1. Have a Plan in Place to Respond to and Adequately Document Alleged Claims. The ability of your insurance company, risk management, and counsel to adequately investigate and respond to an alleged claim is dependent upon them getting accurate and complete information about the claim in a timely matter. An operator’s ability to ensure this information transfer happens is to have a plan in place to properly respond to events giving rise to potential claims, which are known throughout the organization and are consistently applied.
2. Have a Risk Management Department. An operator should have a person or persons dedicated to risk management activities, which would include responding to claims. All too often, many operators don’t have a formal risk management program in place. This can spell disaster when a claim with potentially large exposure arises. Evidence goes missing, witnesses disappear, and the defense of the claim falls apart. Don’t let that happen – have a trained staff in place to deal with risk management issues.
3. Promptly Notify Your Risk Management/Insurance Carrier of Known Claims. Give yourself and a chance when claims arise – notify your risk management and/or insurance carrier ASAP when an event occurs, which could translate into a claim. More often than not, the insurability of a claim hinges on timely notice of the claim. Don’t prejudice yourself by needlessly holding onto information about a potential claim. Further, the sooner risk management and the carrier know about a claim, the quicker they can investigate the matter and determine issues pertaining to liability and exposure.
4. Send All Evidence and Other Important Documentation to Your Risk Manager/Insurance Carrier ASAP. Events giving rise to potential claim generally trigger the creation of various materials such as incident reports, contemporaneous notes taken by employees, videos, and photographs. If you’ve generated these materials, promptly send them to your risk management and/or insurance carrier. There is little that is worse for an attorney defending a claim when it is revealed late in the litigation that evidence exists, which has never been produced by the operator.
5. You’ve Got Video? Preserve it! Claims can frequently be resolved quickly, easily, and cheaply if video surveillance of an alleged event that is favorable to be operator can be produced to the claimant or his/her counsel. Further, savvy plaintiff’s attorneys know that many businesses have video surveillance. Avoid problems in discovery in a subsequent lawsuit by being able to produce whatever video may in your possession.
6. Got Witnesses? Get Their Info! The statute of limitations in personal injury claims can run for many years. Memories fade and information gets misplaced. In the event of an incident, which could result in a claim, indentify pertinent witnesses and get contact information as well as a general idea of what they observed/heard. Consult with competent counsel to determine the appropriateness of getting written witness statements because these documents are often discoverable in litigation.
7. Stick to the Basics in Incident Reports. In most jurisdictions, incident reports are discoverable in litigation. Unless these reports are being created by an attorney or at his/her direction under the work product doctrine, generally limit reporting to names, addresses, telephone numbers, and a general description of the alleged event – as reported by the claimant. Keep ancillary matters, such as commentary about how the alleged event could have been avoided, out of the document.
8. Have a Lawyer Who Knows What He or She is Doing. The days of the general practitioner are by and large gone. Relying on the attorney who drew up your incorporation papers to advise and defend you in a complex personal injury lawsuit is typically an unwise proposition. Develop a relationship with a local attorney in tune with hospitality-related litigation who you can turn to in the event of a claim that develops into a lawsuit.
9. Tell Your Insurer You Want Your Attorney to Defend You in a Lawsuit. Many – if not most – retailers and hospitality-related entities have a fairly sizeable deductible or self-insured retention on their general liability claims. This circumstance generally enables the operator to exert some control over the selection of counsel in the event of litigation. If you have a relationship with an attorney you trust, tell the carrier of this relationship along with the request/directive that your counsel be hired to defend the suit to resolution. More often than not, the carrier will comply with this request/directive.
10. Don’t Let Preconceived Notions About a Claim/Claimant Prejudice Your Defense of It. It is true that many claims made against operators have dubious aspects to them. However, once a claim falls into suit, the rules of discovery apply. This means that however doubtful you think the claim is, you nevertheless have the duty to answer requests posed to you accurately, completely, and in a timely manner. Don’t give a plaintiff’s attorney the ability to allege discovery abuse to the judge because your preconceived notions about the claim clouded your responsibility to participate properly in the litigation. Avoid creating ancillary issues in litigation – they just get you into trouble.