The importance of working as a team and communicating effectively during the initial phase of a claim investigation cannot be overstated. As soon as an incident occurs on property, risk managers, claims adjusters, and outside defense counsel all have a job to do. If we communicate with each other and conduct a thorough and detailed claim investigation together, we will better serve our clients and, ultimately, the general public who patronizes them.
Insurance executives and risk managers bat first. It is incumbent upon them to choose adjusters (or train adjusters) who are familiar with the specific industry and are familiar with the client’s operations, policies, and procedures prior to handling a claim. Proper training will ensure that adjusters know the right questions to ask and know to secure all relevant evidence as soon as they are notified of an incident on property. Adjusters should be aware of any indemnification agreements with suppliers or contractors that might require notice or future tender.
After an incident, the adjuster takes over, and, as the saying goes, timing is everything. Immediately following notice of an incident, it is critical that the insured’s employees document the scene, identify witnesses, preserve evidence, and take photographs. The adjuster assigned to the claim and, to a lesser extent, the insured’s risk manager, must take charge of this initial investigation to make sure all of the facts are documented in writing, and that opinions are conveyed orally.
Adjusters and risk managers must insist that incident reports are completed, that the exact location of the incident is identified, and that there are plenty of photographs documenting the scene. This sounds easy, but we have seen scores of claims investigations where a witness is identified with no, or incomplete, contact information; or where defense counsel receives great photographs of, for example, a bathtub, but none taken far enough back to show the presence (or absence) of grab bars. A photograph of a missing tile in the floor does no good if there are no photographs of the entire room to allow us to see where in the room the missing tile was located.
Photographs should be taken of the claimant, his clothes, his shoes, what he was carrying, and who he was with. Photographs must be taken of the entire scene of the alleged injury: the entire bathroom and hotel room; all of the items on a diner’s plate and table; warning signs or the lack thereof; the entire vehicle involved in a crash, inside and out—you never know what these will reveal down the road when the claimant becomes a plaintiff in a lawsuit. Keep in mind, however, that the practice of photographing the claimant should be cleared with your client. Some retail establishments might be more concerned with customer retention than documenting any alleged injuries.
Surveillance video must be secured immediately, if available. Adjusters’ standard practice should include finding and preserving surveillance on property, as well as nearby if the incident happened outside and a neighboring property’s camera could have picked it up. We believe that any information, good or bad, that sheds light on the incident should be preserved, as it will ultimately dictate whether the case is settled or tried.
Securing any and all tangible evidence should also be at the top of the adjuster’s to-do list. If a patron choked on a bone and it is available, the bone should be preserved. The menu, ingredients, and product mixes should be retained in a food-borne-illness or even a foreign-object case. If something fell on a claimant, the object and any pieces should be retained. The lock that severed a guest’s finger should be removed and safely stored. Not only will securing evidence help your clients determine whether a case should be settled, but also failing to do so will likely expose them to costly sanctions for the destruction or “spoliation” of evidence.
In most states, claimants have two years from the date of loss to file suit. Locating servers, restaurant managers, housekeepers, salesclerks, and the like two years after an incident and expecting them to remember details can be challenging. Adjusters must insist that their insureds provide a list of witnesses—where “witness” is broadly defined to include individuals who saw the actual event, individuals who were there immediately before or after the incident, individuals who saw the claimant before or after the incident, individuals who spoke to the claimant before or after the incident, and individuals who repaired or warned of the alleged hazard after the fact. Additionally, adjusters should require the insureds’ staff to secure time-punch information to identify everyone who was working at the time of the incident, including, but not limited to, the supervisors of any employee who may have been responsible for the alleged negligence.
A critical decision faced by adjusters and risk managers at the time a claim arises is whether to retain defense counsel. One advantage to doing so sooner rather than later is that, once defense counsel is retained and guiding the investigation, much of the claim investigation will be cloaked in attorney-client privilege or attorney work product, and, therefore, will not be discoverable by the claimant or his counsel. In serious injury cases, or in cases where a third-party such as a manufacturer or installer might be responsible for indemnification, we recommend that defense counsel be retained early on in the investigation. On the other hand, in cases where the injuries are very minor and indemnification is not an issue, it will be more cost effective to hold off on getting defense counsel involved, especially if it is a clear case of liability and the adjuster has a good chance to get the case settled on her own.
Finally, we encourage each team member to do the little things for other members that benefit the team as a whole. The greatest defense lawyer on the planet will be unable to drive a case toward summary judgment, a good settlement, or a defense verdict if there is little or no investigation done at the time of the incident, particularly when it may be more than two years down the road before defense counsel gets the case. And the world’s greatest adjuster cannot overcome the deficit caused by counsel that is not on top of the case until the pretrial order is due or mediation is ordered.
Just as in football or baseball, one player cannot do it alone. Litigation is a team sport. The case will be settled for limits or under, or be won or lost, by the way the team as a whole performs.