Tony DempsterHerbert Smith LLP, Partner

Claims Management

Claims Management

Introduction

EEWG: challenges presented by the new ELD regime

Purpose:

Enhance development of claims expertise needed to cope with challenges that ELD claims present

Initiate discussions with competent authorities to develop plans for co-operation: insurers will expect degree of control and influence in decision making process on remediation if expected to pay costs

Assist generally with the development of insurance products to provide effective cover for operators’ responsibilites under ELD

Claims Management

CEA Paper on Enhancing Sustainable Insurance Solutions : Claims Management (Section 5)

New claims management skills likely to be required:

Insurers wealth of experience in handling claims, including highly complex and technical claims

Involved at a very early stage taking control of claims under existing civil liability regimes covering ‘traditional damage’

Insurance industry less experience of the process under the rules of public/administrative law

ELD also introduces new liabilities and remedial measures of which key stakeholders involved (including the insurance industry) have very little experience

Insurers need to develop new expertise in handling claims associated with those liabilities

Claims Management

Matters to be considered:

Development of best practices for handling claims: benefit of environment but without excessive costWhat techniques exist to restore environmental damage in the most effective and cost efficient manner?Exercise by insurers of control of claims: development of effective working relationships with competent authorities

Claims Management

Call for close co-operation with the competent authority

Competent authority will either approve preventative or remedial action by responsible operator or require responsible operator to take necessary preventative or remedial measures

Insurers significant interest and wish to be involved in this decision process

Claims Management

Development of effective working relationships with the competent authorities to ensure insurers able to manage business properly and competent authorities comply with their responsibilities

More important in cases of cross-boarder damage involving more than one competent authority

Claims Management

Claims handling : questionnaire for steps to be taken

Claims handling determined by scope and limits of insurance policy:

Scope of cover vs. liability of insured operatorTypes of remediation coveredLimits/sub-limits including legal costsNotification requirements on insured operator under policy

Claims Management

Questionnaire: assessment of environmental damage and appropriate steps (Annex 7.4)

Underwriting assessment: useful data for claims management:

Business/activities of insuredEnvironment of the insured sites Emergency plans

Claims Management

Environmental damage/imminent threat

Type of activity : occupational/non-occupationalCausal linkFault/negligenceThird party?Initial assessment of environmental damage

Identification of applicable laws and competent authorities

Claims Management

What is possible by way of remediation?

Status report on measures initiatedSpecialists

Gathering of relevant loss information

Determination of environmental damageAssessment of significance of adverse effects/risk to human healthEstablishment of baseline condition

Identification and choice of remedial options

Monitor outcome of preventative and remedial measures

Claims Management

Future developments

Close collaboration between underwriters and claims managersCollaboration between insurers and competent authorities to enhance development of claims experience

THANK YOU FOR YOUR ATTENTION!

Brussels 13 February 2008

For more information www.cea.eu

CEA aisblSquare de Meeûs 29B-1000 Brussels