In this podcast, SCORE mentors chat with Peter Hedberg. Peter started his insurance career in 2003 at Hayes Company in the midwest. Peter handled management liability lines, and professional and privacy insurance. In 2013, he moved to New York and joined the underwriting side at Hiscox, a global specialty insurance company based in London. He currently manages new and renewal technology, professional, and privacy liability insurance for the Northeast Region of Hiscox.
How does a business owner's policy protect small business during an emergency?
I think it's really important to know there's a difference between an insurance emergency and in filing a claim. I think a lot of people think that if there is an emergency or something happening in the immediate that they have to call their insurance company. A classic example is say a home owner's policy where, let's say you had a storm that tore a hole in your roof or something like that, and people think, "Oh, I shouldn't touch that. The insurance company is going to want to take control of this whole thing," or, "I don't want to jeopardize my insurance somehow, so I'm just going to let the water keep pouring in." That's an emergency, and it's okay to take the necessary steps to protect yourself and the property in that case. Whether that be put a tarp up on your roof or something that prevents the water from continuing to come in, those are okay things to do. The insurance company wants you to take action so that you don't have further loss, obviously. It also wants you to take action to make sure that everyone stays safe. That includes dialing 911 if somebody's hurt or something is on fire, or something to that effect. Then, the claim filing process can begin once the crisis or the emergency is over.
I think it's important that people don't jeopardize further loss by worrying what the insurance company is going to do. Again, we bring that up because there is, there's a distinction between when you file a claim and when there's an emergency.
Peter, once I've solved the immediate crisis, what do I do?
Let's say you're in a position where you need an additional place to work, or an alternative place to work because where you typically work, and that could be out of your home if you're a small business, is unavailable to you. What you can do is when you get in touch, this is when you want to start filing the claim; this is when you want to start the claim process because that's when you're going to get an insurance adjuster who's going to recommend an alternative place to work, or make those arrangements, or even ask you if you have alternative arrangements and what the cost is going to be so that they can start directly reimbursing you for those additional costs to have an alternative place to work.
Peter, once the insurance adjuster has helped you get settled in, there could be all sorts of other things going on, lawsuits and who knows what. What do you do about those things?
That's a good question. There's a huge difference between when you have a property style emergency where you need an alternative place to work or there's a fire versus when you're actually staring at a lawsuit. I always joke, in the movies the always have these characters who deliver service of suit. They ask you your name, and you identify who you are and then all of a sudden they throw a lawsuit at you. It does work sometimes like that, but most of the time it just shows up in the mail when it comes to a business. You're staring at this lawsuit and I think a lot of people's first inclination is to call a lawyer and say, "Oh, what do I do? I've got to respond to this in a certain amount of time." Every lawsuit has a certain specified period of time that you have in which to respond. It is very important to file the claim and start that process as soon as you can because the adjuster is probably going to be the one that determines what lawyer that's going to be.
Now, if you have a personal attorney that you like and trust, that's okay to call them and consult, but they may not actually be used by the insurance, so you may bear that risk or that cost on our own.
I suspect a pretty good percent of the time it ends up being insurance company lawyer against insurance company lawyer.
It's certainly very possible; although, if you're being sued or somebody is bringing a plaintiff attorney action at you, usually those are plaintiff attorneys. In the world of lawyers, there's a really, really bold line that's drawn between who's the defense attorney and who's the plaintiff attorney. If you can imagine, the insurance companies don't often like to employ people who are plaintiff attorneys as defense attorneys, but when I was an insurance agent, I did, I had a very interesting experience where my insured was a construction firm, and one of their key people, overnight, took a bunch of equipment, and took a bunch of people, and started up an alternative company in another state. They bid it on the same job that his previous company was bidding on. It was a classic non-compete tortious interference claim. They decided to sue this guy who left over the weekend and took all their stuff and started an alternative company. Then he counterclaimed, and he claimed defamation and all these other things. All of a sudden the attorney they hired to go after this guy was also defending the company as well against these things.
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