This article was written with the assistance of AI and edited by Angela Sabarese.
In a recent CLM webinar, titled, “Avoiding the Top Ten Mistakes Claims Professionals Make,” a panel of insurance industry experts shared insights on common errors in claims handling. The panel featured Rick Roberts from Nuzzo & Roberts, L.L.C.; Brian Rubin, Thomas Rubin & Kelley PC; Sam Elam, Cardinal Captive Strategies; and Cheri Barton, Cumberland Insurance Group.
Common Mistakes
The discussion covered critical areas where claims professionals frequently stumble, emphasizing that timing, communication, and state-specific knowledge are essential for effective claims management. The panelists addressed ten major mistake categories, ranging from technical legal issues to strategic decision-making errors.
Understanding State-Specific Laws
A central theme throughout the presentation was the importance of understanding state-specific laws. "If there's one takeaway, your collateral source issues can affect value," Roberts emphasized, noting that these rules vary significantly between jurisdictions and can dramatically impact settlement negotiations. The panel stressed that claims handlers must work closely with local counsel to navigate these complexities.
The Importance of Communication
Communication between claims professionals and defense attorneys emerged as another crucial factor. Roberts highlighted a common but costly oversight: "It's a cheap phone call, but if there's one thing that you should be paying us to do is to let you know what's going on if you're going to settle a case." He shared examples where cases were settled just as favorable legal developments occurred, resulting in unnecessary payments.
Closing Files Too Quickly
The panelists also challenged the "close files quickly" mentality prevalent in the industry. Rubin observed, "The best file is a closed file. I also don't know an insurer that doesn't have concerns about claim and litigation expense. However, often...you end up paying twice the amount—or even more, potentially—in indemnity, and is that really worth it to just close a file?"
The presentation underscored that effective claim handling requires balancing efficiency with thoroughness, strategic thinking about when to fight versus settle, and maintaining strong communication channels between all stakeholders in the claims process.