Watch out for bad faith, adjusters warned at OIAA conference

When it comes to bad faith, adjusters need to remember that the importance is not on being right, but on treating the insured humanely, according to Stephen Scullion of Crawford Adjusters.Also, adjusters should rely on detailed investigations as opposed to suspicions, said Scully, a panelist at a seminar held at an Ontario Insurance Adjusters’ Association conference in Toronto.”You can be right, pay a claim, and still be considered in bad faith,” Scullion said. He further advised that the key to avoiding an accusation of bad faith “is to have fairness and promptness exude from every document” in an insured’s file.Scallion warned that bad faith accusations would likely emerge from a document in a claimant’s file most likely a piece of correspondence. While documents are commonly exchanged during the discovery period preceding a civil suit, there are ways in which an insurer can keep the plaintiff from obtaining a file or a portion of a file, Scullion advised.Files can be kept from the plaintiff lawyer if: It can be shown that the documents are not relevant to the issue at hand; The insurer claims solicitor-client privilege; or The insurer claims litigation privilege.In order to apply for litigation privilege, Scullion said, certain things must occur. They are: An adjuster denies a claim due to a policy breach; An expert report shows that the fire loss was caused by a faulty electrical system; A plaintiff threatens to commence an action against the insurer; A plaintiff applies to FSCO for mediation; or An insurer retains counsel to handle a dispute with an insured.Scullion ended the seminar by reminding the crowd that they are in the business of indemnifying, not denying. “Express what you are doing [to the insured] and why in a humane fashion that is good faith,” he said. “Get rid of red flags, they are only suspicions.”