SDI Claims - Leading to a Better Way

January 03, 2022 0 Comments

Often, when people hear the words "insurance claims," they are associated with negative connotations. These include the anticipation of lengthy resolutions, undesired tasks, and conflict. However, to the contrary, claims can bring people together when all parties collaborate effectively. In a recent sit down with Derek Fennell, Assistant Vice President of Subcontractor Default Insurance Claims at AXA XL, we gain insight around four steps that help lead Carriers and Insureds to a better way of handling claims:

1.      Communicate Early

2.      Create an Atmosphere of Trust

3.      Educate the Insured

4.      Rip Off the Band-Aid

Communicate Early

    The first step to creating a better claims atmosphere is to communicate early. According to Derek, "In the marketplace, there seemed to be a pattern where Insureds would put the Carrier on notice of a claim and then a period of months or even years would go by – there would be intermittent discussions, but nothing." Poor communication can lead to conflict as the Carrier may have questions about conducting Proof of Loss. The more the Insured talks to the Carrier, the more the Carrier can communicate about documentation requirements as the Proof of Loss is being prepared for submittal. When the Insured can provide approved documentation, the chances of getting a suitable yield to satisfy the overages increase significantly. The claims process can be contentious, but early and effective communication can be a clear, successful step towards claim resolution.

Create an Atmosphere of Trust

    As a foundation to communicating effectively, the Insured and Carrier must establish a relationship built on trust. Both parties will find better results and expedited claims when the Carrier fosters an atmosphere of trust, allowing the Insured to feel comfortable while informing the Carrier with project/claim details.  In our interview with Derek Fennell, he states that "It is really difficult when everyone retreats to their corners and it's really hard to resolve issues when you have an Insured that doesn't have trust in the Carrier." Usually, in the context of construction claims, the relationship between Insured and Carrier is adversarial; however, it does not need to be as everyone is trying to obtain the same fair and equitable results.

Educate the Insured

    Once trust is established, and both parties communicate openly and effectively, the Carrier should seek opportunities to educate the Insured to allow for enhanced risk management. Derek suggests that the Carrier should "take the analytics developed during claims and give the feedback to the Insured in ways that make the Risk Managers understand risk more." By sharing their vast claims experience and educating the Insured on risk management trends, the Carrier can assist Risk Managers in creating strategies that help prevent future claims from happening. Though Risk Managers cannot see every catastrophic issue that may arise on a construction site, the valuable insight they gain while working with their Carriers can better prepare them for future claims.

Rip the Band-Aid Off

    The fourth step identified by Derek, which helps lead to a better way for insurance claims, is "ripping the band-aid off." Derek Fennell describes this as giving "the message very early so the project team is prepared and the risk management team is prepared, which will often lead to a better result." By informing the Carrier of any significant project nuances early on, all parties involved have more time to process and prepare for the claim. Through this process, any major factor such as insufficient documentation may be identified, impacting the timeline or scope of the claim submissions. By ripping the band-aid off, these topics are discussed upfront and help to establish clear expectations for the entire claims team. As a result, both the Carrier and Insured can collaborate to identify the best path forward and potentially make adjustments that would mitigate the setbacks that have been identified. All of this is made possible by early communication, an atmosphere of trust, and up-front knowledge of the claim.

    Although many see the claims process as a challenge, there are paths that will help lead to a better way. By communicating early, creating an atmosphere of trust, and educating the Insured, the Carrier is further likely to build a smooth process for those involved. To learn more about the SDI claims, listen to our podcast with Derek Fennell, SDI Claims – Leading to a Better Way.


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