{"id":888369,"date":"2016-04-26T15:27:37","date_gmt":"2016-04-26T21:27:37","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=888369"},"modified":"2016-04-26T15:27:37","modified_gmt":"2016-04-26T21:27:37","slug":"try-to-settle-before-suing-for-insurance-coverage","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/try-to-settle-before-suing-for-insurance-coverage\/","title":{"rendered":"Try to Settle before Suing for Insurance Coverage"},"content":{"rendered":"

Gloria Gonzalez | Business Insurance | 4.15.2016<\/p>\n

Risk managers have to carefully weigh their options when considering whether to sue insurers over a denial of coverage, as such lawsuits can be costly and result in an even bigger loss for their companies.<\/p>\n

\u201cAs a risk manager, I have to understand that the best risk management strategy is avoidance,\u201d said Ashraf Kilada, senior director of treasury risk management at PepsiCo Inc. in New York. \u201cThe best way to handle a dispute<\/a> is not to have it in the first place.\u201d<\/p>\n

However, if a denial of coverage of a major claim occurs despite the risk manager’s best efforts, \u201cthe most important thing is to take a deep breath, not get emotional \u2026 and try to understand the reasons for the denial,\u201d he told attendees during the Risk & Insurance Management Society Inc.’s annual conference on Monday. \u201cIs it justified based on the language in the policy?\u201d<\/p>\n

A face-to-face meeting with the insurer’s claims counsel is preferable to an exchange of letters about the denial, Mr. Kilada said.<\/p>\n

\u201cWhen you talk to them, you really need to understand what their point is because maybe they didn’t fully understand your case,\u201d he said.<\/p>\n

In addition, other factors could be at play, such as an \u201coverly aggressive\u201d claims staffer or counsel who wants to set case law, and further discussions could overturn that initial denial, Mr. Kilada said.<\/p>\n

The litigation pathway has several pros, including increasing pressure on insurers, which can result in a higher dollar settlement, and securing a more favorable forum to handle the dispute<\/a> if the company sues before its insurers do, said David Klein, a Washington-based partner at Pillsbury Winthrop Shaw Pittman L.L.P.<\/p>\n

However, suing also has several cons, including the litigation expense, the possibility of not recovering anything from the insurer if the case is lost and the difficulty of settling once a lawsuit has been filed, he said.<\/p>\n

\u201cYou want to be very thoughtful, particularly about pursuing bad-faith\u201d litigation, Mr. Klein said. \u201cThe truth of the matter is 99% of the coverage lawsuits<\/a> above a certain dollar amount do end up in settlement because no one wants to be responsible for losing that $100 million case on either side. But when you accuse someone of bad faith, you make them your enemy, at least for a while, and you make the hurdles to settlement more difficult.\u201d<\/p>\n

In one example, a directors and officers insurer could deny a claim to cover legal costs associated with a policyholder’s receipt of a subpoena from a U.S. attorney, Mr. Kilada said.<\/p>\n

Deciding what to do in such situations requires a careful balancing of factors, including…<\/p>\n

To finish reading this article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Gloria Gonzalez | Business Insurance | 4.15.2016 Risk managers have to carefully weigh their options when considering whether to sue insurers over a denial of coverage, as such lawsuits can be costly and result in an even bigger loss for their companies. \u201cAs a risk manager, I have to understand that the best risk management… Continue reading Try to Settle before Suing for Insurance Coverage<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[3],"tags":[23],"class_list":["post-888369","post","type-post","status-publish","format-standard","hentry","category-insurance-claims","tag-insurance-coverage","entry"],"jetpack_publicize_connections":[],"yoast_head":"\nTry to Settle before Suing for Insurance Coverage - 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