I represent policyholders in coverage disputes with their insurers. I have been doing this for more than 30 years. I have handled asbestos, environmental, property loss, directors and officers, errors and omissions, and, most recently, cyber claims.
Executive SummaryWhen a claim is submitted for coverage, the policyholder expects all of the information it provided to the underwriter at the time of placement will be considered, analyzed and given weight by the claims department. But that rarely happens, according to Matthew Jacobs of Jenner & Block. The policyholder lawyer describes the disconnect between underwriting and claims in the first article of a two-part series. In Part 2, Jacobs addresses the arguments that insurers present for allowing the situation to continue.
My experience in handling contested claims has demonstrated a disturbing trend among insurance companies. Claims professionals facing a multimillion-dollar claim on property/casualty policies rarely communicate with the policy underwriter after a third-party claim is submitted for coverage. No attempt is made by the insurance company claims handler to find out exactly what the underwriter represented to the policyholder at the time of placement, and very little is done to assure that the policyholder is, indeed, getting the coverage it bargained for—coverage that was promised by the underwriter at the time of placement. This strikes me as an odd way to do business.
When underwriters are introduced to potential insurance buyers by a broker, the underwriters meet with a new client, they discuss the client’s risk profile, the client’s needs, the client’s appetite for risk transfer (limits and the size of deductibles/retentions) and the scope of coverage being afforded by the policy form being considered by the policyholder.