The potential for thousands of lawsuits resulting from silica, treated lumber, even mold. Billions of dollars a year of property theft and fraud by employees. Spiraling worker compensation claims. Ever more creative judicial rulings in lawsuits. Destruction of facilities resulting from natural disasters. Liabilities brought on by mergers.

Large and small companies alike face the possibility of becoming embroiled in a claims process through their own actions, actions taken against them by an outside party or due to a weather-related incident or other catastrophic events. Consider the reach of the $200 billion in asbestos litigation, which has impacted not just actual manufacturers, but far-removed third parties, sending many companies into bankruptcy. Or the estimated $600 billion lost each year to employee fraud and abuse, which impacts soundly on the bottom line, as well as in the most extreme cases, on the reputation and long-term existence of a company. Or the property destruction and loss of productive work time as a result of Hurricane Isabel, which totaled in the billions of dollars.

While not all of these losses are preventable, they are all manageable, provided that companies have the proper claims management program in place to handle or manage claims. Without such programs , companies may suffer from drawn out claims procedures, excessive legal fees, reduced recovery, distracted management, rising insurance premiums, and even loss of coverage.
To manage the complex nature of claims, companies need integrated solutions provided by professionals with expertise in claims management, investigative, legal, accounting, and related specialties. Such solutions should also be considered at the earliest stages (i.e. during the insurance program design) so that companies and their insurers know where control over the claims management process rests and the requirements to be met. Only then can recovery be made in a cost-effective and efficient manner.

What Will You Say When They Ask What Happened?
If you are concerned about the processes and costs associated with claims management, you should be asking yourself the following questions:

• How can I accurately determine the extent of my potential liabilities?
• Have I already established the necessary accounting and technical protocols to measure and track the extent of my losses?
• Does my current insurance policy include claim handling? If not, do I need to hire a third-party administrator to handle the claims process? Do I have all the expertise on board that I need to make and defend against claims?
• Do I understand the reporting requirements for making a claim?
• Do I understand that failure to document losses can limit recovery?
• How can I present my claims to ensure maximum recovery from insurers?
• Am I aware of the possible costs of litigation?
• How can I prepare to mitigate the damages from a lawsuit?
• Am I aware of alternatives to litigation such as dispute resolution?
• Does my company have the necessary expertise to conduct financial investigations?
• Have we acquired or merged with a company that now exposes us to additional liabilities or litigation? Have we gotten the necessary permission to transfer the company’s insurance policies?