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Consultant aims to resolve claims disputes Bringing insurers and corporations to the table saves time and money By Phil Zinkewicz Every day, we read in the daily newspapers, periodicals and trade publications, and hear on television and radio, of multi-million- dollar lawsuits involving corporations and sometimes individuals, little known or of celebrated fame. The cases run the gamut of human experience—a woman who spills hot coffee on herself, a bar patron who was injured in an altercation, or a fast food addict who blames McDonald’s for making him fat. In almost every case, however, the one common denominator is the insurance industry. David M. Siesko, founder and principal of Siesko Partners, a newly formed organization that specializes in litigation consultancy, says that the insurance industry currently faces more lawsuits than any other industry, spanning product liability, environmental class actions, directors and officers claims, and coverage for hurricanes and terrorist attacks. Moreover, he says, in the past year, insurance companies also had more than five times the average number of cases pending than did the next highest sectors—energy, retail and financial services. Siesko says his new consulting firm focuses on quickly resolving disputes between large corporations and insurance companies that may arise during any phase of the claims process. He says his approach can save both parties substantial time and money that otherwise would be spent on months or years of ongoing litigation. Siesko brings to his firm some impressive credentials in the claims area. He most recently was global corporate chief claims officer at Zurich Financial Services before leaving in September 2006 to establish his new firm. He has more than 20 years’ experience working with Fortune 2000 companies and insurers. He devoted more than 15 years of his career to developing the customer services division at Zurich Financial Services, where he successfully negotiated and settled large payouts for domestic and international Fortune 2000 companies. He was director of claims and counsel, respectively, in Zurich’s specialty division. Prior to joining Zurich, Siesko worked on major claim and legal issues for American International Group. A member of the bar associations in New Jersey and Pennsylvania, Siesko early in his career represented industrial clients on labor and environmental law. He also worked with the London law firm Lowells during the development of its environmental practice He formed Siesko Partners, he says, to create an entity that will “reduce and prevent long, protracted legal battles, which create financial waste, drain corporate resources and create inefficiencies in the insurance market.” He also maintains that few, if any, independent third-party entities exist to work with both sides to achieve meaningful solutions in reasonable periods of time. “We are not an arbitration organization,” says Siesko. “Arbitration panels tend to produce results that are binding and usually are called in when all other attempts at negotiations have failed. We are mediators, but we don’t try to force a compromise that just splits the difference. We are independent, unbiased mediators. Other parties often face pressures during a negotiating process. Insurance brokers have to balance their relationships with both carriers and the insured, while lawyers have specific, vested interests in the outcome of the events. Because we understand all aspects of the industry, corporations or insurance carriers can retain us to objectively access the facts of the case and make logical recommendations. Litigation should not be the only option when there is a dispute.” How it works Siesko describes his approach this way: “First there’s the ‘reservation of rights’ letter that is usually automatically sent to an insured when a claim has been filed. Generally, this letter lists 15 or 20 reasons why the claim might be denied. This sets up an adversarial relationship. The insured becomes angry and frustrated. Imagine a home owner receiving such a letter when a claim is presented to a carrier. It is not a good basis for a relationship. Ideally, we work with an insured before a claim is filed, so as to prevent any possibility of a denial. We tell the client that the reservation of rights letter is nothing more than a formality and not to view it as a cause for concern. When the client understands that, he or she can concentrate on the factual elements of the claim. If the client files the claim before we’re called in, we can work with the insurance company to determine a realistic settlement. We can work from both perspectives.” Siesko says his firm can represent a corporate client, an insurance company and even producers when a managing general agency is in a dispute with the client or the carrier. For commercial insureds, he says, Siesko Partners can perform a variety of services: decrease litigation expenses and improve a company’s chance of favorable resolution; act as an insurance consultant, offering hands-on knowledge about the types of policies corporations need as well as the potential legal and regulatory issues they may face and how to handle them; and stay abreast of key regulatory issues, advising corporations how these issues will affect their interactions with insurance companies. “For insurance carriers, we can save unnecessary legal fees, help to avoid negative and potentially damaging press coverage and give insight on complex claim strategy,” says Siesko. The areas of expertise in which Siesko Partners excels, he says, include health care/product liability, environmental liability, commercial property, professional liability and international disputes. Siesko comments on current market conditions in some of the areas in which he acts as a consultant. He says that the directors and officers market is “strong” at the present time. “Rates are softening, as well as terms and conditions,” he says. “I think the industry has already digested Enron and WorldCom and all the other corporate scandals that have captured the attention of the public. Product liability is always in a state of flux. The state of the market usually varies with the latest verdict. Professional liability is a strong area of growth for the insurance industry. However, it depends on what professionals are being insured. Those professions that are subject to regulatory or press scrutiny are always going to be expensive in terms of premiums and restricted in terms of coverages. Those that are not highly regulated or subject to press scrutiny will fare better in terms of rates and restrictions.” Siesko Partners has been in operation for about six months, and Siesko says the firm has already taken on several corporate negotiations. * |
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