INNOVATION January-February 2015

Insurance Claim Considerations – What Professionals Need to Know Benjamin Kent, Marsh Canada Limited i ns igh t

The new year brings the excitement of potential new professional opportunities ahead; however, with faster technology, more global competition and a trend towards litigation as a means to settling disputes, professional engineers and geoscientists are constantly finding themselves drawn into legal battles. For this reason, Marsh Canada, as an affinity partner to APEGBC and as a professional liability insurance advisor and broker available to all APEGBC members, wants to provide you with a guide as to what you should know if drawn into a lawsuit. Professional error and omissions insurance (commonly referred to as professional liability insurance) provides protection in the event of a claim. Accordingly, professionals need to know what constitutes a claim. The term is actually defined in the policy language and usually refers to the following: Claim: - Any demand for monetary or non-monetary relief; - A civil proceeding commenced by the service of a Notice of Action, Notice of application, Statement of claim, complaint or any other similar proceeding; - An arbitration proceeding. Many professional liability insurance policies also require insurance holders to notify the insurer when they first become aware of any circumstances which could give rise to a claim or wrongful act. For this reason it is very important to speak to your insurance broker about any circumstances that arise even if it is not likely to lead to a formal claim (some insurers even require notification when there is no claim). When a claim or circumstance that could give rise to a claim does occur, we recommend that insured professionals do the following: 1. Upon receipt of the either a “notice” letter or Statement of Claim, the professional should immediately contact their insurance broker (the same day if possible) so that their broker can report the claim to the appropriate insurer. 2. The professional should not contact the claimant or the claimant’s lawyer without first notifying the broker unless there is an urgent response required. If that is the case, the professional should simply tell the claimant or the lawyer they are reporting the claim to their insurer. 3. The professional should not assume or accept liability at this stage, regardless of the circumstances. 4. If being pressed by a claimant for an admission of fault or to pay for repairs, etc., the professional should inform the claimant that they have reported the matter to their insurer and, that once an adjuster or lawyer has been retained, that person will be responding on the professional’s behalf to the claimant. 5. The professional should assemble their project files and commence preparing a response/chronology of events to the allegations being made against the professional in order to

share with the adjuster or legal counsel that the insurer will be retaining to assist the professional. 6. Once an adjuster or lawyer has contacted the professional they will then arrange to discuss the matter, request the relevant project file and possibly meet with the professional to provide guidance on the claims handling process from that point forward. If you have any questions regarding what you should do in the event of a claim, or would like to learn more about Professional Liability please contact: Rob Selnes Vice President Marsh Canada Limited – Vancouver 604.443.3535 Rob.Selnes@Marsh.com This article is intended for informational purposes and does not constitute legal advice. v Benjamin Kent Client Executive Marsh Canada Limited – Vancouver 604.692.4838 Benjamin.Kent@Marsh.com

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