Insurance coverage

Five tips to improve your application for insurance coverage

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In this episode of “In the Know”, partner Eric Jesse offers advice on improving the likelihood and amount of your business’s insurance recovery if and when a claim arises, starting with understanding a policy’s notice and timing requirements and covered options for retain the services of a lawyer.


Eric Jesse: Hello, I’m Eric Jesse, Lowenstein Sandler’s Insurance Recovery Group Partner, and welcome to “In the Know”.

So when companies even face the potential of an investigation, a claim, a lawsuit, insurance cannot be put on the back burner. Instead, companies should be proactive in really trying to understand how their policies may respond and what policy requirements exist so that they are ready if and when a claim arises.

Today we’re going to discuss five simple but often overlooked steps that can improve the likelihood and amount of a business’s insurance recovery if and when that claim is made.

So first, although it may seem obvious when a problem arises that could turn into a claim, policyholders should proceed with their eyes wide open.

They should understand the extent of coverage that might be available and the defenses that the insurer might attempt to invoke. By doing so, companies can understand their potential exposure and protection. And this exercise is also useful for them to be prepared to carefully characterize anticipated claims in a way that may fall within policy coverage, and to avoid talking about claims in a way that results in exclusions .

Second, depending on applicable state law, late notice of a claim can be fatal to coverage. Companies therefore need to review their policies to re-understand the notice and time requirements in order to be ready to go once a claim is made.

Some policies also identify the corporate officers who must be informed of a claim before the notice obligation begins. And by doing that review, companies can find out if they’re able to take advantage of what’s called a notice of circumstance provision that might be in their policy.

This type of provision allows companies to notify their insurers of potential claims, i.e. circumstances that could give rise to a claim, so that they can lock in that policy for coverage and get it right. applies even if the claim arises years later.

Third, and this is essential: the required notices must be provided to all insurers in the tower, both primary and excess. Although an excess policy may follow the form of the primary policy, meaning that the access policy incorporates the terms and conditions of the primary policy, excess carriers will expect to receive their own notices. Failure to provide notice to an excess carrier will result in them trying to assert a late notice defense, which, as an underwriter, you will want to avoid.

Fourth, companies need to understand who their advocate can be. Often companies are surprised when they hire a law firm to defend a claim, only to find that their policy requires hiring a defense attorney from a panel of pre-approved companies. Or they are surprised that the insurer is only paying rates lower than those charged by the policyholder’s preferred attorney. So advice and preferred rates are something that companies can try to negotiate with their insurers when underwriting the policy. It’s important to have these discussions upfront, because hiring a lawyer and incurring significant legal costs without insurer approval can result in higher out-of-pocket costs for the policyholder. police.

And finally, at the end of the day, good communication with insurers is key. Whether it is correctly drafting a notice of circumstance or a notice of complaint; if it concerns communication when the insurer when the consent of the insurer is required; whether communicating defense attorney selection, pricing or litigation guidelines, or simply providing updates on the claim, communication with the insurer is essential to avoid many headaches later if and when insurance money – whether for defense or a settlement – ​​is demanded.

So thank you for joining us, and we look forward to seeing you next time on “Aware.”