Claims Manqagement (1)

8/4/2019 Claims Manqagement (1)

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Claim Management

Prof: V.K.Agarwal

Visiting Faculty


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Insurance

Inland Marine

Work

CompOther Liability

Bonds

Property& Liability

AUTO

Coverages


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Claims History Review Ins Program

Autos (fleet of 9, incl. trailer)(experience - discounted)

Package (liability is sales based - auditable) - CPP

W/Comp (payroll-based - auditable) Loss history

3/02 - $127 other vehicle turned in front of auto driven byowner/officer

5/01 - $7290 unsafe lane change auto loss owner/officerdriving

8/99 - $9706 lost control of auto, flipped

9/03 - $1399 theft from auto parked at business 2/03 - $6038 theft of computer, copier, laptop, from business

premises 7/98 - $688wind/hail damage to canopy at parade of homes 12/97 - $4013 cut finger while using utensil to trim tile,

during installation

9/96 - $1919

employee drove vehicle into building, damageddesk, bookcase, side of bldg, computer


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Multi-line Commercial policiesproperty loss exposures

possibilitythat a person or an organizationwill sustain a financial loss as a result ofdamage to, destruction of, theft of, or loss ofuse of property

liability loss exposures

possibilitythat a person or an organizationwill sustain a financial loss as the result of aclaim from someone seeking monetary

damages


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Commercial insurance Commercial property Business income Crime insurance Equipment Breakdown Inland & ocean marine

Businessowners ~ BOP

Commercial Package policy ~ CPP

Farm insurance

Commercial auto

CGL insurance

Workers compensation

& employers liability

Professional

Directors & Officers/EPLI

Fiduciary liability (EBL)

Umbrella


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Commercial insurance/bonds

Aircraft

Environmental Impairment Liquor Liability Surety Bonds License & Permit Bonds


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Section I

Analysis of property insurance

What

WhereHow

How

Much


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Section 2

Analysis of liability insurance

Insured

BI, PD, PI, AIExclusions

Conditions

defense

judgment


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Eligibility Commercial Package (CPP)

Business Owners (BOP)

Other: builders risk


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Policy structureCommon policy

declarations

Common policyconditions

Coverage partsIf only one part, its consideredmonoline rather than packaged


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Commercial Property

Declarations

property description

kinds & amounts ofproperty covered

covered causes ofloss

mortgagee(s) (ifany)

deductible amount

list of forms &

endorsements

coinsurance %

any optionalcoverages


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Commercial Insurance

Conditions concealment, fraud,

misrepresentation

control of property insurance under 2 or more

coverage parts

legal action against insurer

liberalization

severability

cross-suits

no benefit to bailee

other insurance

policy period,coverage territory

transfer of rights ofrecovery(subrogation)


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Loss Conditions

(Valuation/settlement basis)

abandonment

appraisal duties in event of loss or damage

loss payment

recovered property

vacancy

valuation


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Commercial Property Buildings, auxiliary structures

Insureds business personal property

Others personal property in insureds custody

Property Not Covered

Property Subject to Limitations

Additional Coverages

Extensions of coverage

Deductibles Loss Settlement Provisions

Optional Coverages, endorsements


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Definition ofBuilding

structures listedon Dec page

completedadditions tocovered buildings

fixtures (including

outdoor)

permanentlyinstalledmachinery &equipment

insureds personalproperty used to

maintain business &premises

additions, alterations,& repairs (including

materials within 100)


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Property NOT Covered byB

PP accounts, bills,

records.

most animals

autos for sale

contraband

excavations

land

air/water-borneproperty

bridges, roadways,bulkheads, piers, retainingwalls, foundations

property covered elsewhere

underground pipes

valuable papers

vehicles/aircraft/watercraft

outside grain, hay, straw,fences, antennas, trees


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Additional Coverages

Property off premises

Property in Transit

Property of Others

Personal Effects

Debris removal

Preservation of property

Fire department service charge Pollutant cleanup & removal

Increased cost of construction


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Coverage Extensions Available

BPP

Newly acquired buildings or personalproperty

Valuable papers & records

Accounts receivable

Exterior Signs

Trees, Shrubs, Plants and Lawns TenantGlass


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I

nsurer

sL

oss Payment Options

Pay the amount of

damage or loss Pay to repair or

replace damaged

property

Take property &

pay agreed or

appraised value

Repair, rebuild orreplace with propertyof like kind and quality

Remember: must havefinancial loss

andinsurable interest


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BPPAdditional Conditions

Mortgage Holder Vacancy Coinsurance or agreed value


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Optional Coverages

BPP agreed value option

inflation guard

replacement cost

extension of replacement cost toproperty of others


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Functional Valuation

Endorsements:B

PP

Functional replacement cost = cost to replacedamaged property with similar property that

will perform the same function

Functional building valuation Functional personal property valuation

(other than stock)


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Two Major Approaches

to Insuring Property

SPECIFIC INSURANCE

States separate amount for each building andfor personal property at each location

BLANKET INSURANCE

Covers with one limit:

2 or more types of property

1 or more types of property

at more than 1 location


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Commercial Liability How can liability be imposed?

Contract

Common law negligence

Statute


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Who can expose the business to loss? Owner/spouse in conduct of business

Employees, including operation of

mobile equipment Real Estate/property managers

Legal Representatives

Newly acquired/formed organizations

Independent contractors Those to whom property is entrusted


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Structure of Coverage Liability coverage

Premises/operations

Products/completed operations

Acts of Independent Contractors

Supplementary Payments

Medical Payments

Damage to Rented Premises


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Structural coverage issues Who is an insured

What is covered

Where its coverage How much: Limits of insurance

Exclusions

Definitions Conditions

Endorsements


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Who is an insured Named insured (by definition)

Automatic insureds

Additional insureds


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What is covered Legal liability (damages) Defense expense (sometimes in

damages, sometimes outside) BI, PD, PI, AI as defined (may exclude

last two based on class of risk,underwriting)

Direct and indirect liability exposures

which are not excluded or better coveredelsewhere Not professional (few exceptions)


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Where & when its covered

Territory

Policy period

Occurrence, suit

Retroactive, extended reportingperiods: claims made forms


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Exclusions Intentional acts (reasonable force,

perpetrator excluded)

Contractual Liability (exceptions) Liquor

War

Employment/workers compensation


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Exclusions continued Pollution

Recall (sistership) expense

Auto/watercraft/aircraft (exceptions) Damage to your own property or property

in your care (business risk)

Damage to what youre adding value to

or working on (be careful, workshopexcluded)


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Exclusions continued Known loss (montrose decision, akaloss in progress)

Mold, contamination, fungus (incl.testing, remediation)

Professional (some exceptions)

PI/AI exclusions (intentional,criminal)

Lead-based paint


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Exclusions added by class Products/completed operations

Advertising injury/Personal Injury

Testing / consulting Other locations/operations

(depending on nature)

Special med pay exclusions


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Limits of insurance Occurrence

General Aggregate

Products / completed operationsaggregate

Med Pay sublimit per person

Supplementary payments(enumerated)


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Definitions BI, PD, PI, AI Suit, claim Hazards (to bring meaning to coverage

description and boundaries toexclusions)

Transfer of rights of recovery Other insurance

Insured Contract (to clarify exclusionfor contractual or assumed liability)

Territory Pollution


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Risk Management

Identifying loss exposures

Analyzing loss exposures

Evaluating techniques

Selecting best technique(s)

Implementing technique(s)

Monitoring program & making neededcorrections & adjustments


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Risk Management

Analyze

Options

Select

Monitor

Identify


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Property/L

iability Owner? Landlord?

Tenant?

Construction?

Lease income?

Rental Expense?

Other parties?


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Auto Risks?

Driver selection?

Accident analysis?

Excess/primary?

Permissive user?

Delivery/installation?


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WorkersCompensation

Statutory

Employer/employee

Subcontractors

Employers Liability

Safety Programs

Volunteers


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Inland Marine Computers/data

Values to be delivered & installed


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OtherL

iability Employment Practices

Directors & Officers

Owners & ContractorsProtective

Umbrella/Excess


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Bonds


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What

s in each bucket? Property & Liability

Auto

Workers Comp

Inland Marine

Bonds

OtherL

iability


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Documents

Claims Manqagement (1)