscribe to our weekly newsletter.
