Excavating Proof: How Insurance Archaeology Plays an Important Role in Mass Tort Claims Success
Any organization faced with a mass tort claim should consider insurance archaeology as part of its defense strategy. It is a vital tactic in unlocking an asset in order to obtain insurance recovery and reimbursement. Without insurance archaeology, defendants may struggle to manage a mass tort claim cost-effectively leaving them exposed to significant financial impact. This is especially true for a legacy claim that surrounds an issue or event that took place decades ago or over multiple years. For instance, events such as asbestos exposure, environmental contamination, talc-related cancer, sexual misconduct, and sports concussions commonly occurred over decades and can date back to the 1960s or 1970s.
Insurance archaeology helps offset indemnity and defense fees
Fees can mount really quickly in mass tort claims, and often, organizations with a distant or no direct relation to an event, find themselves facing a claim. Nowhere has that been more evident than in mass tort cases of asbestos that have typified the ‘sue first and get facts later’ approach. Plaintiffs routinely over-name defendants, naming 65 on average in asbestos lawsuits. Defendant organizations that are unable to locate evidence of applicable insurance coverage – from existing or expired coverages – must absorb defense fees and other fees that can climb into the millions of dollars.
Certain courts are now requiring evidence to support each mass tort claim against each defendant – an encouraging step toward tort reform. Yet, many defendants still find themselves mired in cases that have applied the over-naming approach. Small and mid-sized defendant organizations find the situation particularly frustrating, especially when they are named alongside industry behemoths with deep pockets that are legally and fiscally prepared to address these claims.
Insurance archaeology removes the insurance coverage mystery
A highly experienced insurance archaeologist follows a proven and effective approach to locate and access historic insurance policies. Without it, many defendants fail to account for assets which they already purchased and paid for years ago. This happens for many reasons, such as changes in company ownership, mergers or acquisitions, or the exit of key people from the company with institutional knowledge. An insurance archaeology team with the expertise, resources and insurance industry relationships can conduct a comprehensive, disciplined search via multiple channels domestically and abroad to locate potential coverage for a client.
Engaging insurance archaeology firms also reduces the client’s cost of risk in that the rates to locate coverage are often a fraction of lawyers’ hourly rates to research historic insurance. Skilled archaeologists are accustomed to working in a world of secondary evidence – receipts, cancelled checks, board meeting minutes, etc. – to demonstrate evidence of actual insurance policies. The aforementioned disciplined and effective approach produces quicker and better results.
Insurance archaeology provides value beyond locating coverage
Arcina has differentiated itself over the years by assisting clients beyond locating their historic insurance coverage. The act of locating insurance alone is often just the tip of the coverage iceberg, as clients need to understand how the coverage can be applied to their specific mass tort claim case.
To bring clarity, Arcina provides clients with an overview of their historical insurance assets via a multi-layered chart of the coverage history. It clarifies the terms of each coverage policy, the limits, the solvency status and past impairments. Such a cumulative snapshot of historical insurance coverage helps to quantify the assets and model the best course of action to recover any monies due to the insured. This gives defendants the confidence to pursue a claims strategy and peace of mind to optimally manage their risk related to future legacy mass tort claims.
Beyond insurance archaeology, Arcina has developed a well-defined process to “perfect the claim” which makes it easy for clients to maintain confidence throughout the claim’s lifecycle. Close collaboration with the insurance carrier and legal counsel enables a non-adversarial approach further reducing the cost of risk and increasing the probability of a positive outcome.