By Brian James
The relationship between an insurance carrier and the insured is fluid and dynamic. When a claim is initially received by the insurer, considerations of good faith and fair dealing require the insurer to make investigation of the claim within a reasonable time. Griggs v. Bertram, 88 N.J. 347, 360 (1982) (citing Fireman’s Fund Ins. Co. 72, NJ 63, 73 (1976)). While this investigation may ultimately be for the benefit of the insured, in that it results in the payment of benefits, a thorough investigation may uncover that the damages sustained by the insured were caused by a risk not anticipated by the policy. New Jersey Courts have explicitly indicated that upon the receipt of a claim or notice of a potential claim, “an insurer is entitled to a reasonable period of time in which to investigate whether the particular incident involves a risk covered by the terms of the policy.” Id. at 357.
The operative term is reasonable. After this reasonable time for an investigation has lapsed, or the carrier has “learned of grounds for questioning coverage”, the insurer has an affirmative duty to “promptly inform its insured of its intention to disclaim coverage or the possibility that coverage will be denied or questioned.” Id. (citing Merchants Indemnity Corp. v. Eggleston 37 NJ 114, 131 (1962).
How Subrogation Affects your Bottom Line
By Robert G. Feldman, Esq. in November's Insurance Professionals of the Main Line E-newsletter
We are living in an economic climate where front-line adjusters are receiving more claims resulting in a higher pending inventory. This is occurring while insurers are facing increased pressure, dwindling investment yields, weak demand, and severe underwriting losses. The reality is that ongoing mergers, acquisitions, and downsizing have dramatically changed the face of the insurance business in America. According to the 2011 Deloitte Report "Driving Operational Excellence in Claims Management" up to 80% of each earned premium dollar is used for payouts and related expenses.
Facing these heightened challenges, it is essential for an insurance company to maximize its subrogation and recovery functions in order to positively impact the bottom line. This will not only make a huge impression on its shareholders and policy holders but will go a long way to distinguish the carrier in the marketplace. This is opportunity within an insurer's claims service function that should not be overlooked.
Corporate Threat Report: Fraud Down, Data Theft Persistent
By Catherine Dunn in Law Technology.com
In a year when many companies adopted a host of new anticorruption measures, global fraud levels also dipped, according to a new executive survey that also shows corporations facing a rising tide of insider threats.
The sixth annual Global Fraud Survey from Kroll Advisory Solutions polled 839 senior executives around the world.
"The most striking result of this year's survey is that there has been notable decline in the level of fraud overall," according to the authors. "The proportion of companies reporting that they were affected by at least one incidence of fraud in the past year had dropped for the second year in a row, from 75 percent to 61 percent."
The drop paid off on the bottom line, too. On average, the cost of fraud to companies fell from 2.1 percent of revenues to 0.9 percent.
Twitter Security Email Gets Mixed Reaction
By Evan Koblentz in Law Technology.com
Computer users everywhere did the right thing on Thursday by not clicking an email link about resetting Twitter passwords, but the email link turned out to be authentic.
The situation unfolded Thursday morning when the microblogging site informed an unspecified number of users that their accounts "may have been compromised by a website or service not associated with Twitter," the email stated. But an internal mistake at Twitter led to the email being sent to many users, not just those whose accounts showed suspicious activity, officials explained in the company's service status blog.
Computer users in the legal profession and elsewhere are frequently reminded by their technology staffs to take the side of caution when receiving messages that involve any account details. That and the frequency of computer security glitches reported by media resulted in many users assuming the message was fake.