Very often an insurance carrier or self-insured may not have the resources to develop a top-notch internal subrogation team and thus outsources the recovery process to a vendor specializing in subrogation recoveries. In other instances the subrogation vendor acts in the capacity of support to an internal subrogation team by handling overflow or providing special services such as Forensic File Reviews or Arbitration Management Services. Regardless of the reason, a partnership between a subrogation vendor and an insurance carrier or self-insured entity is formed with the purpose of asserting recovery claims against the responsible party(s) that caused the loss. These partnerships are frequently formed with a contingency fee structure, aligning the financial objectives of the insurer with the vendor.
Here are five practices an insurer can implement to maximize the relationship with their subrogation services partner and secure the best results:
- Preserve the evidence – very often claims professionals, in an attempt to resolve claims expeditiously, will permit evidence to be removed from the scene or otherwise mishandled. This makes it nearly impossible for the recovery vendor to establish the chain of custody of the evidence or make arrangements for a proper inspection. Work with the recovery vendor to establish an appropriate protocol for the preservation of evidence.
- Complete the claims investigation - take steps early in the investigation process to properly identify all parties of interest, including witnesses. Obtaining relevant statements early will avoid not being able to locate a party of interest when needed.
- Early engagement–all too often a great recovery opportunity is lost due the expiration of the statute of limitations or failure to provide timely notice of the intent to make a claim against a municipality or government entity. Engage the subro vendor early in the claims process so as to allow time to review the facts, identify the proper parties and develop a theory of liability.
- Communicate - like all strong partnerships, good communication between the subrogation vendor and claims staff is essential to the success of a recovery program. Sharing company goals and objectives will provide the recovery vendor with a clear understanding of company expectations.
- Measure the results – your subrogation partner should be providing you with routine reports detailing their results and status of open cases. You should have real-time access to their recovery platform so you can view the status of claims being handled on your behalf.