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SELF
INSURED
PROGRAM ADVANTAGES It is well known in the Insurance Industry
that less than 5% of all claims are litigated in the Courts to a
conclusion. In that regard, the
following factors significantly effect claims management for Alternative Risk
Transfer Captives, RRG’s, and Self Insured’s. FIRST; Insurance
Company claims departments have evolved into managing claims on an Economic
settlement basis with little interest with regard to negligence. If it will cost $10,000 to defend a non-negligent/not-at-fault
claim, and the Insurance Company can settle for $8,000, the claim is closed. However, business owners would
sooner defend a claim they are not at fault for, than pay. SO, one option is why not pay the
Insured the $8,000, obtain a release of all claims from the Insured and
let the INSURED defend his own claim if he so chooses. OR Better yet, begin sending a
message to plaintiff attorneys and claimants, that the e Insurance Company
will defend non-negligent/not-at-fault claims thru the court
process. The expectation is that 70%
of all claims will go away. SECOND; Insurance
Companies are frequently, if not always, required under DUTY TO DEFEND laws
to provide a defense even for uninsured/UNCOVERED CLAIMS. The common practice of Insurance
Companies today generally requires the Insurance Company to forward a
“Reservation of Rights” notice to the Insured, if the Insurer identifies that
the claim is not an insured covered claim, or perhaps one of the
allegations may be insured, while the other claim allegations are not
covered by the Insurance Policy, a defense must be provided for all claims. |
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