I received a great question yesterday from a Business Attorney in Wa. DC
When your insurer denies coverage, or wants to limit payments based on a reservation of rights, to whom do you turn? Your broker? A lawyer? Both?
Scott, great question. As an Insurance Broker, I would expect to receive a call from the Insured at the beginning of any claim. It would be my position to get them to the right department, follow up with that dept. throughout the entire claim process and document each activity through notes and active communication between the Insured and the claim Dept. with follow-up throughout each step of the process. If I feel the client was not satisfied during this process, I would encourage them to get legal council. My notes are a valuable resource for both the Ins. Co. and the Insured. If there was a problem, my notes would be available to document the process. As a broker, we are encouraged to treat our customers with the upmost respect and to help them. That's what we do. If we find there is something illegal or important information regarding any fraud, I have due diligence to the company as well.
In any insurance policy, communication is key with the entire risk and the coverages neccessary for that risk need to be discussed. There are times an insured does not wish to add an important coverage. Notes need to be taken by the agent that the client refused and it's a good Idea to have the
client sign a waiver for the file. For example, a Seafood restaurant that does not want spoilage coverage. The coverage is 100.00 a year. The power goes out and 2,000.00 of seafood is lost. Having the waiver protects me, shows the proper communcation with the client was done and the client is reminded that yes, they remembered discussing it, but didn't remember signing that they declined. This saves the client money from hiring an Atty. If there are more issues, then this would be one less. Now on the other hand, the Seafood restaurant lost 2,000.00 in fish spoilage, the item was excluded from coverage and the Broker never discussed the need or documented such an important coverage for this business, The Broker would have to disclose to the Company that they blew it, and the claim could be paid right there. No guarantee, but you see where this is going.
As an Atty., having a good rapor and open communication with the Broker could be helpful in your Discovery, resolving an issue sooner for someone who is both of our clients. The true test of the importance of having a Personal Agent is helping a client through a problem.
Each policy must be reviewed between the Broker and Client before executed. The exclusions, Liability Coverage and coverage Limits. I encourage the client also include their Lender, Business Partner or Atty. especially when I see they don't quite understand and no one has ever gone over and explained a policy with them before. Often, Clients have coverages and they don't even know they had it or what it is.
With Business Insurance, there may be other entity's with requirements, such as a building owner where the business is transacted. They may have in their contract to be included as additionally named insured on all policy's in their contract. These questions are typically asked at the beginning of the interview with a business to qualify their specific needs. Leaving out an Owner of a Prior contract is a typical reason for a Law-suit. This is often discovered BTT the Owner of the property is sued for something transacted by others.
Liability coverage is always at the top of the list in a Business (Personal too). Liability places a limit on what and how a loss will be covered. I want to be sure the Business of the insured is properly covered, as well as their personal property.
To simplify my answer, yes, Many Business owners I deal with have either Atty's on staff or on retainer to resolve business issues. The Business owners have built a rapor with their Attorney who understands their business and their Attorney is a specialist in their field. The broker should be involved in every claim and assist the Attorney and Client. This will hopefully help in a quicker resolution to the problem.
I've used Real Estate Atty's for letters in Real Estate issues. It saves time and resolves issues quickly. I've also consulted with NAR, they do offer minimum free legal advice to their members. Communication and having a third party Atty., that is an expert in their field, keeps the emotional level down and let's the facts speak for themselves.
I'm an Insurance Broker, not an Atty., and I cannot give legal advice to my clients. As Realtors, getting involved in having Correct Title when Family Trusts are involved, Corporations and any business that can have monetary consequences, having an Atty. review all contracts, including Insurance is an important cost of doing business.
I am interested in your opinions. Does this reply help you as a Realtor, Broker and Business owner?
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