Evaluation of Damages
Large Claim Exposures
Dominion’s approach to evaluation of damages is based on solid in-house
insurance firm experience and is derived from multiple applications of historic
claim evaluations resulting in complete dismissal or environmental policy
buyback.
When a damage estimate is provided by the claims professional, we start the
evaluation process by breaking down the damage estimate into categories such as
pre-tender, defense vs. indemnity, owned property, voluntary payments, sudden
and accidental events, and cost of doing business. Throughout this process, as
necessary, we communicate with the claims professional and counsel to understand
those issues that are fundamental to their specific coverage on the claim. Based
on our review and discussions with the claims professional, we then revise the
damage estimate by systematically eliminating certain damages from consideration
according to the claim facts and specifics of coverage. We then review the
resulting damages based on industry standards for reasonableness and necessity,
a process that may result in additional revisions to the damage estimate.
Tantamount to this process is our review of corroborating information obtained
through regulatory agency file searches or telephone inquiries to bring
accountability to the process.
A range of scenarios and resulting reasonable-and-necessary damage estimates
may be provided to the claims professional as a foundation on which to base a
settlement or litigation position. Dominion provides accurate and defensible
damage evaluations and can assist counsel in allocating damages to the policies.
By performing a separate damage evaluation, Dominion is able to provide
technically accurate and defensible damage analysis on which to base exposure to
the policies. During our review of over 100 claims where damages exceeded $1
million, Dominion has documented actual site past-and-future estimated costs to
be as low as 5 percent of presented damages.
In addition, Dominion can assist the claims professional with allocation of
damages based on specific claim facts and the appropriate allocation scenario.
Dominion’s staff can also participate with the claims professional and counsel
at mediations or other settlement negotiations to further support the
negotiation process from the technical and scientific viewpoint. Dominion’s
participation in these conferences allows the settlement team to effectively
present the claim evaluation and demonstrate the completeness of the review.
Using this approach, Dominion has contributed to significant savings in
settlement dollars and provided a measure of confidence and assurance to
insurance company’s staff as they negotiate cost-effective and sound
settlements.
