The Role of An Insurance Broker: To Keep Lawyers from Giving Advice?
In today’s blog post, Mark Miller addresses another issue pertaining to the role of insurance broker claims advocates, namely a misperception that some brokers have about the best way to maximize insurance claim value. Here, Mark addresses a recent visit with a prominent insurance broker seeking referrals from Miller Friel. During that visit, the brokers proudly touted marketing materials about everything they had to offer. One of the ways this broker thought they were creating value, was by preventing lawyers from providing advice regarding the scope of insurance coverage. This prompted us to think about some of the most successful insurance recoveries we have had for corporate clients and how best to use insurance brokers in the process.
Does a Divided Approach Make Sense?
On one hand, what the broker is saying makes some sense. This broker was really touting its ability to help policyholders settle claims as insurance broker claims advocates. Helping policyholders settle insurance claims is an important function of brokers. Brokers know the right people at the insurance companies, and in many instances, they help settle claims. It only makes sense to leverage contacts.
On the other hand, what this broker is saying is completely foolish. Brokers know a lot of things. They know what insurance companies have paid on claims in the past. Brokers know how insurance companies handle claims. And, oftentimes, brokers know what insurance companies might be willing to pay. But, all of this has nothing to do with what is covered under the insurance policies. Insurance policy coverage is purely a legal issue that has nothing to do with insurance company custom and practice, or what an insurance company is happy to pay to settle a claim. Insurance coverage is controlled by the law, and despite what insurance brokers do, most don’t practice law all that well.
The Role of Insurance Broker Claims Advocates and Lawyers
So, what is an insurance broker claims advocate and what is their role? Lawyers use the word advocate quite seriously, recognizing their obligation to zealously advocate. Insurance brokers use the word more as a marketing phrase, to illustrate that they are helpful in the process of settling claims. What insurance broker claims advocates do is more akin to a lobbyist than an advocate. Insurance broker claims advocates work with insurance companies to see if they can find common ground on a claim. They leverage their contacts to get meetings with insurers. Like a lobbyist, they provide access and contacts. They don’t, however, advocate for coverage in the way that insurance coverage lawyers are bound to do for their clients.
In working with insurance brokers to settle some of the largest insurance claims in the country, we have found that there is a better way. Brokers and lawyers are a team, not advocates against one another. Each has a different but equally important function. Lawyers determine what is covered based on the law and develop strategies to pressure the insurance carrier to pay. This may include submission of legal analysis to the insurer to help them reverse their position on coverage, or it may include other dispute resolution mechanisms. Brokers keep communications open with the insurer, and search for common ground. Together, the whole is much greater than the sum of its parts.
Please watch the video to learn more, or Contact us if you have any questions.