The CEO of Sportscover has said that the insurance industry sometimes needs to “grow a backbone,” when it comes to the claims space.
In an exclusive interview with Insurance Business
, David Lamb gave several recent examples of “frivolous” claims and noted that the industry needs to take a stand before it is too late.
Lamb explained that his company are taking a stand against what he called the “bottom feeders in the legal fraternity,” who look to take advantage of ‘no win no fee’ legislation and believes that others in the industry could stand to do the same.
“I’d be quite happy to say that sometimes they need to grow a backbone,” Lamb said on the current stance of claims departments and insurers when it comes to dubious claims.
“One of the common complaints I get from clients is that insurers are more interested in the million dollar claims and they’ll just pay $30, $40, $50,000 to make the smaller ones go away and that’s real money to small businesses and we will take a stand on their behalf if we think the claim is rubbish.
“We will take a stand on behalf of the insured as well so I think the insurance industry could do with growing a backbone sometimes.
“We’ve taken the stance that if certain legal firms are involved or frivolous claims are involved we will take a stand and if that means we wear the legal costs involved ourselves then we will do that.
“If it’s an absolutely frivolous, rubbish claim then we will fight and defend it.”
Lamb gave several recent examples of claims that have come across his desk that required a closer look and he believes that others in the industry could follow suit but he stressed that any investigation must be balanced.
“These are examples of where, as an insurer, we have to hold our ground and where as an industry too often, we would pay $20, $30, $40, $50,000 in ‘go away money’ and the plaintiff law firms become aware of who pays easily and then the actual plaintiffs become involved and encouraged to do this,” Lamb continued.
“We have to balance this with compassion and we are proud of being very compassionate to genuine cases, often going beyond the insurance payout to help out the families and communities where we can.
“But we want to balance compassion with strength in standing up for clients and also on behalf of the brokers as well to make sure we actually pick the right ones and stand up to these unscrupulous tactics.”
Lamb noted that taking a hard-line approach to certain claims is not always easy, but it is vital to supporting small businesses and upholding the integrity of the industry.
“The problem is, if you pay a claim like this it can cripple a business either through insurance premiums or reputation so we have to put those things into consideration so yes, it is not always easy.
“We are happy to pay fair claims and treat them compassionately as long as people that are being fraudulent or exaggerating claims aren’t getting away with it because of they get away with it we all know that the rest of us has to pay.
“I think the average person on the street who is honest and wants fair insurance cover, would encourage insurers to identify those excessive and fraudulent claims and take a strong stand on those.”