“YOU HAVE BEEN SUED” reads the piece of paper some otherwise friendly-looking process-server has just handed you. Or perhaps you received a letter from an insurance company claiming you have caused damages and demanding payment in lieu of the lawsuit it intends to file against you. Or maybe one of your clients just called to complain that his house burned down two days ago and the alarm system did not work. What should you do? Hint: as tempting as it may be, the answer is not to go about your business as if nothing happened.
There are some important first steps you should take to investigate the loss that will help you prepare your defense of a claim or lawsuit against you. The very first one is to notify your insurance carrier! After that, you will want to inspect the scene of the loss–i.e., the customer’s home or business.
Here is what you should set out to accomplish at the scene inspection.
At the scene inspection, gather as much information as you can about the loss. You never know what information is going to be relevant in the course of the claim or litigation, and you often get only one chance to look at the scene before repairs are made, so it is best to err on the side of gathering too much information, rather than too little. Go to the news reporter’s toolbox and try to get answers to the who, what, when, where, and why of the loss.
Who experienced the loss? This question may have an easy answer, but sometimes there are nuances. For example, some losses are experienced by multiple parties, including renters, owners, business partners, or guests. It is important to figure this out early so you know if other claims or suits are likely to come from the loss.
Who else could bear some responsibility for the loss? For example, if a home fire started at the furnace, the furnace manufacturer or servicer could bear some responsibility. Document the furnace manufacturer’s name as well as the model number and anything you see identifying the service company, e.g., stickers on the furnace indicating the dates of service.
What happened during the loss, and when? Talk to others at the scene inspection to gather as much information as you can about what allegedly happened. Talk to neighbors and other onlookers who may have witnessed the event. For example, in a fire case ask: Where did eyewitnesses first see flames? Did they hear any alarms going off? How long did it take for the fire department to arrive? Also, glean information from what you can see at the scene: Where does it look like the fire started? If the kitchen is charred and the stove is almost unrecognizable, that’s something you should note.
What alarm products are involved and where are they located? Document the manufacturer and model number of every alarm component and exactly where every component of the alarm system is located, even the ones you think will have no bearing on the loss. Also, document the condition of the equipment. For example, what sprinkler heads “popped,” and where? Was the alarm equipment damaged in the fire? Keep in mind that at the initial inspection it is oftentimes too early to tell where a claimant will go in placing blame. You never know what information will later be important, so it is best to document all the information you can..
Why did the alarm not sound (if it indeed did not)? Look for potential explanations for the alleged failure of the alarm system. There are many conditions out of your control that could have prevented the alarm system from working appropriately—a disruption or damage to electrical or telephone lines, for example.
Next read Investigating a customer’s loss (Part 2), to learn more tips for scene inspections.