Introduction 7/31/2013. Purpose back to basics discussion of best practices

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1 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 1

2 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 2

3 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. 3

4 AEGIS Claims Reporting Requirements When to Report 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 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 4

5 AEGIS Claims Reporting Requirements Where to Report A member should acquire sufficient factual information and report promptly in writing to: AEGIS Insurance Services Inc. Claims Division One Meadowlands Plaza East Rutherford, NJ Bruce W. Roznowski, Senior Vice President BruceRoznowski@aegislimited.com AEGIS Claims Reporting Requirements Where to Report Members and brokers can also report electronically on our website: To obtain access to our website if you do not have a password, please contact our Claims Division Administrator, Cindy Gagliardi: cindygagliardi@aegislimited.com

6 AEGISlink.com My Claims New claims system User-friendly reporting process Incident Investigation 6

7 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 Counsel 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 7

8 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 Experts 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 8

9 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 9

10 Check the Equipment Gas 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 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 10

11 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 11

12 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? 12

13 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 13

14 Evidence An Example Evidence An Example 14

15 Document Control and Preservation of Evidence Documents and Tapes Paper: memos, correspondence, printouts Electronic: , customer records, dispatch records, dispatch recordings, surveillance video, SCADA, mapping system, telephone calls, voice messages, photographs, text messages, websites 15

16 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 16

17 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 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 17

18 Internal Evidence Control Verbal 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 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 18

19 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 19

20 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 20

21 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 21

22 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 Wildfire Symposium 2014 Claims Seminar 22

23 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 23

24 Thank You! AEGIS 2013 Policyholders Conference Baltimore, Maryland July 29 August 1 24