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What must the adjuster prove when they believe arson was committed?
- Motive on insured's part
- Opportunity on insured's part
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What is evidence of arson?
- Building was for sale
- Building was recently purchased
- Family pet was coincidentally absent
- Fire occurs after 11pm, on a weekend or holiday when business is closed
- Sentimental value items missing from scene
- Physical signs of flammable materials or other items that start fire
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How do you determine the amount covered?
- ACV vs. Replacement Cost
- Agreed amount - in advance it is determined the value to be paid out in the event of a loss
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What are the Insured's duties?
- Provide prompt notice
- Protect property
- Assist with the adjustment process
- Provide Proof of Loss
- Submit to exam under oath
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How do adjuster's attempt to minimize losses?
- Determine salvage value
- - Insurer retains right if full value is paid to insured
- Determine subrogation possibilities
- - Go after negligent 3rd party
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What are the two types of Business Income Claims?
- Prospective Settlements
- Retrospective Settlements
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What is a prospective settlement?
Before property is repaired
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What is a retrospective settlement?
After property is repaired and operations have resumed
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What are the requirements for a loss?
- Direct damage to property
- Result of a covered cause of loss (primary)
- Occurred at described premises
- Suspension of operations and/or incurring extra expense
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What is Business Income?
- Net Income - net profit that would have been earned (based on tax record)
- Continued normal operating expenses (included payroll)
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What is Extra Expense?
- To avoid or minimize the shut down and continue operations
- Repair or replace property to reduce the extent of business income loss
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What is a period of restoration?
- Begins 72 hours after the damage occurs
- No waiting period for extra expense
- Ends when property should reasonably be stored or repaired
- Ends when business is resumed at a new permanent location
- 72 hour waiting period is considered deductible
- Determining the restoration period is key to settling business income claims
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With respect to liability claim adjusting, how do you determine coverage?
- Claimant's allegation
- Is it something insured is protected against?
- Cover even if false
- - If there is reasonable assumption that it could be covered
- Bodily injury or property damages
- - What most liability policies will pay
- Intentional act?? (Not covered)
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With respect to liability claim adjusting, how do you determine legal liability?
- Investigate
- In a lawsuit - insurer defends in court
- As long as it seems reasonable that the coverage might apply to the claim and could conceivably be covered
- Does not matter if claim ends up groundless, fraudulent, false, etc.
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With respect to liability claim adjusting, how do you determine damages?
- Medical treatments
- Loss of earnings
- Pain and suffering
- Permanency and disfigurement
- Loss of consortium
- Survival Actions
- Wrongful Death
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What are survival actions?
Costs (medical bills, loss of wages) that claimant could recover prior to death
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What is wrongful death?
Legal actions that survivor of deceased can pursue
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With respect to liability claim adjusting, how do you negotiate and settle claims?
- Duty to settle
- Structured settlement
- Advanced payment and walk away settlement
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What is meant by duty to settle?
- Insurer has a right to fight - especially in cases of fraud or frivolous claims
- Good judgment to sometimes settle
- Legal obligation when it approaches the liability limits
- Could result in a bad faith claim insurer
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What is meant by structured settlement?
- Lump Sum Payment plus a series of future payments
- High cost claims, future damages, or children
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What is meant by advanced payment and walk away settlement?
- Discourage claimants fro hiring attorneys
- Quick - small lump sum payout
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