Claims officers, underwriters must talk way through litigious environment

Given that litigation against insurers is on the rise in Canada and the countrys courts have responded with unpredictable decisions regarding policy coverage it is critical for insurance claims and underwriting departments to be in constant communication, a seminar leader told the CIP Society Symposium 2007 in Toronto.
Irene Bianchi, the vice president of claims and corporate services of Royal & SunAlliance, said constant communication between an insurers claims and underwriting people can not only help underwriters to understand the courts direction in the interpretation of policy terms and exclusions, but it can also help identify opportunities for providing innovative coverage and products.
Its really critical that claims and underwriting departments talk to each other all the time, she said. We [in claims] can help to tell you what potential risks there are, but we can also tell you what there is a market for.
Also, communication between the two departments is essential because Canadian courts have issued a few head-scratcher decisions related to policy coverage and exclusions, which will ultimately affect what the underwriters are doing, Bianchi noted.
She listed a number of unpredictable court decisions regarding policy interpretations and exclusions, including Rewega v. The Personal Insurance Company in Calgary. Basically, Rewega allows a child to sue parents retroactively for injuries suffered while the child was in the mothers womb.
Bianchi also noted Walker v. Ritchie, which she said has expanded heads of damages for people who have suffered the loss of future interdependent relationships. In this case, she said, a judge awarded $125,000 to a plaintiff who argued that her injuries sustained in an auto collision had resulted in a loss of opportunity for marriage. The court ruled the claim could be compensated.
This case was groundbreaking a year ago, but now were seeing this routinely, for situations that arent nearly as significant, Bianchi noted.
Such decisions expanding underwriting coverage will only become more routine, as plaintiffs succeed in their David-versus-Goliath class-action strategies for obtaining court awards (paid for by insurers), she noted.