Case studies

A forty-year Client of ICA was told by its property insurer that their coverage would not be renewed based on certain vaguely referenced “underwriting guidelines”. ICA stepped in and worked with both the Client and the insurer to come up with palatable, cost-effective solutions that would meet the needs of both sides. After working with ICA, the underwriter recognized the level of expertise and value of having an out-sourced risk management consultant on the side of their insured that also benefited the insurance company because of ICA’s role in improving the risk. They reversed their original position of nonrenewal and referred the renewal submission to its top management who decided to renew with that Client at a decreased price!

A well-known retail supplier faced suit by one of its competitors, for trademark infringement.
The adjudicating state court put into effect a cease and desist order, to prohibit the importer from continuing to sell any of its products within the entire state. Upon receipt of the Summons and Complaint, the Client forwarded the information to its insurance broker, requesting the broker to report the claim. In response, the Client’s insurance carrier denied coverage for the claim, citing an Intellectual Property exclusion as the reason for coverage denial. This exclusion as written included claims as a result of infringement of copyright, trademark, and trade dress. The Client reached out to ICA, and upon reviewing the correspondence of parties involved in procuring the Client’s coverage, discovered that the infringement allegation actually commenced 3 years earlier — a crucial fact as the underwriter had provided coverage for this exposure in earlier policy periods, whereby the applicable policy providing insurance coverage did not contain an Intellectual Property exclusion. ICA advised the Client to resubmit the claim to their underwriter, citing that the broader policy language should apply. By clearly communicating with the carrier and specifying the policy language applicable to this claim, the carrier agreed with ICA’s analysis and honored their provision for defense and coverage in favor of the insured. This analysis saved the Client close to a million dollars in defense costs and indemnity.
In ICA’s role as a consultant, the sole consideration is the Client’s interest and finding coverage wherever possible.

A long-standing Client had utilized ICA’s services to manage their property and casualty insurance program. Upon facing an astronomical health benefits cost increase in 2001, the Client reached out to ICA for help to address their coverage and cost management needs. ICA performed an assessment of the Client’s benefits program and made recommendations to the Client. Thereafter, through managing the competitive marketing process the resulting achievement on behalf of the Client yielded a premium reduction of $1.7 million, effecting a nearly 20% improvement to that Client’s bottom line for the Client’s new health plan.
This case study is not unique. In 2018, a new habitational Client in the Real Estate sector hired ICA for ongoing risk management services and saved approximately $3 million in their first year. All Clients can rest assured that any savings achieved on a Client’s behalf, are kept in full by the Client, as ICA does not work on a contingency basis and does not participate in the savings achieved for its Clients. ICA is hired to make recommendations to optimize insurance coverage wherever possible.

A Florida Landscaping Client sought ICA’s assistance in monitoring a large workers’ compensation claim. As the result of a work-related back injury, the employee needed surgery. Unfortunately, the hospital at issue had a roof leak, from water which seeped into the operating room. During the employee’s spinal surgery, he contracted a debilitating infection from the leak. The reserve on the claim was $1,000,000. ICA was successful in arguing the merits of the subrogation and having the reserve lowered to $300,000, passing along much of the liability to the Hospital. Upon settlement of the action, ICA made sure that the reserve was lowered to reflect the $150,000 settlement amount. We then notified the rating bureau for the Client to assure these figures were promptly and accurately submitted for a much improved experience modification calculation. Result – Significant savings over a three-year term of the modification.

One of our Clients manufactures leather goods for the automotive industry and often exports them overseas. When Mad Cow Disease reached US shores, with the report of a few incidents in Washington State, the Client’s shipments of hides to South Africa were in jeopardy of being rejected due to a recently enacted embargo of US bovine products to that country. The South African ban was to be temporarily in effect until the authorities were sure that the American beef and related products posed no danger for use in South Africa. The ban was put in place while the hides were in transit across the oceans, and if still in place at the time of arrival, the goods would be sent back, quarantined, or destroyed at the Client’s expense.

Even though the Ocean Transit coverage does not protect against trade disruption or embargo issues as written, a little knowledge goes a long way. ICA advised the Client that there are insurance policies called “Rejection Insurance” offered by none other than the Lloyd’s of London marketplace. Such policies can be written to protect their policyholders where its products are rejected for entry into the United States, or where US products are rejected from another country such as South Africa. So long as the products arrive otherwise certified as “fit” for their purpose, the insured is fully reimbursed when a governmental authority rejects goods for such reasons. This type of coverage is often purchased by seafood importers, and prices can run in the range of 3-5% of the value of the goods.

A commercial real estate owner had a slip and fall claim which took place on property that was the responsibility of the tenant to insure. The lease required the tenant to maintain the insurance and to indemnify and hold harmless the landlord for any claims arising on the leased property. Yet, when the claim occurred, the landlord was sued along with the tenant. When the landlord tried to have the tenant’s insurer take over the defense and indemnification of the claim against the landlord, the insurer pointed out its duty to defend and indemnify only applied to its own named insured, the tenant, as their insurance policy did not have the proper endorsements covering the interests of the landlord. Additionally, no indemnification would occur unless and until the insured was found actually liable for the loss. So, this landlord had to pay for their own defense and attorneys’ fees with the hopes that eventually it would be repaid by the tenant and/or its insurer.

As this property owner did not like the way this situation worked out, they contacted ICA, recommended by another real estate owner. After a complete audit of the landlord’s existing insurance program, in conjunction with their current leases, ICA found that the insurance the tenants were required to maintain was inadequate and did not properly name the landlord as additional insureds. The tenant’s insurance program also had severe limitations as to what rights applied to the landlord on any claims relating to the leased property. ICA also found that the landlord’s own insurance program offered no coverage for anything which was supposed to be insured by the tenant and it contained severe policy restrictions.

ICA pointed out to the Client that the certificates of insurance they were supposed to be seeking from the tenants were not providing the proper information, did not provide access to the tenant’s insurance protection, and that no one was checking the policies the tenants were maintaining. ICA developed a certificate of insurance program by drafting letters for use for each particular type of tenant or service provider, created a custom Certificate of Insurance form for this Client’s use, and educated their staff on how to manage and follow through on all the steps to get a truly protective certificate of insurance program in place. In consultation with the Client, ICA determined that the best way to move this project forward was by training the Client’s own in house staff to maintain the certificate program after its initial creation. The cost to them was minuscule when they compared it to what they have received as far as benefits in now having an organized, thorough Certificate of Insurance Program in place that protects the interests of the landlord. See our Design and Management of Certificate of Insurance Program Service.

An ICA Client, one of the nation’s largest Real Estate Investment Trusts, had sought ICA’s help clearing up claims information and confusion they had with the billing statements from their third party administrator. An audit was conducted at the TPA’s office of the claims’ files and serious flaws were found in the method of billing the Client. When a renewal policy from four years earlier changed the Self-Insured Retention Endorsement, no one at either the Client or the TPA, noticed that the TPA’s own fees were moved from “outside the retention” to “within the retention”. This effectively meant that for any claim that reached the retention level of a certain amount per claim, the TPA’s fees thereafter had to be paid not by the Client any longer, but should have begun to be paid directly by the insurance company. This Client owned numerous indoor malls and strip malls, and thus suffered from hundreds of slip and fall type claims every year. The number of claims reaching the retention level since the change in this policy form numbered about fifty, and thus for each of these claims the Client had been overbilled. ICA interceded on the Client’s behalf to convince the TPA that it must repay the amount overbilled on its own fees where they were paid both by the Client and by the insurance company for their fees. ICA also worked with both the Client and the TPA to prevent any future similar errors, to place a cap on the TPA’s future fees on a per claim basis, and to establish a line of communication with the insurer, the TPA, and the Client to work through any future billing questions. ICA’s claims audit service was adopted by the Client on a permanent basis going forward annually. See ICA’s Audit Service of Third-Party Administrators.

ICA was retained by a manufacturer of rectifiers and component parts who was sued for breach of warranty because one of their products allegedly never worked properly, causing the end purchaser to sustain a business loss. The Client believed that breach of warranty was not covered under a CGL policy so did not submit the complaint to the carrier. Six months and a lot of legal fees into the litigation, the Client finally submitted the claim, at which time it was denied because no covered cause of loss was alleged, as well as for late reporting. ICA successfully convinced the carrier that irrespective of the allegations of the complaint, investigation would prove at least part of the claim should be covered as products liability is not subject to the “impaired property” exclusion. Due to ICA’s help, the carrier provided defense and indemnity despite the late notice.

ICA has a long term Client which manufactures small household products such as hairdryers, toasters, and the like. This Client had been paying ever-increasing fees to its third party administrator and felt it was receiving poorer and poorer service at the same time. The Client mentioned this concern to ICA and it was agreed that the Client would select a sampling of five claims for ICA to audit at the TPA’s offices. ICA reviewed these files in-depth and reported on the numerous examples of overbilling, double billing, poor and mismanaged litigation, and recommended many potential areas of improvement. ICA pointed out that whenever the TPA received any document of any kind, even a one-page letter from an investigator, it incurred billable time to review it, then again to file it, then again to send it to local counsel, then again to report on it to the Client. Some of the overbilling practices were so egregious that ICA felt the Client should consider alternative TPA’s and/or National Counsel relationships the Client acquired.

ICA researched the feasible alternatives and invited numerous competing national counsel law firms specializing in products liability in this specific industry and TPA’s with more restrictive billing practices to present Proposals to the Client. ICA and the Client interviewed all potential parties and after much consideration, the Client agreed with ICA’s recommendation to replace its existing TPA arrangement with a law firm who could act as National Advisory Counsel, as well as local counsel on most claims throughout the United States. This new arrangement cut down significantly on redundant billing, assuring the adequacy and professionalism of local counsel, centralizing the chain of communication, and creating a document and research database which prevented countless billable hours of repetitive research and billing for legal memoranda on recurrent legal topics. Once the national counsel arrangement was arranged, ICA remained as a periodic auditor to assure similar overbilling or expansive litigation efforts were not repeated in the future. The Client was tremendously pleased with the change in the arrangement. Even though one would presume that a national counsel firm would be more expensive than a TPA, the streamlined process and prudence of the law firm’s managing partner have managed to lower the overall litigation costs to the Client, as well as raise the bar of products liability claims handling expertise and solidarity. This presents a strong message to other would-be claimants that this manufacturer will fight its claims with professionalism and prudence and is not an easy target for litigation.

ICA was retained by a chemical manufacturer in Pennsylvania. The Client was sued in Federal Court for damages allegedly resulting from the plaintiff’s prolonged exposure to a pesticide distributed under the Client’s label. Upon submission of the claim to the general liability carrier, coverage was denied based on a “pollution exclusion” in the relevant policy. ICA convinced the insurance company to provide coverage because the product liability coverage overrode the pollution exclusion and provided a carve back for coverage to the Client. Result: Full defense and indemnity.