January 22, 2015
Claims happen. Audits happen. Investigations happen. In Segal Select Insurance’s experience, it is always a best practice for plan fiduciaries to file notices with their insurance carriers as soon as possible for claims, audits or investigations. Depending upon the policy, the definition of a claim may include a lawsuit, a written demand for damages, or an event. Similarly, carriers should be notified right away of the receipt of a notice by any regulatory authority — for example, the Department of Labor (DOL), the Securities and Exchange Commission (SEC) and the Department of Justice (DOJ) — indicating the start of an audit or investigation. It is also advisable, with appropriate advice from legal counsel, to give carriers prompt notice about circumstances that have the possibility of resulting in a claim.
Segal Select offers advice about timing notices depending on the type of coverage:
If you have questions about the value of notifying insurance carriers promptly about claims for any of the types of coverage listed above or concerns about the implications of giving notice of a claim, please contact your Segal Select insurance professional broker. Your Segal Select broker will be able to help you think through some of the coverage issues. In addition, Segal Select can help you explore positions the insurance carrier may take in response to the receipt of a claim.
Segal Select Insurance is not a law firm. Nothing herein is to be considered a binding interpretation of coverage. Only the insurance carrier can provide such an interpretation. Insurance policies are a legal contract and legal counsel should always be consulted.
1 Late notice is not a precisely defined term but, generally, will be considered any period of time after that specified in a policy. However, many states also require that the carrier be able to demonstrate that the late notice has caused it financial harm, meaning that the late notice did or will directly affect the amount of the paid loss.
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