Our Insurance Recovery Group is often asked to help emerging companies understand their insurance program and assist with claims. This is the first in a series of posts that will address the insurance issues impacting growing companies. The series will cover everything from how to analyze the coverage you have and placement issues, to contractual indemnity and insurance requirements, and how to proceed if you have a claim.
Today’s post is on understanding the insurance you currently have. If you are new to your company or new to your insurance role, you should work with your insurance broker to determine what coverage the company already has in place. The broker will also guide you through new policy placements as well as renewals of existing policies. Confidence in your broker is critical, because you will be relying on their judgment regarding rates, availability, scope of coverage and exclusions, limits, size of deductibles or self-insured retentions, and pricing. It is not uncommon for companies periodically to solicit competing proposals from brokers as they continue to grow and seek advice from professionals with specialized knowledge regarding their particular industry.
It is also critical to know exactly what kind of coverage you have when you need to make insurance-related disclosures. For example, you may have active claims against the company that need to be disclosed to investors or as part of a merger or other business transaction. The existence of insurance may be material to the risk. You may need certain details including whether the carrier is defending the claim under a reservation of rights or whether the carrier has denied coverage but the company and the carrier are still engaged in an active dispute regarding the propriety of that denial. Public companies may also need to make insurance-related disclosures in connection with public filings. Again, a company may need to disclose whether they have coverage for a certain claim, whether their carrier has denied coverage, and what the company is doing in response. In these types of situations, the specific circumstances should be evaluated by in-house counsel on a case-by-case basis and it may be necessary to also involve outside corporate counsel.
Stay tuned for the next post in our series on the insurance application process and common pitfalls to avoid.