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Anatomy of an Excess Liability Claim
Mark Bluestein, Vice President/Counsel – AEGIS Insurance
Services, Inc.Garrett Finnegan, Senior Litigation Counsel – AEGIS
Insurance Services, Inc.Mark Rutkowski, Senior Litigation Counsel –
AEGIS Insurance Services, Inc.David Schlee, Shareholder – Schlee,
Huber, McMullen & Krause PC
Introduction
• Purpose – “back to basics” discussion of best practices
Claim reporting
Investigation
Evidence collection and preservation
Litigation management
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Claims Procedures
• AEGIS provides specific guidelines to assist in effective
claims management “Assure Effective Management of Claims and
Claims
Services and Appropriate Advice to AEGIS and its Members
Regarding Claims Issues to Achieve the Business Objectives.”
• Claims Procedure Guide is available through AEGISlink.com
AEGIS Claims Reporting Protocol
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AEGIS Claims Reporting Protocol
• Importance of “prompt reporting”
• Proper and timely reporting of claims requires a clear
understanding of what and how to report
• Any uncertainties should be clarified by discussions with the
Claims Division
AEGIS Claims Reporting Requirements per Policy
The AEGIS Excess Liability Insurance Policy provides that
“As a condition precedent to rights under this POLICY, the
INSURED shall as soon as practicable give the COMPANY:
1. Written notice of any CLAIM made against any INSURED
estimated by the INSURED to involve ULTIMATE NET LOSS in excess of
fifty percent (50%) of the UNDERLYING LIMIT shown in Item 6 of the
Declarations, or
2. NOTICE OF CIRCUMSTANCES for any OCCURRENCE or Circumstances
likely to give rise to a CLAIM to Condition (C) (1) would
apply;
and such information and cooperation as the COMPANY may
reasonably require. Neither Application for this POLICY or any
Endorsement or for any renewals thereof nor any information
contained therein shall constitute a notice of CLAIM or NOTICE OF
CIRCUMSTANCES.”
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AEGIS Claims Reporting Requirements
• All occurrences or claims wherein the member’s reserve or
evaluation is 50% or more of the self-insured retention
• Any occurrence which may give rise to a claim creating
potential exposure to AEGIS regardless of the self-insured
retention
• Any claim or class of claim, involving latent injury or damage
Where the injury or damage develops over time
Where the time of the injury or damage is uncertain
Where there is repeated exposure before an injury or damage is
manifested
• All potential claims involving serious injuries
When to Report
Serious Injuries
• Death
• Brain damage
• Extensive burns
• Paraplegia
• Amputations
• All other injuries likely to result in a permanent disability
rating of 50% or more
• Injuries resulting in multiple deaths
• Substantial property damage
• All class actions
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AEGIS Claims Reporting Requirements
• A member should acquire sufficient factual information and
report promptly in writing to:
AEGIS Insurance Services Inc.Claims Division
One Meadowlands PlazaEast Rutherford, NJ 07073
Bruce W. Roznowski, Senior Vice
[email protected]
Where to Report
AEGIS Claims Reporting Requirements
• Members and brokers can also report electronically on our
website:
www.aegislink.com
• To obtain access to our website if you do not have a password,
please contact our Claims Division Administrator, Cindy
Gagliardi:
[email protected] 201-508-2865
Where to Report
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AEGISlink.com
• New claims system
• User-friendly reporting process
“My Claims”
Incident Investigation
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The Window of Opportunity
• Official investigators at site Providing cover
• Witness interviews Before they clam up
• Preserve physical evidence Before it goes away
The Investigation Team
• Outside counsel vs. inside counsel Privilege issues
Anticipation of litigation vs. standard company practice
Insurer / insured privilege
Inside counsel should only handle litigation – e.g., general
counsel may not preserve privilege
• Counsel as team leader
Counsel
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Scene Documentation
• 3D laser scan technology May replace much of the traditional
measurement
and photography work Larger engineering firms have it Can also
document explosion damage
The Investigation Team
• Company employees vs. outside consultants
• Disciplines Fire cause and origin Engineer Metallurgy /
plastics Odorant – chemist Industry codes and standards Gas
migration Sewer gas and sewer systems
Experts
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Command and Control
• Essential – decision-maker in charge
• Guidance for investigation
• Guidance for interaction with outside investigators
• Evidence preservation
• Evidence control
• Communications control
Permission to Enter Scene
• Official investigating agency Can give permission if scene not
released Should advise official investigator even if scene is
released Invite attendance
• If scene released – need owner permission Permission from
property insurance carrier If representative is on scene
If not, best to go to owner
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Check the Equipment
• Odorometer, CGI, CO detector
• Selection of unit – check service history Used unit – track
record Record serial number for unit Check calibration of unit
• Combustible Gas Indicator (CGI) Hose – not new
• Odorometer Hose – new
Gas
Company Personnel on Scene
• Limit the number of personnel
• Media and adverse investigators Audio and video recorders
• Instructions Do not talk to outsiders Be professional – no
wisecracks Refer inquiries to spokesperson Exception: official
investigators Stick to the facts – no opinions
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Handling of Physical Evidence
• Photograph the evidence in place The fire scene is evidence
Note the location on diagram
• Who owns the evidence? If someone else Document the
preservation request
Set up spoliation claim
Extreme case: legal action
If your company Chain of custody documentation
Storage – secure location
Odorometer Tests
• Do this as soon as possible
• Closest location to the incident location Consider several
locations
• Use several different testers Check for colds, allergies, etc.
Can be done by company personnel (2) Separate reading by official
investigator on scene
• Two readings First odor Readily detectible
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Witness Interviews
• Window of opportunity
• Attorney or under attorney guidance Documentation – attorney
memo, including impressions
of witness(es) Decision as to statements, affidavits,
recording
• Company personnel on alert If they overhear information, get
to counsel for follow-up
Employee Interviews
• Do not record audio – no need Exception – if employee is to be
terminated or disciplined
• Attorney interview only – not by non-legal personnel unless at
direction of attorney Attorney makes memo of the interview Control
who is present – only those needed for technical
support
• Former employees
• Union issues – union representative present?
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Interviews by Official Personnel
• Cooperation is important
• Just the facts – no opinions, unless obvious
• Should have identified and interviewed key personnel before
But can't defer or delay Attorney can be present, but don't make a
big issue of it.
Ask but don't insist. There are exceptions
If “barred,” then perhaps insist
The Media
• Designate a spokesperson – and stick to it
• Should NOT be counsel
• Usually company communications director Used to dealing with
the press Knows the personalities
• Company personnel instructed to refer inquiries to
spokesperson – training
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EvidenceAn Example
EvidenceAn Example
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Document Control and Preservation of Evidence
Documents and Tapes
• Paper: memos, correspondence, printouts
• Electronic: email, customer records, dispatch records,
dispatch recordings, surveillance video, SCADA, mapping system,
telephone calls, voice messages, photographs, text messages,
websites
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Objectives
• Preserve information for use in defense
• Avoid generation of adverse evidence
• Avoid evidence spoliation
Legal Hold Notice
• Initial notice – as soon as possible Do not wait for
lawsuit
• Identify recipients
• Establish subject matter
• Amend freely as investigation progresses
• Repeat notices
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Creation of Documents
• Create a document only when necessary Required reports and
forms Instruction by counsel or others in charge of
investigation
• Discourage the creation of documents Especially e-mail
Personal memos Long narratives
Fact vs. Opinion
• Stick to the FACTS
• Avoid written opinions No written opinions until all the facts
are known Written preliminary opinions – always a problem in
litigation
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Internal Evidence Control
• Instruction to personnel In general – no discussion of
incident “Shop talk”
On scene Don’t talk to strangers
Don’t talk unless necessary
Be professional
Discussion with dispatch – recorded Be professional
Verbal
Company Evidence
• Identify key company employees Employees who were involved in
service to incident location Immediate interview by counsel Before
official investigators ask
• Identify key company policies that may be pertinent
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Litigation Management
Selection of Defense Counsel
• Constructive partnership and communication
• Claims professionals must be actively involved in evaluation,
strategy, and disposition of each case
• Defend early and an aggressive strategy should be developed
and followed on probably tried cases
• Litigation plan and budget are recommended
• Review and reevaluate frequently
• Reasonable and necessary litigation expenses
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Litigation Plan
• Gives the defense team visible targets at which to aim
• Enables the development of a realistic case strategy
• Requires defense counsel to consider litigation strategy
before each important phase of the case
• The foundation of a good litigation plan is involvement,
management, and control
Defense Counsel Reporting
• Facts
• Expert opinions and believability of the experts
• Assessments of the liability of each party
• Damages / injuries
• Other factors and consideration Venue
Skill of judge or other counsel
• Counsel should provide a verdict range
• Counsel should have a strategy for disposition, including
motion practice, i.e. Daubert, summary judgment
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AEGIS Claims Services
AEGIS Claims Litigation Services
• Gas Litigation Service (AGLS)
• Electric Litigation Service (AELS) Expert Witness Database
• Climate Change Litigation Service
• EMF Litigation Service
• Employment Practices Litigation Service
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AEGIS Claim Services
• The AEGIS Structured Settlement Company (TASSC)
• Loss Control Engineers with utility backgrounds perform
risk
assessments and hold training programs Investigating Natural Gas
and Electrical Incidents
workshops
Educational Programs
• AEGIS Roundtables Witness Selection and Preparation
AEGIS NJ office: September 12 and Boston: September 26
Ethics in 2014 – Across the Board AEGIS NJ office: March 6 and
Chicago: March 20
The Essentials of Claims Investigation AEGIS NJ office: June 5
and New Orleans: June 19
• 2014 Wildfire Symposium
• 2014 Claims Seminar
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Working with AEGIS Claims
• Successful resolution of claims is a team effort
• Regular reporting of litigation status
• Regular contact with AEGIS Claims Professional
• Utilizing AEGIS litigation resources and experience
Success Through Partnership
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Thank You!
AEGIS2013 Policyholders’ Conference
Baltimore, MarylandJuly 29 – August 1