Claims Adjuster Insurance Policy Information
Claims Adjuster Insurance. Whenever a private individual, commercial venture, non-profit organization, or public institution files an insurance claim, that claim is analyzed by a claims adjuster.
Adjusters evaluate policy contracts to verify coverage for a submitted insurance claim and determine the amount of payment, if any, is due to the claimant. Claims may be first-party property claims or third-party liability claims.
The adjuster may need to work with outside consultants, such as accident reconstruction specialists or fire inspectors. Adjusters are held to a high degree of professional care as the interests of both the insurer and the policyholder must be properly addressed.
Adjusters are required to be licensed in most states. Adjusters generally work for insurance companies but may offer their services independently to policyholders who prefer to work with a third party rather than their own insurer.
If work is done for the general public, the adjuster may assist the claimant in documenting the loss, and receives a percentage of the claim settlement. Adjusters may be generalists, or they may specialize in a particular line of insurance, such as property, liability, or workers compensation.
These professionals will carefully consider the merits of each claim by verifying the basic facts and assessing the value of the damage, among other things. As such, claims adjusters can be investigators working on behalf of insurance.
They can also, however, be hired by a policyholder, typically after the insured disagrees with the payment offered.
As such, claims adjusters may be employees, but they can also own and manage their own companies. Claims adjusters may be deeply familiar with the benefits and limitations of insurance coverage in a professional context, but they also - of course - need to protect their own ventures from the same major perils they are likely to encounter on a daily basis.
What kinds of claims adjuster insurance policies are most important for adjusters who are looking to safeguard their financial future?
Claims adjuster insurance protects your claim adjusting business from lawsuits with rates as low as $37/mo. Get a fast quote and your certificate of insurance now.
Below are some answers to commonly asked broom and brush manufacturing insurance questions:
- What Is Claims Adjuster Insurance?
- How Much Does Claims Adjuster Insurance Cost?
- Why Do Claims Adjusters Need Insurance?
- What Type Of Insurance Do Claims Adjusters Need?
- What Does Claims Adjuster Insurance Cover & Pay For?
What Is Claims Adjuster Insurance?
Claims adjuster insurance refers to insurance coverage for individuals or companies who work as claims adjusters. This type of insurance provides protection for claims adjusters in the event of a claim made against them for errors and omissions that occur while performing their duties.
The coverage typically includes legal expenses, settlement costs, and any damages awarded to the claimant. This insurance is important for claims adjusters because it helps protect them from financial losses and reputational damage that can occur from a claim made against them.
How Much Does Claims Adjuster Insurance Cost?
The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small broom and brush manufacturing businesses ranges from $57 to $79 per month based on location, size, revenue, claims history and more.
Why Do Claims Adjusters Need Insurance?
Licensed claims adjusters who work as contractors or run their own companies both have insurance needs that stretch beyond those of private individuals, as they face both risks that are universal to any commercial operation and professional hazards specific to this line of work.
The exact nature of the threats a claims adjuster should insure themselves against will depend on the scope of their activities, but the fact remains that any claims adjuster could fall victim to unforeseen, and disastrous, circumstances.
claims adjusters with a dedicated commercial venue could face acts of nature, thefts, acts of vandalism, or accidents that lead to extensive property damage or loss - like accidental fires. Vehicular accidents or car thefts in which sensitive client data are stolen are other examples of perils claims adjusters could encounter.
On the liability side of the equation, claims adjusters have to consider a spectrum of perilous scenarios. A claims adjuster or an employee of the company they own could inadvertently damage third party property, or a visitor to the premises could be injured due to neglectful maintenance. A client could accuse a claims adjuster of missing something in their assessment, or not carrying their professional duties out diligently.
Because any major peril that could befall your company may lead to either costly property loss or serious legal expenses, it is crucial to opt for the proper claims adjuster insurance, not only to meet your legal obligations but also to protect the future of your business.
What Type Of Insurance Do Claims Adjusters Need?
The types of coverage a claims adjuster will need to carry depend on factors like the jurisdiction where they are based, the exact nature of their work, and whether they have hired employees and possess office premises.
It is always important to talk to a reputable commercial insurance broker to evaluate your unique risk profile and needs, but among other kinds of claims adjuster insurance needed are:
- Commercial Property - Any business with significant physical assets - not only a physical building, owned or rented, but also smaller assets like computers, HVAC systems, and furniture - also requires commercial property insurance. While it will cover a significant portion of property loss or damage caused by circumstances beyond your control like theft, vandalism, and acts of nature, floods coverage is not usually provided and may therefore have to be purchased separately.
- Professional Liability - Anybody can make professional errors, but when a claims adjuster does so - or a client merely accuses them of negligence, even if no mistakes were made - massive legal expenses can follow. That is why errors and omissions insurance, or professional liability coverage, which covers legal expenses up to predefined limits, is the first claims adjuster insurance policy any adjusters should acquire.
- Commercial General Liability - Many claims adjusters will also require commercial general liability insurance to shield themselves against costs associated with third party bodily injury or property damage claims. This is especially important if clients visit your premises.
- Commercial Auto - Should you drive a professional vehicle, as will almost certainly be the case, commercial auto insurance is inescapable.
Claims adjusters who run companies that hire employees will further require workers' compensation insurance to guard themselves from costs and litigation if an employee were to suffer a work-related injury.
Cyber security insurance is another type of coverage that should be on your radar, as you will be the guardian of important electronic data. For full insights into your claims adjuster insurance options, always consult a commercial insurance broker.
Claims Adjuster's Risks & Exposures
Premises liability exposure is often very limited as most of the claimant contact is done over the phone, electronically or by mail. If claimants visit the premises, they must be confined to designated areas to prevent them from observing other clients' confidential information or overhearing private conversations.
To prevent slips, trips, or falls, all areas accessible to claimants should be well lighted with floor coverings in good condition. The number of exits must be sufficient and well marked, with backup lighting in case of power failure. Parking lots and sidewalks need to be in good repair with snow and ice removed, and generally level and free of exposure to slips and falls.
Off-site exposures are extensive as adjusters may spend a lot of time either at loss sites or at claimants' premises. There must be training and procedures for appropriate off-site behavior. Complaints about adjusters should be dealt with quickly.
Personal injury liability exposures include allegations of assault, breach of confidentiality, discrimination, and invasion of privacy.
Professional liability exposures arise from the adjuster's analysis of the information developed on any claim. Settlements are made based on statements made by the applicant's family members or employees and can involve millions of dollars.
Adjusters have legal responsibilities to both the insurer and the insured and are often party to sensitive negotiations. Hazards increase if the firm fails to conduct thorough background checks to verify employees' education, employment history, and licensing.
Workers compensation exposure is based on the type of losses adjusted and whether the adjuster works in the office or off-site. Since office work is done on computers, potential injuries include eyestrain, neck strain, carpal tunnel syndrome, and similar cumulative trauma injuries that can be addressed through ergonomically designed workstations.
Travel may be extensive. Exposures increase with off-site work as the adjuster may work in damaged buildings or under other compromised conditions. Adjusters may be injured by slips and falls, falling objects, respiratory ailments from inhaling dust or other allergens, foreign objects in the eye, hearing impairment from noise, assaults, or in vehicle or aviation accidents. Protective gear must be provided in certain circumstances.
Property exposure is generally limited to that of an office. Ignition sources include wiring, heating and air conditioning systems, wear, and overheating of equipment. There may be storage of client information in paper form, although these are now often digital instead of paper format.
Storage of paper documents should be in fireproof cabinets. Fire suppression systems must not damage the papers. Computers and other electronic equipment may be targets for theft. Occasionally, an adjuster will take a claimant's property for salvage.
Inland marine exposure is from accounts receivable if the adjuster offers credit, computers, special floaters, and valuable papers and records for claimants' and insurers' information. Adjusters do field work, which requires a variety of specialty equipment to do their evaluations.
The customers' papers on file may be originals that are difficult to re-create. A morale hazard may be indicated if the adjuster does not keep valuable papers and disks in fireproof file cabinets to protect them from smoke, water, and fire.
Power failure and power surges are potentially severe hazards. Duplicates should be kept off-site to allow for re-creation in the event of a loss.
Crime exposure is from employee dishonesty and various types of fraud to both insurers and claimants. The exposure can be quite serious as adjusters have access to individual customer's personal and proprietary information and have the authority to write drafts or checks on the insurer's account. Background checks should be conducted on all employees.
Hazards increase without monitoring procedures and securing all records to prevent unauthorized access. There must be a separation of duties between persons handling deposits and disbursements and reconciling bank statements.
Audits should be conducted at least annually. Collusion with claimants, repair shops, and medical staff is possible.
Business auto exposure will vary. Adjusters may use rental cars when loss sites are not local. If company vehicles are supplied for use, there should be written procedures in place regarding personal use by employees and their family members.
All drivers must have appropriate licenses and acceptable MVRs. Vehicles must be maintained and records kept in a central location.
What Does Claims Adjuster Insurance Cover & Pay For?
Claims adjusters can be sued for various reasons, often stemming from alleged negligence or misconduct in handling insurance claims. Here are some examples of why claims adjusters might be sued and how insurance can help protect them:
Bad faith claim handling: An adjuster may be sued if they are accused of intentionally delaying, underpaying, or denying a claim without a valid reason. Errors and Omissions (E&O) insurance, also known as Professional Liability Insurance, can help protect claims adjusters by covering the legal costs and potential settlements or judgments that may arise from such lawsuits.
Misrepresentation: If an adjuster is accused of providing incorrect information or making false statements to a claimant, they could be sued for misrepresentation. E&O insurance can help cover the legal fees, settlements, or judgments resulting from misrepresentation claims.
Breach of contract: Adjusters may be sued for allegedly failing to fulfill their obligations under an insurance policy or service contract. E&O insurance can help cover the costs associated with defending against breach of contract claims and any resulting settlements or judgments.
Negligent claim handling: If an adjuster is accused of failing to properly investigate a claim or making errors in their evaluation, they may be sued for negligence. E&O insurance can help protect adjusters by covering legal fees, settlements, and judgments arising from negligence claims.
Invasion of privacy: Adjusters may be sued if they are accused of improperly accessing, disclosing, or using a claimant's personal information. E&O insurance can help cover the legal costs and potential damages associated with invasion of privacy claims.
Defamation: If an adjuster makes false or damaging statements about a claimant, they could be sued for defamation. E&O insurance can help cover the costs of defending against defamation claims and any resulting settlements or judgments.
It is important for claims adjusters to have adequate E&O insurance coverage to protect themselves and their businesses against potential lawsuits. This insurance can help cover legal defense costs, settlements, and judgments, allowing adjusters to continue their work without the financial burden of a lawsuit.
Commercial Insurance And Business Industry Classification
- SIC CODE: 6411 Insurance Agents, Brokers, And Service
- NAICS CODE: 524291 Claims Adjusting
- Suggested Workers Compensation Code(s): 8803 Auditor, Accountant, or Computer System Designer or Programmer - Traveling, 8810 Clerical Office Employees NOC, 8742 Salespersons or Collectors - Outside
Description for 6411: Insurance Agents, Brokers And Services
Division H: Finance, Insurance, And Real Estate | Major Group 64: Insurance Agents, Brokers, And Service | Industry Group 641: Insurance Agents, Brokers, And Service
6411 Insurance Agents, Brokers, And Service: Agents primarily representing one or more insurance carriers, or brokers not representing any particular carriers primarily engaged as independent contractors in the sale or placement of insurance contracts with carriers, but not employees of the insurance carriers they represent. This industry also includes independent organizations concerned with insurance services.
- Fire Insurance Underwriters' Laboratories
- Fire loss appraisal
- Insurance adjusters
- Insurance advisory services
- Insurance agents
- Insurance brokers
- Insurance claim adjusters, not employed by insurance companies
- Insurance educational services
- Insurance information bureaus
- Insurance inspection and investigation services
- Insurance loss prevention services
- Insurance patrol services
- Insurance professional standards services
- Insurance reporting services
- Insurance research services
- Insurance services
- Life insurance agents
- Medical insurance claims, processing of: contract or fee basis
- Pension and retirement plan consultants
- Policy holders' consulting service
- Rate making organizations, insurance
Claims Adjuster Insurance - The Bottom Line
To learn more information about the kinds of claims adjuster insurance policies you'll need and what coverage limits you should have, consult with a reputable broker that is experienced in business insurance.
Additional Resources For Professional Services Insurance
Get informed about small business professional services insurance, including Professional liability, aka errors and omissions (E&O insurance), that protects your business against claims that a professional service you provided caused your client financial loss.
- Answering Service
- Armored Car
- Attorney Lawyer
- Background Music Services
- Business Consulting
- Chemical Engineers
- Civil Engineers
- Claims Adjuster
- Commercial Laundries
- Commodity Broker
- Corporate Wellness
- Court Reporter
- Credit Bureaus
- Debt Collection Agency
- Detective Agency
- Diaper Services
- Electrical Engineering
- Environmental Consultant
- Executive, Career & Life Coaching
- Executive Search Firm
- Expert Witness
- Financial Planner
- Financial Services
- Funeral Directors
- HR Consultant
- Inspection Bureaus
- Insurance Agents & Brokers Insurance
- Mediator - Arbitrator
- Medical Billing
- Music, Drama & Dance Therapy
- Office Machine Repair & Maintenance
- Piano Tuners
- Project Management
- Safety Consultants
- Speakers Bureaus
- Tax Preparer
- Temporary Staffing
- Title Abstractors
- Valet Parking
- Specialty Consultants
- Specialty Service Business
The professional services industry, which includes occupations such as lawyers, doctors, accountants, and architects, often deals with sensitive and complex issues that carry a high risk of liability. These professionals are expected to provide their clients with expert advice and guidance, and any mistakes or oversights can result in significant financial consequences for both the client and the professional. This is where insurance comes into play.
Business insurance provides protection against the financial repercussions of potential mistakes or accidents that may occur while providing professional services. For example, a lawyer may make an error in their legal representation that leads to a financial loss for their client. Without insurance, the lawyer would be personally responsible for covering the cost of this loss. Insurance helps to protect professionals from these types of financial burdens and allows them to focus on providing high-quality services to their clients.
In addition to protecting against financial losses, commercial insurance can also provide legal defense for professionals facing legal action as a result of their work. This can be especially important for professionals in high-stress or high-risk fields, such as doctors or architects, who may be at a higher risk of being sued for professional negligence.
Overall, the professional services industry needs insurance to protect against financial losses and legal action, ensuring that professionals can continue to provide high-quality services to their clients without the added stress and burden of potential financial consequences.
Minimum recommended small business insurance coverage: Business Personal Property, Employee Dishonesty, Accounts Receivable, Computers, Valuable Papers and Records, General Liability, Employee Benefits Liability, Professional Liability, Umbrella Liability, Hired and Non-owned Auto Liability & Workers Compensation.
Other commercial insurance policies to consider: Building, Business Income with Extra Expense, Earthquake, Equipment Breakdown, Flood, Computer Fraud, Forgery, Money and Securities, Special Floater, Cyber Liability, Employment-related Practices Liability, Business Auto Liability and Physical Damage and Stop Gap Liability.