Duties in the Event of Claim, Occurrence or Suit

What do I do when a claim occurs? Should I contact the insurance company and file a claim? This is a very important question, and since it comes up every so often, it's worth writing about. Sometimes business owners want to take matters into their own hands and fix a problem rather than filing a claim. After all, most are entrepreneurs and this take action mentality is instilled in them, but sometimes this can get a business owner in trouble. So what should be done in the event of a claim, lawsuit, or occurrence? Let’s take a look at what the policy says.

Whenever the insured becomes aware of an occurrence or offense that may result in a claim, notice must be given to the insurer as soon as practicable. The notice may be given either oral or written. It should state (1) how, when, and where the occurrence happened, (2) the names and addresses of any injured persons and any witnesses, and (3) the nature and location of any damage or injury resulting from the occurrence or offense.
 
When a claim or suit is brought against any insured, the insured must (1) immediately record the details of the claim or suit and the date received and (2) notify the insurer in writing as soon as practicable.
 
The named insured is required to (1) immediately forward to the insurer copies of any demands, notices, summonses, or other legal papers received in connection with the claim or suit; (2) authorize the insurer to obtain any legal records or other documents; (3) cooperate with the insurer in the investigation, settlement, or defense of the claim or suit; and (4) assist the insurer in any action against any third party that may be liable to the insured because of the injuries or damage for which claim is made.
 
Finally, the condition makes it clear that no insured may make voluntary payment, assume any obligation, or incur any expenses without the insurer’s consent. Any voluntary payments made by an insured or expenses incurred by an insured without the insurer’s consent must be paid by the insured.  Doing any of the above is putting you in a position of assuming fault, responsibility, liability, etc. It is not your job to do this. Let the insurance company handle it. The only exception is the expense incurred for first aid at the time of the occurrence.

The policy is very clear on this provision and it also states, if the insured does not comply with all of the requirements of this condition, the insurance company may be relieved of its duty to defend and pay claims. I suppose you can think of each claim as a crime scene, don't tamper with it. If you have any questions about this policy provision, or any other Business Insurance question, please feel free to contact me.
 
Jason Matison
Commercial Insurance Agent
Austin, Texas