To borrow a quote from Tom Hanks in the movie Forrest Gump, handling general liability claims is “like a box of chocolates”. You never know what you are going to get. Those working in general liability insurance are faced with a myriad of issues, and must be able to address them in an organized, timely and calculated method. To successfully handle these issues, the general insurance liability claims adjuster must develop each claim systematically, so that nothing is overlooked during the course of an investigation.

Pinpointing The Issues : The first thing to be done by the claims adjuster is to obtain an understanding of the issues involved. The insured themselves may have no clear idea as to why they have been placed on notice, or the allegations being made against them. The insured may not be aware of the claim being advanced against them. It therefore becomes the responsibility of the adjuster to develop a clear understanding of each party’s stance. Securing the allegations and theory of liability is the initial part of the investigation.

Assess The Coverage : Once the adjuster has an understanding of the issues involved, the next step is to identify and address any possible coverage issues. Oftentimes, the initial coverage analysis is based on less than comprehensive information. For this reason, a timely and well written reservations of rights letter should be issued citing the potential coverage issues, which must be perfected through further investigation. Coverage is a particularly sensitive issue and should not be taken lightly by the adjuster. Discussions with management should be an ongoing process to ensure that the correct coverage position is taken.

Establish The Insured’s Role / Status : It is essential that the adjuster develops a clear understanding of the role or status that the insured has in a general liability claim. Does our insured own or lease the property? Is the insured a real estate management company? Is our insured the snow removal contractor? Is our insured the General Contractor, or are they a subcontractor? etc.

Learn About The Insured’s Work : The claims adjuster needs to learn about the type of work or service the insured performs, and how this contributed to the alleged injury or damage. An expert will not only provide vital testimony, but will also assist the adjuster in developing an understanding of the technical issues involved with the claim.

Secure And Analyze Relevant Documents : Although an insured may have no tort liability, an insured may have entered into a contract or lease agreement which could expose them to some kind of liability. The contract or agreement contains vital information needed to complete a contractual liability analysis. For this reason, an adjuster needs to recognize when there is a potential risk transfer exposure, and to secure copies of any applicable contracts or lease agreements. Once secured, these contracts or lease agreements need to be thoroughly reviewed by the adjuster.

Secure Field Investigation : The scene of an accident may change. Defects in a sidewalk may be repaired before the claim is even reported. For this reason, it is essential that the adjuster develop a close rapport with their field investigator. It is the responsibility of the field investigator to communicate information essential to the disposition of the investigation.

The author, Joseph Badowski, is a liability insurance expert who has worked in the industry for more than 20 years. He currently works at Harleysville Insurance, and can be contacted at jkmbadowski@yahoo.com