• As an independent claims adjuster, you can be sued by the person or entity for which you are adjusting the claim AS WELL as the insurance carrier for which you are providing the adjusting services. Contrary to popular belief, the insurance carrier for which you are providing services may NOT defend you in the event of a claim.
• An increase in natural disasters means an increase in claims that will need adjusting. The greater your caseload, the more likely you are to incur a professional liability claim.
• Besides allegations of mishandling a claim, there is a very serious risk of bodily injury arising out of your profession

Claim Examples
EXAMPLE: BCD Insurance, a writer of homeowners insurance, hires Bob as an independent claims adjuster. Bob is entrusted with $5,000 in settlement authority. One day, Bob is called to a house which has had its roof damaged by a hail storm. After inspecting the damaged roof, Bob offers $15,000 to settle the claim. BCD sues Bob for exceeding his settlement authority.

EXAMPLE: Ralph is an independent claims adjuster hired by FGH Insurance, a writer of personal auto insurance. Mike drives a very rare antique car. He is involved in an accident and ends up hitting a utility pole, leaving the front end dented and fluid leaking from the radiator. When Ralph inspects the car, he does not notice the damage to the radiator and offers $15,000 to settle the claim. When Mike gets the bill from the mechanic, he finds that the bill is much more expensive than originally thought, since parts for the model of his car are extremely hard to find. It will cost $30,000 to fix both the front end and the radiator. Mike is unaware that Ralph is not an employee of FGH, so he sues FGH Insurance for $30,000 for underestimating the cost to fix his car. FGH Insurance then turns around and sues Ralph for $30,000.

EXAMPLE: Firefighters are called to the scene of a massive four-alarm blaze and find Sam's house on fire. They fight the fire for hours and seem to have it under control when it flares up again. When they are finally able to put out the fire, the house is completely devastated. Sam contacts his insurance company, and they send Todd to adjust the claim. When Sam gets the estimate for the damages and discovers it only covers one fire, he sues his insurance agent, his insurance company, and Todd. Sam believes that there were actually two fires, and therefore there should be two applicable limits.Although Todd is eventually found not liable for the damages to Sam, he still spends $20,000 to defend himself in the suit.

EXAMPLE: Steven adjusts a total loss of Tommy's car for XYZ Insurance, a writer of personal auto insurance. Steven doesn't notice on the car's registration that ABC Auto is the lien holder on the car. He recommends that XYZ pay $3,000 to cover the loss of the vehicle to Tommy, the owner of the car. Once Tommy receives the check, he goes out and spends it on another car. When XYZ learns they gave the money to Tommy in error, they write a $3,000 check to ABC for the loss of the car. XYZ sues Steven for the $3,000 they paid to Tommy for failing to confirm whether there was a lien holder on the car.

EXAMPLE: Ralph's Bakery is completely destroyed by a fire. He calls his GHI Insurance, which dispatches Don to adjust the claim. Unfortunately, Don is ill and is not able to make it to the scene for 10 days. When he is finally able to adjust the claim, it takes another 30 days for the insurance company to process the payment. Ralph's Bakery loses $150,000 in lost income during this time period. They sue GHI Insurance for the amount of income lost due to the delay in processing the claim. GHI then sues Don for not adjusting the claim in a timely manner.

back to top