Liability Claim handling can be complex for several reasons. In liability claims, the claimant is a third party who has been injured (bodily injury) or whose property has been damaged by the insured. While it is not always easy to determine the amount of loss in the property damage liability claims, the problem becomes even more complex when the loss involves bodily injury or death.
The following points concentrates on the issue of legal responsibility, which lies at the heart of the liability claim handling process: -
Step 1: Investigation
After receiving the first report of injury or damage, the claim representative must gather more detailed information relating to the liability claim. The amount of loss will be relevant only if the loss is covered under the insured’s policy, if the insured is legally responsible for the loss. The claim representative’s initial emphasis must be on determining how much and why the loss have occurred and whether it appears that the insured is responsible.
· Determining how the loss has occurred and assessing the situation
· Verifying Coverage
Step 2: Valuation
When bodily injury is involved, determining the amount of damage often depends on the medical reports and the opinions of the attending physicians. Properly evaluating this medical report is critical in determining the amount of damages and is a distinguished factor in settlement of claims. The evaluation aspect of bodily injury claims requires experience and skill.
Damage refer to a monetary award that one party is required to pay to another who has suffered loss or injury for which first party is legally liable.
Legal liability might involve following type of damages: -
· Compensatory Damage
· Punitive Damage
Compensatory Damage includes both special and general damages that are intended to compensate a victim for harm actually suffered.
Special Damages Specific, out of pocket expenses are known as special damages. In case of bodily injury claims these damages usually include hospital expenses, Doctor and miscellaneous medical expenses, ambulance charges, prescriptions and loss to wages for the time spent away from the job during recovery.
General Damages are compensatory damages awarded for losses such pain and suffering, that do not have a specific economic value.
Punitive Damages are damages awarded by a court to punish wrong doers who, through malicious or outrageous actions, cause injury damage to others.
Step 3 Negotiation and Settlement
While the award for damages might result from court decisions, a very large percentage of liability cases are settled out of court through negotiations between the claim representative and the claimant or the claimant’s attorney. If negotiations do not bring about a settlement, the claimant has option of suing for the alleged damages. The court then decides who is responsible and determines the value of the injury or damage.
CHAPTER: 6 CLAIMS
