Large loss insurance claims implicate excess and umbrella insurance policy limits, usually starting at one million dollars and above. These claims typically involve multiple parties, complex legal issues, tens of thousands of discovery documents and a multi-year litigation trajectory. There are a variety of types of large loss claims: catastrophic personal injury, wrongful death, trucking accidents, fires, police excessive force claims, abuse scandals, nursing home claims, construction accidents, products liability, insurance fraud, property damage, natural disasters, sexual harassment, employment discrimination and the like.
Because of the high stakes, critical steps must be taken from the outset. The general principles discussed here can be applied to each unique case. What follows is a guide for insurance professionals, claims handlers, and in-house counsel on best practices for defending a large loss claim.
- Interview the insured
Immediately when a notice of claim is received where it is expected that a large loss has occurred, the insurer should contact its insured with an attorney present. The attorney can be outside defense counsel, or, when time is critical or where outside defense counsel cannot be immediately selected (conflicts check, locating counsel in a new jurisdiction), in-house counsel.
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