The Claim Game

Make your facility as safe as possible by establishing solid incident-response procedures

By Allen F. Wetzel

You returned to your office to find a phone message requesting you call a woman who said her son was hurt on your grounds. She wants to file a claim. A claim? No one's ever filed a claim. You don't even know your insurance carrier's name. Now what? Don't worry, we can help.

Whatever your facility, obviously visitors do not wish to go home unhappy or injured. Certainly, the goal is zero claims, but in this litigious society, many industries would welcome a lower loss ratio. Unfortunately, people still file trivial lawsuits. Whether you have one claim or hundreds, there are common procedures that can reduce claims and improve safety.


The keys to handling claims are communication and speed. Clearly, you need to make your facility as safe as possible by planning, training, conducting frequent inspections and following solid incident-response procedures.

Once an incident does occur, the facts need to be gathered quickly and communicated to the person who will handle the claim. If this person is unknown to you, do some research so you will know where to send patron complaints. Successful facilities do not rely upon security or management staff to gather and forward data. Require all involved employees to complete an Employee Witness Statement (EWS) on every incident, which is immediately submitted to the claims manager. The EWS tells the claims manager that something occurred.

Additional documents such as first-aid, security, maintenance and manager reports are incident keys, helping the claims staff understand what happened. Anyone who was associated with an incident, including customers, should be interviewed or fill out a statement. Train new employees that they must automatically complete an EWS, no matter how insignificant incidents appear to be. It is helpful to receive multiple reports from various departments on the same incident. All reports help piece the puzzle together and allow the claims staff to identify trends. Let the claims expert decide what data is or is not important. Do not let anyone, including management, refuse to write up what they saw or edit their statement because they believe their involvement was minor, the incident seems insignificant or they are too busy to write reports.


Investigation and reporting should begin immediately following any incident. Apply a "one voice" process to claims management, minimizing the number of employees who talk to patrons prior to any communication with the claims handler. Once initial data is gathered, immediately fax, e-mail, Fed Ex or phone the details to your claims administrator. Do not wait until all data is collected. Make sure your staff knows how to contact your claims person following any incident, especially if you are off property. Forwarding partial data to your claims expert, within the first 12 hours, allows them to decide if they need to make a courtesy call to the patron. Waiting until an investigation is complete causes the loss of valuable contact time. Most guests want to know that your business cares about them. Immediate contact with an injured guest can head off ill feelings and their desire to seek further damages, find a lawyer or open a claim.

In some cases, a claims expert may not contact the patron if it appears the guest caused the event, and your facility will be denying their claim, thereby not inviting a disagreement. When contacting the guest, the claims handler should concentrate on gathering the patron's side of the story. There is time, later, to debate the facts or dig for further details. The first story will be closest to the truth. If your claims administrator is non-confrontational, the guest will have little desire to embellish their account to gain sympathy or inflate their claim.


Sufficient preparation must go into developing a claims relationship before your claims program runs smoothly. One secret is to treat your general liability (GL) team (insurance carrier and broker, claims administrator and legal counsel) like part of the company family. Educate the team about your facility. Let them see the site, annually. Advise them of procedural changes. They should understand your entire operation, so when the claims handler talks with an aggrieved patron, your expert will know if a claimant is stretching the truth about an incident.

Conduct meetings with your GL team to review safety programs and discuss improvements. Do not change your claims administrator or legal counsel frequently. Maintain continuity with the GL team, so they know your staff, procedures and the kind of events that occur. Some companies require new insurance carriers to allow facilities to retain their preferred claims administrator and counsel. Your legal counsel should approve all incident documents for content and layout. Employees should have easy access to incident forms.


Provide early advisory to your counsel following an incident. For example, after a significant evening incident at a particular facility, not only did the managers call their claims administrator, but the managers also phoned their legal counsel at home. From that time, the action plan was channeled though their attorney's office, creating an attorney-client privilege on the event follow-up. When it came time for the managers' deposition by plaintiff counsel, most of the manager's activities were privileged.

So keep your attorney in the loop even before a claim turns serious. Since your lawyer will oversee lawsuits that your administrators can't resolve, it's advantageous to have your counsel working in harmony with your claims staff as cases progress. It costs a few dollars more upfront, but you'll value the long-term reduction in claims count and costs.

Claims staff should know the statute of limitations for claims filing in your region and work to resolve differences before a guest can file a lawsuit. In some jurisdictions, minors are not liable for their own actions, so following up on incidents involving minors is a must. Practice prompt and thorough incident investigation involving pregnant women, an often overlooked dual-claim potential.


When setting up your program, have your general liability (GL) team (insurance carrier and broker, claims administrator and legal counsel) help establish what records need to be created and maintained to reduce claims and keep you out of court.

Meet with your financial and legal experts to establish a company Document Retention Program, listing how long records are kept, especially incident and claim files. The program should illustrate what kind of messages and reports to save. It should address the retention of all generated or received business documents and when documents should be purged. Assign one employee to verify that purging is regularly completed.

Some insurance carriers reward, with lower premiums, those companies that maintain a Document Retention Program. If you are a small facility and unable to hire a lawyer to create this program, ask your insurance company for tips on maintaining your document paper trail, which will protect your insurance carrier and you.

When managing your claims paperwork, the 80/20 rule applies: 80 percent of all the incident data you gather will never be used; only 20 percent of the incidents that occur will turn into claims. The trouble is no one knows which 20 percent will be needed, so you must investigate and retain data on all incidents.

Maintain documents that are required by OSHA, the IRS and other governmental agencies. Some laws require the documentation of inspections and their abatement. If you are concerned that internal documents might put you in the courtroom spotlight, then copy your legal counsel on documentation during the handling process. Keep employee-training records for the same time period you keep incident files. Don't purge employee-training files after three years and incident records after five years, only to find you needed those employee records for a late filed lawsuit.

Never set up programs that you cannot maintain. If internal documents indicate that your company practices a specific procedure, make sure that procedure is done and the follow-up is documented. Documentation should be clear, never confusing. Avoid documents that allude to noncompliance of legal requirements. You can seldom have too much good documentation.


Continue to gather investigation data until your claims expert feels all necessary information is captured. Remember, employees and witnesses disappear quickly, so work to procure photos and witness statements within hours of the incident. If the lawsuit filing statute of limitations is two years, employees working the day of the incident could be long gone by the first court date. Save all records that pertain to that day's operation. Retain copies of maintenance records of the equipment that might be associated with the incident. Attention to detail and preventive maintenance records will show due diligence within your operation. Preserve physical evidence. Consider the use of closed-circuit TV cameras in high-incident occurrence areas.


On the employee side of the fence, these same procedures can assist with Worker's Comp or discrimination claims. Set up your program in advance with your legal team, Worker's Comp or claims experts. All employee injuries must be reported to the appropriate supervisor, who must investigate the incident, regardless of the injury significance. Require EWS following any event. You cannot recapture evidence or eyewitness accounts if you don't gather them quickly. Set up a system where employees can confidentially report events that seem questionable to them. Investigate all such reports.


In a confidential manner, report all incidents to managers in departments where the event occurred. In the amusement industry, ride and maintenance directors receive reports of all ride-related events. This permits them to look for trends, lack of employee training or possible repair lapses, allowing for the correction of procedures before additional episodes transpire. Reports should go to the executive team, explaining what incidents occurred, the cause and how each claim was settled. This allows division heads to get involved if appropriate.

Request your claims handler or insurance carrier visit your facility and offer suggestions. Claims can be reduced through lessons learned from incidents at comparable businesses. Require your insurance carrier to educate you to incidents common to your industry and use the information to prevent similar situations at your facility. Invite purveyors to provide quality-assurance inspections on the use of their products. Solicit industry veterans to visit your facility to offer pointers. Use recommendations from outside agency inspectors to improve your procedures.

If you have a primary supplier (or co-promoter), who is an essential part of your operation, ask them to name you on their insurance policy as an also insured. If necessary, use the police department to take reports on incidents. Ask your legal counsel when this should or should not be done. Join industry organizations and study trade journals to discover improved claims procedures. Promote constructive comments from customers who might point out observed hazards.


Now, you're saying, "That's fine for the big operations, but I'm running a school playground, and we've never had a significant incident."

No doubt some recreational facilities do not experience frequent claims. Consider yourself lucky. It's a matter of when, not if an incident will occur. Even small facilities should set up procedures to provide incident data to their claims person quickly. Require your on-site personnel to carry a notepad and pen and document any potential incident. Note the time, date and involved parties (even if it's only a description without a name). Turn those notes in to the person who would handle a claims call. Downsize these ideas to create simple procedures, but don't let your guard down.

If a claim turns into a lawsuit, the litigation process will center around negligence and prior knowledge. Did you know, should you have known and what was done about it? Remember that a property damage claim could be just as expensive as a personal-injury concern.


Inspect your operation to identify and abate concerns before they become hazards. Check the sidewalks around your facility. Many cities have ordinances making property owners responsible for incidents occurring on poorly maintained sidewalks. Document your inspections and resolution of problems.

Write training manuals that educate employees on how to safely do their jobs and regularly retrain veterans. Manuals will help your claims administrator understand how things work when they have to handle a claim, plus manuals will support you if a case goes to court.

Require employees to shut down equipment if they hear a strange noise or if machinery is not operating correctly and not to restart the equipment until an expert has inspected and cleared it for operation. Reward exceptional employee safety performance.

Post signs of explanation that tell customers what is expected of them and what procedures you practice to help keep customers safe and the operation running smoothly. For example, post a sign saying no customers are permitted in employee work areas.

You need safety programs that not only look good on paper but are functional, day to day. Never deviate from established procedures. Such lapses leave an opening for a claimant to prevail.

When confronted with a complaint, approach all issues fairly and promptly. Exercise complete follow-up of the concern and try to resolve concerns in a fair manner. Continually improve your operation. Stress communication and documentation, and you'll be surprised at the positive results. Soon, you'll enjoy an excellent claims record and be ready if the unexpected should happen.

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