Frequently, claims managers, supervisors, adjusters or attorneys picked up a new claims file and question why a claimant acted in a certain manner. When working a claim, it is generally taken at face value. The facts are as they are in the file, unless some surprises turn up later.
When investigations proceed, things may be found to differ from their initial appearance, or new material may surface. When accident and loss reports are initially made, the forms may be incomplete with respect to details, but that is not uncommon.
Whether a particular claim appears to be legitimate is answered based upon the facts. Too often, one may see the fraudulent set up of a faked accident, auto or otherwise, and usually if something is too obvious, it is handled early on in the process. Many times there may be questions surrounding an occurrence, but not an obvious fraud. Further investigation may identify questionable issues, however, there is an assumption that a claim presented is indeed legitimate.
From the perspective of handling claims, considering what might occur to cause problems for the insured should be a priority, though often it is not. Once a policy is secured by the insured, it may be filed away and little thought given to the actual coverage involved. How frequently do most insureds really read and examine a policy? Only when a problem arises is the carrier consulted. Perhaps the fault is not entirely the insured's and the industry needs to do more about emphasizing the value of thinking ahead in an effort to prevent problems.
Large businesses may have the ability to do this in-house, but few think about it. The easy answer is to let the insurance company worry about any claims. However, that thinking may change at renewal time.
While it is probably fair to say that most businesses attempt to prevent accidents and other potential causes of loss and liability, the degree of effort involved varies. The legal duty of a business open to the public is to use reasonable care to maintain the business premises in a safe condition. But to what extent are steps taken to insure this? Is the need emphasized to employees? Does management follow up? Some forethought may become extremely valuable in the event a future claim is made based upon a failure of such duty. While it is not possible to prevent all adverse incidents from occurring, being able to show prior reasonable care can greatly impact liability.
A while back, this author happened to be looking through the men's clothing section of a large discount retailer when he noticed an empty hanger lying on the floor, partly under the display rack. After picking it up and placing the hanger back on the rack, he wondered how long that hanger might have been on the floor. Had an employee noticed it and simply failed to pick it up? How much did management press upon employees on the sales floor to actively look for things similar to this and take corrective action?
Pressing the need to take affirmative steps to correct potential hazards should be frequently emphasized to the store associates, and the liability to the store for not doing so. While retailers often have periodic sweep schedules, employees should also be encouraged to keep their eyes open for hazards. Keeping the business open and minimizing its liability affects all concerned. While it is easy to state that a periodic sweep schedule is policy, it is much better to have the records confirming it. Should a matter go to trial, the judge or jury decides liability based on the evidence presented. Carefully kept records of sweep schedules may be extremely valuable.
The author was also involved in the defense of a liability claim against a major retailer. The claim resulted from a customer slipping and falling, sustaining claimed injury, on the store premises. What allegedly caused that slip and fall? A clothing hanger lying on the sales floor.
While a business cannot simply post an individual to constantly watch an area to the exclusion of all else, it can certainly highlight the importance of paying attention to problems. Major emphasis on inspection while involved in other duties is always good; look for possible problems while pursuing one's regular duties. If a problem appears, correct it or call for assistance to do so. Losses for the employer affect the employees, as they increase operating costs such as insurance premiums and if taken too far, may cause a shut down.
Suppose that a problem has been discovered, but no appreciable action was taken to rectify it? Consider guests staying in a hotel with valuable property in their room. The lock on the sliding glass door is found to be broken and is reported, but no immediate action is taken by the hotel to repair the problem. Subsequently, when the guests leave to go out, the room is entered by a thief thru the unlocked glass sliding door and property is stolen. The guests then make a claim against the hotel for the value of the property.
Most likely the hotel should have taken action upon being notified of the problem. In such a scenario there are multiple ways the door may have been secured. Many hardware stores have simple devices available to attach to tracks to prevent the door from opening until the lock could be repaired. Even a suitable length of wood or a pipe in the track could prevent the door from sliding open.
In a situation like this there are a few other considerations. For example, many states have statutes attempting to limit a hotel's liability for loss or theft of property from rooms and require notice if safes are available. This can definitely affect outcome. But, suppose it was not loss of property, but rather an intruder who caused personal injury to the occupants. Potentially a very serious matter, especially if little action was taken or the guests were not relocated to another room. Liability could be great.
Preventing any and all problems is simply not possible, but adjusters and risk managers can encourage clients to think and act in advance. Creating a proactive mindset may help to reduce liability, if not eliminate it.
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