How claims advocacy keeps you ahead of the litigation curve
Insurance companies have seen a magnified risk of litigation against them, in part because they are becoming exposed to higher regulatory standards of care towards clients and society at large. Thoughtful claims advocacy for clients helps to cut down that risk, says a Canadian P&C insurance industry exec.
Kate Della Mora is the CEO of CFC Canada’s new national office in Canada. Based out of the U.K., the specialist managing general agent (MGA) announced the launch of its Canadian office this spring. And local claims advocacy is part of the plan.
“The top priority eventually will be to really focus on the claims presence and advocacy for claims locally,” Della Mora tells Canadian Underwriter. “We do have a [claims] advocacy group. [They’re] almost like a relationship manager when it comes to the claim. They’re not necessarily the person doing all the background technical stuff, and really getting into the nitty-gritty, but it’s somebody who’s able to set [the client’s] mind at ease.”
Litigation trends in Canada tend to follow closely those seen in the U.S., from cyber tracking litigation, lawsuits challenging a company’s Environmental Social and Governance policies, and PFAS litigation (e.g. lawsuits challenging the safety of human-made substances), to name a few.
Canada’s P&C insurance industry is held to a high level of prudence by the courts, Della Mora explains. “The standard of care continues to evolve for professionals and companies, and we’re being held to a higher standard than maybe we were in the past.”
Plus, Canadians are getting more litigious, according to a Zensurance survey, which found 70% of Canadian small businesses reported dealing with at least one legal dispute over the past three years.
“Exposures have been changing and evolving very rapidly and, with D&O, E&O and cyber, litigation changes almost daily,” Della Mora says.
That’s why it’s important for carriers to leverage data and discover business insights that help shape proactive responses to emerging trends.
“The specialty markets [do] a really, really good job of digging into the analytics and the data at hand,” Della Mora says. “We [can] track those trends proactively, so that we can be aware of what our clients are going to need going forward.”
And when clients must defend a claim, all parties involved must work to mitigate further losses and understand the client’s risk philosophy moving forward.
“There’s a lot of value in sophisticated buyers that know…how [they want] to protect their own businesses, and then it’s our job to exceed those expectations,” says Della Mora. “We want to make sure that there’s also that touchpoint, that relationship; that somebody will keep the client and the broker up-to-date on what’s going on.”
Where clients’ cyber concerns lie
Organizations are becoming increasingly concerned about business interruption that could result from a cyber breach event, Della Mora says.
For cyber specifically, 40% of organizations saw their cybersecurity dispute exposure grow in 2023 — more than any other area, according to a Norton Rose Fulbright litigation survey.
Cybersecurity, data protection, and data privacy also top the list of organizations’ litigation concerns.
“It’s their business under attack,” Della Mora says. “So I think we have to be very cognizant of ensuring that we are sensitive to that; that we are keeping them updated, that we provide that peace of mind that it’s being dealt with.”
Peace of mind for the consumer is the standard for all claims. But “it’s imperative for cyber specifically, just because it is such a precarious state to be in when something has happened,” she adds.
Feature image by iStock.com/Paperkites
