“But aren't you Mrs. Detroit? It says right here on my assignment sheet, the M-E-E-M-I-C, the Meemic Insurance Company,” I replied, showing her my assignment sheet.

“That's not the 'Meemic,' you dumb oaf. That is the Michigan Educators & Employers Mutual Insurance Company. I'm a teacher, and that's my insurer. Young man, do you mean to tell me that you're standing on my doorstep telling me you represent my insurance company, and you don't even know the name of it?” Well, as the ads for Mounds and Almond Joy candy bars used to say, “Some days you feel like a nut, and some days you don't!”

One policy, many insureds

I have seen hundreds of errors where adjusters mistakenly did not know who they represented.

This is especially true in commercial policies where not only the named insured but their employees, their additionally insured clients or vendors, their own principals and others may also be represented by the policy, even if they are not shown as a “person insured” in the policy.

In a commercial “wrap-up” construction project, the primary insurer may represent scores of different organizations. (Such policies are often misnamed “owner-controlled policies,” which only partially includes Owners & Contractors Protective Liability coverage.)

Not only may the adjuster for a primary insurer represent many different parties, but that primary adjuster may also be representing co-insurers and excess or umbrella insurers (should the loss exceed the basic policy's limits), as well as any affected reinsurers. The issue of who is insured lies at the heart of thousands of lawsuits against insurance companies or in declaratory relief actions filed by insurers.

Determining who is insured

An adjuster's primary responsibility upon receiving an assignment is to find out who is insured. This is part of the coverage investigation and it is crucial, for unless the adjuster knows whose interests are being represented in the claim, any number of conflicts of interest could arise between those parties.

Take construction site accidents where the employee of one subcontractor negligently injures the employee of another sub-subcontractor, who hires Goe, Phytum & Wynn or some other plaintiff firm and files suit against everybody: The owner, the developer, the general contractor, the suppliers, all the subcontractors and the subcontractor that retained the sub-subcontractor, and the negligent employee in a state that still has joint and several liability.

The adjuster must “go and find out” who is represented by the insurer and who is not. If the insurer assigns defense counsel who files an answer that does not include one of the insured parties, and that insured is found in default for failing to file a timely answer, the case is lost before it begins. Misery may love company, but not in cases where there is failure to represent an insured entity; that is prima facie bad faith.

So, whom do you represent? It is a question that must be answered in every claim. Generally the answer is easy; but it can also be surprising, and it must be disclosed to all concerned parties.

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