The Wind Blew, The Earth Shook, The River Rose And My Claim Is Still Not Paid Lance J. Ewing, EVP Global Risk Management, Cotton Holdings, Inc. Shoba Rajanahally, President, Inland Risk & Insurance Management Services LLC W W W . C H I C A G O L A N D R I S K F O R U M . O R G
The Views and/or Opinions expressed in this Session are those of the individual presenters and do not reflect the Views and/or Opinions of their respective companies, offices or entities . 2
Audience Interaction • How many have had a property claim that took longer than 2 years to settle? • How many have a large property claim that is open right now? • How many have ever brought litigation against the carrier in a large property claim? • How many have ever brought litigation against the broker in a large property claim? 3
Starting Points BEFORE Your Major Property Claim Find Your Policies Read Your Policies Have Someone Else Read Your Policies Have Appraisals Done CAT Model Estimate Your BI and Extra Expense at Threshold Levels (25/50/75/100) Have Your Adjuster Already Named Have Your Remediation Company Already Named Have Your Forensic Accountant Already Named Have Your Policy Counsel Already Named Have your Company “Response Team” Already Named and Resourced 4
Who is Invited to the Claim Party? • Company or Entity • Adjuster • Forensic Accountant • Coverage Counsel • Experts • Brokers and Agents • Carrier et al. (claims adjuster, in house/outside attorneys, engineers, accountants, etc.) • Multiple Carriers et al. • More? 5
Why Does It Take Soooo Long? • Carrier has a Statute to Respond (They can use ALL of it) • Reservation of Rights (ROR) • Insurance Carrier Officialdom • Case OVER Load for Adjusters, esp. in CAT Loss • The Right Claims Adjuster for a Complex Claim • The Underwriter and Claims Ballet • Not Having All the Information (Yours and Theirs) • Waiting on Experts (Theirs and Yours) • If International Claim … Home Cooking Takes Time • Primary v. Excess • Kicking Your Claim Upstairs • Not Wanting to Tell You NO 6
What Is A Risk Manager Do? • Check and Recheck The Information You Sent to The Carrier and Adjuster. Is it Complete? • Review The Photos and Videos Taken at The Time of The Loss and After The Loss • Consult With Your Experts • Consult With Your Broker • Consult With Your Coverage Counsel • Check the Restoration Company Invoices • Consult With Your CFO, CEO or GC • Ask For Timelines and Action Plans From The Carriers • Find a Point of Agreement • Set Up Weekly Status Calls • Ask for an Advance or Several Advances • Pick Off Low Hanging Fruit (Settle Around) 7
Audience Interaction • Carriers in the Room … Any Thoughts? • Brokers … Any Thoughts? • Risk Managers … Any Thoughts? • Attorneys … We Know You have Thoughts! 8
Negotiate, Mediate, Arbitrate, Litigate (In That Order) Work With Me People! • Use Leverage in Negotiations (past, present, future) • Use Your Broker • Use Your Boss and Higher • Get to the Right Person(s) at the Carrier Level • Lunch • What Does the Policy(ies) Say About Mediation/Arbitration? • Carrier “Pack” Mentality • Court May Send it to Mediation/Arbitration • ADR or JAMS • Please Leave Your Ego at The Door 9
You Might Have to Take a Harder Approach
Litigation This is NOT the Fun Part • Is It a Mountain You Want to Die On? • Are You Sure? Is it Your Decision? • Lawyer UP. Is it Your Decision to Choose Counsel? • Breaking Up is Hard to Do. Call Carrier (With Your Lawyer) • Tell Your Broker(s) • Looming Renewals • Set Timelines and Status Plans With Your Attorney • Gather Your Defenses • $$ Court Costs, Discovery, Experts, Travel, Filings, Fees • You and Your Officers May Be Deposed • May Take Years … So While Waiting, Do Your Job • Settlement Offers … No Place for Emotions • As in a Relationship … You Heal And Move On Over 90% of all lawsuits end up settling before trial 11
Napa Earthquake – August 2014 12
Real Life Case Katrina & Rita Mississippi Claim $1.1B (27 Carriers) New Orleans Claim $225M (12 Carriers) Lake Charles Claim $140M (10 Carriers) 14
Expect the Unexpected
THANK YOU Lance J. Ewing: lance.ewing@cottonteam.com Shoba Rajanahally: shoba@inlandgroup.com
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