By Ken Reinig
Although the title of this article addresses a “tongue in cheek” look at our members and society in general, we all know too well that there is great deal of truth in this statement. Unlike previous articles I have written in the past in which I have attacked the hallowed and revered Trail Lawyers Association, I would like to turn the tables a bit and point out the problems with the other side; the liability insurance companies.
As a result of poor customer service, the insurance industry has actually contributed to the success of the trial lawyers. Granted, some insurance companies are worse than others, but in general, every single one of them could improve their communication skills, and most of them could use a “backbone” transplant. Personal injury lawyers will never admit this, but they share information about which insurance companies are pushovers and which ones will put up a fight. In other words, some personal injury lawyers will often take on a frivolous case knowing that the insurance company will have a settlement point where it is not economically beneficial to fight a lawsuit, even if the claim is totally groundless and without merit. It makes me sick.
The following are, what I believe to be, the key issues involving liability claims from a defense position.
|1.||Prompt notification by the club owner. When a member is hurt at the club, it is often a minor injury. (Member falls off a treadmill, member slips in the shower, member drops a weight on their own foot. etc.) Once an incident occurs, it is reported to the acting club manager and/or the club owner, who then will report the injury to the agent. The insurance agent then completes certain reports to forward to the claims department at the insurance company. In a perfect world, this should all happen on the same day the incident occurred. However, if the club decides that the injury was insignificant, no report may ever be filed. This, of course, could be a major problem. If the injured member decides six months later that the injury he or she sustained is still bothering them, or if a friend or relative suggests that they contact an attorney, we are now saddled with the task of re-creating the event. The longer that time passes, the less likely we will be able to develop an accurate accounting of what exactly took place. Insurance companies are then forced to deal with a claim that comes down to an “our word against theirs” scenario. It is important to document EVERY incident at the club the DAY the accident occurred. Be sure to obtain any witness reports as well.|
|2.||Prompt response from the claims department. It is unfortunate that many of the problems involving a claim occur at this level. I can’t tell you how many times a simple $200 medical payment has escalated into a $10,000 litigation process. If insurance company claims adjusters would simply pick up the phone and contact the injured member within 48 hours, they would be able to establish a professional relationship with the claimant early, thereby reducing the probability that the claimant will contact an attorney. Early communication is essential.|
|3.||Take a stand and stick to it. Nothing upsets me more than an insurance company that is not willing to stand up for the rights of the club owner and the integrity of the insurance policy. If a member injures themselves as a result of their own carelessness, and they are seeking damages other than what is covered under “premises medical” payments, than the insurance company’s claims adjuster should tell the plaintiff attorney that we are sorry that their client was injured, but it’s not the fault of the club and therefore there is no negligence…Claim denied.|
|4.||Too eager to “settle”. How many times have you heard from your insurance company that it is cheaper to just settle a claim than to engage in a long legal battle? I, personally, would rather fight regardless of the litigation costs. However, I can also understand the insurance company’s reluctance to go to court. After all, the fate of the case is ultimately in the hands of a jury comprised of individuals who already have pre-conceived ideas of the health club industry and chances are that 90% of the jurors have never set foot in a health club. I think you can understand the reluctance on the part of the insurance company to go to court. Not to mention, juries have been known to award huge settlements for the most ridiculous claims. Does anyone remember the McDonald’s coffee spill incident? If an insurance company decides it is better to settle than to litigate, fine. Negotiate a settlement quickly or go to court. Too often insurance companies will allow a file to remain “open” for years. They forget the basic rule of claims management and business in general; time is money. The longer a claim remains open, the more it will cost. Reputation is everything to an insurance company. They should be responsive and fair with legitimate claims, and tough as hell on the rest.|
In closing, there are several factors that decide the ultimate outcome of any lawsuit; but perhaps the biggest factor of all is how we, as individuals, view what is proper and fair in our society. Keep in mind that our courts are nothing more than a reflection and custodian of our society. Thanks to the dramatic escalation of personal injury cases brought about by an eroding moral foundation that transfers the concept of accountability from the individual to someone else, and an insurance industry that lacks in basic customer service skills, our “system” of litigation in this country has become out of control. We all know who ultimately pays for the cost of this system.
So, maybe I’ll go out and slip on someone’s sidewalk, or chip a tooth on a water glass in a fancy restaurant, or go work out at a gym and strain a back muscle. After all, I could use the money.
Ken Reinig, SVP
Ken Reinig is Senior Vice President of Association Insurance Group, a Division of Thompson Insurance Enterprises, LLC.