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In today's legal environment, virtually all organizations face exposure from mass tort and complex liabilities. Claims arising out of products liability, environmental contamination, asbestos, silica, pharmaceuticals, medical devices, chemicals, and construction defects, as well as countless other exposures, have taken a significant financial toll on companies, forcing many into bankruptcy. Marsh's Mass Tort and Complex Liability Practice provides multi-disciplinary solutions that enable our clients to manage the financial effect associated with mass tort and complex liabilities.
What will you say when they ask what happened?
Proper assessment of risks is critical. To begin the process of assessing risk, executives should ask the following questions:
- Do we fully understand our actual and potential risks? Many mass torts have emerged slowly, or have changed substantially after emergence.
- Have we accurately calculated the scope and potential impact of these liabilities, and are they financially material to the organization?
- Do we have, or can we obtain, copies of our old insurance policies? Do we fully understand the terms and conditions of the policies and, consequently, the value of these historical assets?
- Do we understand how to optimally organize the policies and claims data to maximize our potential recovery and minimize the possibility of coverage disputes?
- If the policies are not available, how can we gather enough secondary evidence to meet our burden of proving the existence of coverage?
- Have we established the necessary protocols to capture critical claims and financial data required to pursue optimal recovery strategies?
Who’s looking out for you?
Marsh's Mass Tort and Complex Liability Practice has created a phased and integrated approach that anticipates the development of mass tort exposures and offers integrated solutions to mitigate adverse financial and operational consequences. Each phase is supported by practitioners, including actuaries, attorneys, claims consultants, economists, construction defect experts, engineers, environmental analysts, forensic accountants, mathematicians, statisticians, and other professionals.
The typical phases of managing mass tort and complex liabilities include:
- Analysis of historical insurance assets, including policy archeology and insurer solvency analysis
- Claims and financial data management, including forecasting future liabilities
- Allocation analysis and modeling
- Formulation and implementation of strategic recovery solutions
- Claims handling, including the presentation and pursuit of receivables in keeping with settlement or cost sharing agreements
Analysis of Historical Insurance Assets
Organizations with mass tort and complex liability exposures often seek recovery under policies that span years—even decades. Utilizing proprietary software (Insurance Coverage Explorer), Marsh consultants conduct a comprehensive analysis to determine the scope and extent of historical insurance assets. The policies are imaged in text-searchable fashion, relevant terms and conditions are extracted to create an electronic policy archive, and significant amounts of complex data are then reduced to graphical representations. A complete solvency analysis is also conducted to determine the extent of potential asset impairment due to insurer insolvencies.
Data Management and Forecasting Liabilities
Collection, analysis, and management of voluminous and complex data is critical to pursuing insurance recoveries and forecasting future liabilities. Our professionals assist clients with identification of key data elements, creation of protocols for the collection of relevant claims data, and analysis of the information to support recovery strategies. While accurate and verifiable data is essential to any recovery effort, many companies also elect to forecast future liabilities utilizing much of the same information. When viewed in conjunction with historical insurance assets, forecasting liabilities can assist a company in determining whether emerging liabilities are material within the context of corporate governance. Further, forecasts may be used in the development and pursuit of settlement strategies with insurers.
Allocation Analysis and Modeling
Determining an insurer's responsibility for losses that occur over time and may involve policies issued over a number of years is significantly influenced by legal precedent on a state-by-state basis. Key issues potentially involve the appropriate trigger-of-coverage, number of occurrences, treatment of defense costs, the effect of insurer insolvency, and application of self-insured retentions. Marsh has developed proprietary allocation technology to assist clients with the assimilation of complex claims data and the legal theories that may govern interpretation of the policies. The modeling outcomes are displayed numerically and graphically to support negotiations and optimal recovery strategies.
Formulation and Implementation of Strategic Recovery Solutions
Building upon the analytical results of the preceding phases, Marsh utilizes its unparalleled institutional knowledge of global insurance markets and access to key decision-makers to implement strategic recovery solutions. We have assisted numerous clients in reaching favorable resolutions without the need for costly and time-consuming litigation. To the extent that coverage litigation is necessary, our consultants will support legal counsel in the analysis and preparation of litigation strategies.
Financial Management and Claims Presentation
Negotiations with insurers often produce complicated settlement or cost sharing agreements. Tracking defense and indemnity payments against the terms of settlement agreements that typically involve numerous insurers can present significant organizational challenges. Marsh offers a mass tort administration enhancement to its STARS™ risk management information system, as well as other solutions, to help organizations manage the enormous volume of data that may be associated with ensuring proper reimbursement from insurers.
Efficient Claims Administration Solutions
The administrative requirements associated with an emerging and evolving mass tort can place significant burdens on a company's internal resources. In order to comply with the notice requirements of primary and excess policies, it is recommended that companies provide notice to all primary and excess insurers of each claim or lawsuit irrespective of perceived liability or monetary exposure. In an effort to assist clients with effecting proper notification, Marsh has developed a process, supported by proprietary technology (Electronic Claim Notification System), that allows for the full text of a claim or lawsuit to be provided electronically. Once initial notice has been effected, Marsh has re-engineered the processes required to handle related correspondence, respond to status inquiries, and address insurer's initial coverage positions. This approach to the challenges associated with claims administration may result in a reduction of related costs, and relieve an organization's internal resources of significant administrative burdens.
If you have any questions or would like additional information, please contact us.
Kroll, a subsidiary of Marsh & McLennan Companies, offers services that complement Risk Consulting's. Learn about Kroll's
technology services capabilities.
If you are seeking information about insurance and related services, please visit marsh.com.
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