Professional Indemnity Insurance Claim?
Discussion
Maybe one for the insurance boffins out there. In short, my company made a bit of a howler - I can't go into details. When we discovered it, we informed the client and held our hands up admitting the mistake and rectifying it immediately. However, it's likely that the client experienced some material losses as a result and I've told the client we're not shirking our responsibility and will be fair and reasonable. He has appreaciated our honesty (we could have kept it quiet). The client is saying that he would like reparations for the losses. Which is fair enough.
I then talked to our IP insurers who emailed me this:
We are concerned that the matter may not have been notified to us immediately you became aware of a potential claim against you. They cannot confirm at present that the policy will respond and they will investigate the circumstances whilst reserving their rights.
I phoned them up and asked at what point are we meant to inform them of a potential issue, to which I got the reply "immediately". I then said, by that rationale you'll be getting hundreds of emails every day from us because, for example, if one of our people arrives late for a meeting then, theoretically, this could have consequences - and so the litigation ball is rolling. There was a long pause on the phone, but no retraction.
My question is this. I've never tried to claim from my PI insurers before are there any suggestions as to getting them to pay up with the minimum of fuss.? I'm thinking that I might get one of my lawyers to deal with the insurance company, for example.
I then talked to our IP insurers who emailed me this:
We are concerned that the matter may not have been notified to us immediately you became aware of a potential claim against you. They cannot confirm at present that the policy will respond and they will investigate the circumstances whilst reserving their rights.
I phoned them up and asked at what point are we meant to inform them of a potential issue, to which I got the reply "immediately". I then said, by that rationale you'll be getting hundreds of emails every day from us because, for example, if one of our people arrives late for a meeting then, theoretically, this could have consequences - and so the litigation ball is rolling. There was a long pause on the phone, but no retraction.
My question is this. I've never tried to claim from my PI insurers before are there any suggestions as to getting them to pay up with the minimum of fuss.? I'm thinking that I might get one of my lawyers to deal with the insurance company, for example.
Hmm..this is a bit like the car insurance thing were you're not supposed to admit liability, say sorry, etc.
You've admitted the error & told the client not to worry as you'll sort them out (assuming the insurance company would stand behind you). Sounds like it might actually be you paying up rather than the insurance company! How much are you talking about & how are damages to be assessed - it might end up in court?
You've admitted the error & told the client not to worry as you'll sort them out (assuming the insurance company would stand behind you). Sounds like it might actually be you paying up rather than the insurance company! How much are you talking about & how are damages to be assessed - it might end up in court?
Hard to know what the cost is likely to be, but possibly about £50k (ish). Over the years I've probably paid ten times that amount in premiums - and never made a claim. As such, if the insurance company don't play ball I'll get a lawyer onto them and take my business elsewhere in the future.
srebbe64 said:
The client is saying that he would like reparations for the losses. Which is fair enough.
I then talked to our IP insurers
I then talked to our IP insurers
So immediately you knew a claim against you was possible you acted according
srebbe64 said:
our IP insurers who emailed me this:
We are concerned that the matter may not have been notified to us immediately you became aware of a potential claim against you. They cannot confirm at present that the policy will respond and they will investigate the circumstances whilst reserving their rights.
We are concerned that the matter may not have been notified to us immediately you became aware of a potential claim against you. They cannot confirm at present that the policy will respond and they will investigate the circumstances whilst reserving their rights.
you have met the insurers requirement in the first part of the quote cut, therefore they can wiggle all they like, but I suspect that you will have to resort to a solicitors letter. Any other terms you may not have met ?
viggen114 said:
srebbe64 said:
The client is saying that he would like reparations for the losses. Which is fair enough.
I then talked to our IP insurers
I then talked to our IP insurers
So immediately you knew a claim against you was possible you acted according
Surely this is the point were it ought to have been realised that a claim was possible:
srebbe64 said:
In short, my company made a bit of a howler - I can't go into details. When we discovered it...
Edited by deva link on Tuesday 16th January 09:11
deva link said:
viggen114 said:
srebbe64 said:
The client is saying that he would like reparations for the losses. Which is fair enough.
I then talked to our IP insurers
I then talked to our IP insurers
So immediately you knew a claim against you was possible you acted according
Surely this is the point were it ought to have been realised that a claim was possible:
srebbe64 said:
In short, my company made a bit of a howler - I can't go into details. When we discovered it...
Edited by deva link on Tuesday 16th January 09:11
No not really. It's one thing realising you've dropped a wotsit, and telling the client, but it's quite another when you realise that there is potential for him to claim damages. It wasn't until some time after the cock-up occurred that it was realised that lossed had probably been incurred. At this point I informed my PI insurers.
Pethetic or what. I'm meeting my client tomorrow in a bid to amicably resolve the issue without even involving our insurers, so the discussion is therefore, by definition, without prejudice. However, I informed my insurer of this and they emailed me saying:
postpone the meeting / discussion with the Client, and tell them ‘this matter has now been placed in the hands of the insurers and we must no longer negotiate with you'.
What a pethetic approach by the insurers. By them taking over the negotiation it:
1) Guarantees that they will have to pay out;
2) Will probably lose me a client (our relationship is still good despite the cock-up);
3) If the relationship is adversely affected, the wronged party are far more likely to go for the jugular rather than resolve the thing like grown-ups;
As such, I'm waiting for my lawyer to call me in order to agree an appropriate move. One thing I will definitely do is dump my current insurer.
postpone the meeting / discussion with the Client, and tell them ‘this matter has now been placed in the hands of the insurers and we must no longer negotiate with you'.
What a pethetic approach by the insurers. By them taking over the negotiation it:
1) Guarantees that they will have to pay out;
2) Will probably lose me a client (our relationship is still good despite the cock-up);
3) If the relationship is adversely affected, the wronged party are far more likely to go for the jugular rather than resolve the thing like grown-ups;
As such, I'm waiting for my lawyer to call me in order to agree an appropriate move. One thing I will definitely do is dump my current insurer.
srebbe64 said:
What a pethetic approach by the insurers.
I'm sorry but I honestly think that you must be from another planet - what on earth did you think would happen once you notified the insurance company?
Do you think it's at all reasonable for you to negotiate with the client thinking that you can't really lose because the insurance company will cheerfully pick up the tab?
deva link said:
srebbe64 said:
What a pethetic approach by the insurers.
I'm sorry but I honestly think that you must be from another planet - what on earth did you think would happen once you notified the insurance company?
Do you think it's at all reasonable for you to negotiate with the client thinking that you can't really lose because the insurance company will cheerfully pick up the tab?
I think srebbe probably realises that if he deals directly with the clien the losses claim will be minimised and his business relationship is intact. Everybody wins from a possibly bad situation.
deva link said:
srebbe64 said:
What a pethetic approach by the insurers.
I'm sorry but I honestly think that you must be from another planet - what on earth did you think would happen once you notified the insurance company?
Do you think it's at all reasonable for you to negotiate with the client thinking that you can't really lose because the insurance company will cheerfully pick up the tab?
I can assure you that I’m from planet Earth, where a famous politician once said “jaw jaw not war war”. The problem is now solved thankfully. Basically, I picked the phone up, called the bloke's mobile and said "can I have an ‘off the record’ chat?" to which he said "sure".
I then said here's my dilemma: My insurance company are saying that unless they deal with it themselves that I'm not insured. If I let them deal with it they will be ultra-aggressive as they try to weedle out of any payments using every single piece of small print in our T&Cs, demand evidence of losses, etc, so it could be a long drawn out affair and I don’t think our relationship would stand the strain. I then offered him a settlement figure saying “if you don’t agree to it then those leaches that we all hate will have field day and no one wins” - he agreed with me and accepted the settlement. We thanked each other and we've now put the matter behind us. My lawyer is currently drawing up the wording. As such:
I get to keep a client with a very lucrative cut at the end;
The client gets a fair settlement;
Neither of us have months and months of hassle;
All reputations get to be maintained;
My insurance premiums won’t increase;
The lawyers get sod-all out of it;
Thank God common sense has prevailed.
Lastly, thanks for all the advice guys – some of it was helpful and wise.
johnfm said:
deva link said:
srebbe64 said:
What a pethetic approach by the insurers.
I'm sorry but I honestly think that you must be from another planet - what on earth did you think would happen once you notified the insurance company?
Do you think it's at all reasonable for you to negotiate with the client thinking that you can't really lose because the insurance company will cheerfully pick up the tab?
I think srebbe probably realises that if he deals directly with the clien the losses claim will be minimised and his business relationship is intact. Everybody wins from a possibly bad situation.
Well, the insurance company certainly wins - they didn't have to pay out anything.
deva link said:
johnfm said:
deva link said:
srebbe64 said:
What a pethetic approach by the insurers.
I'm sorry but I honestly think that you must be from another planet - what on earth did you think would happen once you notified the insurance company?
Do you think it's at all reasonable for you to negotiate with the client thinking that you can't really lose because the insurance company will cheerfully pick up the tab?
I think srebbe probably realises that if he deals directly with the clien the losses claim will be minimised and his business relationship is intact. Everybody wins from a possibly bad situation.
Well, the insurance company certainly wins - they didn't have to pay out anything.
Well if the bloke hadn't accepted my offer then it would have been in the hands of my insurers. I needed a plan and a back-up. Incidentally, the monies paid in damamges is one fraction of what the deal's worth to me, so I ain't complaining - especially as it was us that cocked-up up in the first place!
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