December 1, 2015

The A.E.R. Approach To Insurance Recovery Law: Best Practices for Resolving Insurance Claims

There are many ways to effectively resolve corporate insurance claims.  But, litigation is seldom the best option.   To avoid what we call the “litigation trap,” it helps to understand some historical bias.  In the early 1990’s, it was common practice for policyholder lawyers to shoot first and ask questions later.  Then, policyholders were filing suit after suit to resolve environmental and asbestos insurance claims, oftentimes doing so before the facts or applicable law was fully investigated.  These suits cost policyholders millions of dollars to prosecute and it was not uncommon for policyholder law firms to have ten or more lawyers on any given case.  One could argue that an all-out insurance industry assault was necessary to force insurers to pay, but one could also argue that considerable amounts were unnecessarily spent by policyholders to resolve their claims. 

Insurance Recovery Law Firm

Unfortunately, this history still shapes the way policyholders prosecute claims.  Old habits die hard.  Many insurance recovery lawyers still instinctively follow simple strategies learned as young lawyers, namely, to file a lawsuit first, and work out the details later.  This unsophisticated strategy seldom works anymore.  

At Miller Friel, we follow a different, more disciplined, approach.  We typically follow a three phased approach, starting with Analysis of the issues, followed by Engagement of the insurers,  and ending with Resolution of the claim.  In this video Founding Name Partner Mark Miller explains the benefits of following this three phased approach to claims resolution.   

Here’s a short primer on why these three phases to claims resolution work so well.  


This phase is the most important phase we undertake as it sets the tone for everything that follows.  Before even thinking about engaging an insurance carrier, important work needs to be done.  Facts need to be investigated.  Policy language needs to be analyzed and understood.  And, case law needs to be researched and applied.  At this stage, clients are often surprised to learn that the law strongly supports their claim, despite the fact that they were previously advised by their insurance broker that the claim was not covered.  The reason for this is that insurance industry custom and practice (which is familiar to brokers) does not control the outcome of a claim.  Rather, coverage is based on policy language and case law interpreting that language.  The end result of this phase is the development of a comprehensive strategy to resolve the claim that incorporates the strengths of the entire team, including brokers (for their insurance industry knowledge and contacts), client representatives (for their knowledge of facts and assistance with strategy and settlement targets), and insurance recovery lawyers (for their knowledge of the law and legal process that can be used to resolve difficult claims). 

Mark Miller


Only after the case is fully understood, and the team has been fully assembled, should the insurance carrier be contacted.  During the Engagement phase, we begin our first conversations with the applicable insurance carriers. Typically, the insurer has already denied the claim, and they need a detailed explanation as to why their denial was improper.  Here, we typically send a well drafted analysis to the insurance carriers explaining our client’s right to coverage.  This helps the insurance carrier understand why the claim is covered.  This correspondence also serves as an outline for future discussions.  At this point both the policyholder and the insurance company understand each of their respective positions, and can more accurately assess how they want to proceed.  Insurance carriers that deny claims hope that their denial letters will be the end of the road, but fully expect that their denials will be challenged.  And if challenged, insurers appreciate the kind of careful analysis we provide.  If the Analysis phase sets the stage, the Engagement phase casts the actors into their best and most useful roles. 


The goal of the resolution phase is, of course, to persuade the final decision makers at the insurance company that the policy does, in fact, cover the losses for which we are seeking coverage.  Insurance brokers are often instrumental to help identify decision makers.  Many times, claims are resolved through discussion without any additional legal process.  Other times, for strategic reasons, it is decided that the claim would benefit from formal mediation, or in some cases confidential arbitration.  The direction we take depends very much on the willingness of the carrier to take a reasonable stance on coverage.  Some carriers are more difficult than others, but, with everyone on the insurance recovery team working towards the same goals, litigation can often be avoided. 

As insurance recovery law specialists, this is all that we do.  Our role is to guide corporate clients through the process and help them with decision-making.  There is no one size fits all solution to any claim.  Some claims have statutes of limitations requiring the initiation of litigation.  Others suffer from inadequate communications between policyholders and insurers, which can often be resolved through mediation.  With the right insurer, mediation can be incredibly successful, but only if you know how to convince an insurer of the merits of your position. With recalcitrant insurers, arbitration or litigation may prove beneficial, but litigation, when warranted, should be used strategically as a tool to create value. 

Following this A.E.R. approach, we have successfully recovered well over $4 billion for our corporate policyholder clients. This approach to resolving claims is one of the reason that corporate clients turn to Miller Friel to help them resolve their most difficult and complex insurance claims.  Our experience in the field, our sole focus on this very specialized area of law, and our outstanding record of success is unique in the industry.  To learn more about each of these values, please take a moment to read:


Insurance Recovery Specialists – Experience Matters


Our Sole Focus On Insurance Recovery Law Leads To Greater Efficiency


Insurance Recovery Law Firm with 100% Record of Success

To read the transcript of today’s video, please continue:

How do we start the process of evaluating a client’s claim?

What do we do when we get a call from a client to start the process of evaluating a claim? Most of what we do is evaluating and prosecuting insurance claims. So there’s common wisdom that we follow – follow a phased approach. The first phase is that you investigate. You understand and you research the law. So you take the policies, you research the law, you’ll take the notice letters and the insurance company’s letters and you understand legally and factually everything about the claim. And from that you put together a strategy. What’s the best thing to do? Go away and drop it? Usually not. Follow forward with it? If so, do you negotiate? Do you sue? What do you do? Most typically, you follow that with phase two.

Phase two is not suing, it’s engaging the insurance company. So what you do is engage the insurance company, send them a letter which basically tells him why it’s covered. That gives them something to give to their boss and there boss’ boss to convince them why they should pay $5, $10, $15, or $20 million. It’s not that simple usually but you have to start with that process to engage the insurance company. You’ll go back-and-forth and sort of reach some sort of agreement on what’s covered and what’s not covered. And then you move to phase 3.

Phase three is where you resolve the claim. There are a lot of ways to do that. One is you can sue. Two is you can move it to mediation. Three is you just have a meeting. You sit down with their insurance company people, sit down with your client, and say look we’re all going to spend X number of million dollars trying to figure this out and the claim is only worth X number of million dollars. Why don’t we just figure out a way to solve this ? That often works but it doesn’t always work. But the three phased approach is something that we try to follow but it’s all contingent on phase 1 and that is what’s the best strategy.

Sometimes the best strategy is to file a lawsuit. And we’re not afraid to do that.  There are times and you can tell, and you know from our experience that the insurance company is not going to roll over, and they are not going to pay it. It may be a touch issue that the insurance company has, that they don’t pay X or they don’t pay Y and you know that you’ll have to do a little bit more pushing to get it done.

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