By Leigh Ann Hubbard
Your nightmare has come true.
Last week, a resident stumbled and sustained some bruises. You’ve just been notified that your community is being sued.
Your insurance broker has educated you well, so you know what to do—and it’s not to call a lawyer. Instead, you call your claims representative. They’ll walk you through the next steps.
Most people get that part right. But here’s where things can go wrong: If this is the first time you’ve called your broker about the incident, you could lose thousands of dollars in coverage. Here’s what to do instead.
What to Do Before You Get Sued
As soon as an incident happens that you believe will probably develop into a claim, report it to your broker.
“Sometimes, people don’t report a claim because they think, ‘If nothing happens it’s going to ruin my claims record or increase my premium,’” says Renee Guthart, chief operating officer of property casualty at Hamilton Insurance Agency (a Senior Living Foresight partner). But if a lawsuit is filed on an incident that you were aware of but didn’t report, your coverage may be voided.
With “claims-made” insurance policies, coverage is triggered when a report is filed, not when the incident happens, Renee explains. Besides, making a report right away can better set you up for success if a lawsuit occurs. That’s because your broker and claims representative will guide you through preserving evidence and documenting the incident (before witnesses’ memories lapse).
Reporting more incidents won’t necessarily raise your premiums. In fact, it may speak well for you.
“If we do see a lot of incidents being reported, when we’re analyzing claims history, we let the carriers know that they have a protocol to report all incidents because they are much more proactive,” Renee says. “This shows a very good involvement from management, which carriers do like.”
When the Lawsuit Comes
Claim rates vary widely, but in their annual benchmarks assessment, Aon Global Risk Consulting projected that in 2020, long-term care providers would have an average of about one claim per 100 beds. (Of course, they didn’t know about COVID-19 when they made that prediction in November 2019.) If you do get sued, one thing your broker should be able to do is help you get the right lawyer.
“We know the good attorneys,” says Keith Parnell, vice president of Hamilton Insurance Company. Insurance carriers often hire attorneys who’ve been preapproved in part because of their rates, he says. “We advocate for our clients to be able to use the better attorneys, who we know have won cases against the really prolific plaintiff attorneys.
“When a client buys insurance, they hope to never use it,” Keith says. When a lawsuit does happen, though, he points out that it’s important for the broker to partner with the client. “We make sure the whole process goes smoothly and that they’re able to utilize the policy they paid for.”
To find a broker who will help you get the best insurance, and advocate for you when you need to use it, download this free guide from Hamilton Insurance Agency, “How to Pick the Right Broker: 5 Must-Ask Questions.”
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