An increasingly litigious culture means that laboratories are more likely to face claims on their professional indemnity insurance - and if the worst happens, here's what to do
A business lifeline or a necessary evil - whatever your view of insurance, there's no doubt that more and more testing laboratories are facing claims on their professional indemnity policies.
We're living in an increasingly litigious society, and customers are more aware than ever of their ability to seek redress through the courts for alleged professional negligence - or, perhaps more commonly, use this new tactic as a ploy to delay payment.
If the worse does happen and you are faced with a claim, you've got two choices - act immediately and manage the situation from day one, or stick your head in the sand and run the risk of turning a molehill into a very large mountain.
To help you manage the process right from the start, here are some top tips to follow.
1 Notify your broker immediately, whether or not you consider the potential claim to be groundless.
The sooner your broker is aware of and understands the situation, the sooner he or she can start working with you to present the claim to your insurer; the longer you leave it, the bigger the molehill will become.
2 Know what your policy covers: consult your broker - after all, he or she put it together on your behalf.
3 Start collating all the relevant information to prepare a notification to your insurer.
Your broker should help you with this, but some basics include the date on which you first became aware of the situation, details of the claimant, a description of the allegation or possible claim and a summary of events to date, copies of any relevant documentation and correspondence, and an indication of the potential amount involved.
4 Make sure you and your broker stay in constant contact.
Your broker should be fighting your corner with your insurer, so make sure he or she has access to all the necessary information and people - and make sure he or she keeps you up-to-date on progress.
And, just as importantly, here are a few tips on what not to do.
Don't admit liability.
Don't make any offers of settlement without consulting your broker and getting your insurer's consent. Don't take any other action that may prejudice your insurer's position.
Don't incur any legal expenses that you would wish to recover from your insurer without their authorisation.
Don't tell claimants that you are notifying your insurer - this could well lead to an immediate case of 'deep pocket syndrome'.
Managing a claim, or a potential claim, can be a nerve-wracking process, but following the above steps should help ease the situation.
Remember, first and foremost, use your broker.
He or she works for you and you alone - not the insurer.
Your broker should fight tooth and nail to ensure the best possible outcome for you - and if he or she doesn't, then maybe it's time to look for a new one?
