BROKER RISK MANAGEMENT
BROKER ALERT
Unfortunately, several clients of Broker Risk Management (“BRM”) have recently experienced challenges with their insurance companies. The following are a number of examples:
- Claims being denied even where there is coverage. Some insurance companies will choose to deny coverage when there is an opportunity, having a strategy that most insureds will not retain counsel to challenge that decision. Reputable insurance companies do not have this practice.
- Failing to give appropriate attention to a claim. Unfortunately, some insurance companies retain unqualified or inattentive claims representatives who do not give appropriate attention to a claim. Sometimes, claims are ignored or recommendations of defense counsel not considered. Generally, these claims snowball into much more significant issues if appropriate attention is not addressed early.
- Appointment of unqualified panel counsel. Some insurance companies will retain law firms who utilize young, inexperienced or unqualified counsel, because the hourly rates are low. Many times, these attorneys are incompetent, leading to unequitable results for the insureds. Some insurance companies will retain panel counsel, who receive all of their business from the insurance company and therefore, the attorneys are beholden to the insurance companies. These attorneys forget that the client is the real estate brokerage, not the insurance companies. In many instances, these attorneys will report to the insurance company but neglect to provide status reports or include the brokers in evaluating decisions regarding the handling of the claim or litigation.
- Insurance companies failing to pay defense counsel. Many insurance companies implement systems whereby they retain third-party vendors to review defense counsel’s bill. The entire purpose of these reviews is to save the insurance company money. Hence, the insurance company retains these third-party investors to find every means of reducing attorney’s fees. Some insurance companies expect the law firms to pay for these services, which is generally a percentage deducted from the invoices.
Many times, insureds will “get what they paid for.” When it comes to insurance, insurance is only as good as its handling on the day a claim comes in.
BRM clients are encouraged to evaluate their insurance and ensure that they are working with a reputable insurance company who will support the brokers in their time of need.
If you need assistance in reviewing your insurance or coverage, we are happy to provide it.
ATTORNEY-CLIENT PRIVILEGED COMMUNICATION. DO NOT FORWARD THIS DOCUMENT TO CLIENTS. This Broker Alert is attorney-client privileged and for the exclusive use of clients of Broker Risk Management and their agents. It may not be reproduced or distributed without the express written consent of Broker Risk Management. The advice and recommendations contained herein are not necessarily indicative of standards of care in the industry, but rather are intended to suggest good risk management practices.