Subrogation: Seeking reimbursement from the responsible party for a claim THE INSURER has already paid

CONSTRUCTION DEFECT SUBROGATION

http://metroforensics.blogspot.com/2014/10/fraud-investigation-and-subrogation.html

What Is Subrogation?

Subrogation refers to the process an insurance company uses to seek reimbursement from the responsible party for a claim it has already paid.

Subrogation matters to you if:

·         You have a covered loss, and

·         You submit a claim to your insurance company, but

·         Another party is actually responsible for all or part of the damages (i.e. you have a car accident and the other driver caused the accident, or if damage to your home was caused by a faulty appliance)

In this case, your insurance company may pay your claim, and then seek reimbursement from the other party. This would depend on the circumstances surrounding the loss, the laws in your state, and your policy provisions.

If your company decides to pursue subrogation, the company will work to recover the damages from the responsible party.  Damages may involve costs paid by you and the insurance company.  Costs paid by you usually means your deductible, but could include amounts over your policy limits not paid by your insurance company. This would depend on the laws in your state and the specific circumstances surrounding the loss.

The subrogation process may also be used if you are at fault for damages.  In this case, the other party and/or their insurance company would make a claim against you, usually directly to your insurance company.  Your company will review the facts of investigation to determine if you are liable for the damages.  Your company may make payment to the other company if you have coverage and it is determined that you would be legally responsible for all or part of the damages. Keep in mind that often times liability is not clear cut. In some cases, both parties may be partially responsible. Dependent on the laws in your state, both parties may share responsibility for payment of damages. For example, one party may be 40% responsible, and the other party may be 60% responsible. This could mean that both companies make subrogation claims against each other, and each company pays their respective portion of the other party's claim.

In all cases, your participation and cooperation with us in the investigation phase of the claim process is important. Your assistance can help to establish important facts, and preserve evidence, and may help to accelerate the recovery process.

Insurers do not ordinarily think of themselves as plaintiffs.  A carrier's subrogation rights can exist under common law, equity, contract, or statute.  No matter its origin, a carrier's right of subrogation and its ability to recover a loss, large or small, is a fundamental right of the insurance industry.  A successful subrogation program can often mean the difference between profit and loss.

METROPOLITAN has represented more than 350 insurer, self-insured entities, third party adjusting companies, and government entities in connection with subrogation related litigation. This includes recovery efforts in the areas of personal lines insurance, worker's compensation, fire, group health, casualty, fidelity and surety bonds, uninsured motorist, inland and ocean marine, ERISA, long shore and harbor worker's compensation, aviation, hospital liens, group health and disability, conversion claims, med pay, mistaken payment of benefits, recovery of premiums, and other areas.

METROPOLITAN aggressively pursues subrogation rights which have traditionally been neglected and underutilized.  Implementing an aggressive and successful subrogation program remains an insurance carrier's biggest challenge. Lacking the historical respect given to other areas of the insurance industry, aggressive subrogation has become an indispensable function of carriers interested in making every effort to maximize profit. Through aggressive subrogation training programs and the investment of subrogation resources, insurers are no longer backing down when it comes to recovering what is rightfully theirs.  Hiring a full service firm like METROPOLITAN to implement an innovative recovery program and aggressively pursue and recover every possible subrogation dollar is a necessary step toward this end. In effect, failure to recognize third party liability and take advantage of all subrogation opportunities is tantamount to paying a claim twice. Subrogation must be recognized as a profit center worthy of the investment of time and resources.

PROPERTY DAMAGE

From automobile losses to fire and casualty to catastrophic inland marine transportation claims, METROPOLITAN takes the action necessary to preserve your subrogation interests and aggressively recover your claim dollars.

WORKER'S COMPENSATION

When a work related injury results in a claim, every state has a different set of priorities and rules regarding your right to recover these dollars. Prompt action is necessary to guarantee maximum recovery. Our network of local counsel allows us to act as a clearinghouse for subrogation claims across the country.

INLAND AND OCEAN MARINE

Transportation law and claim investigations can be complicated and confusing.  METROPOLITAN specialized in navigating the mine field of modern transportation and defeating limitations wherever possible.

RECOVERY OF MISTAKEN PAYMENTS AND OVERPAYMENTS

When an insurer makes a mistake of tact in paying a claim, it has valuable recovery rights which it should avail itself of. Prompt action is necessary in order to avoid bars and limitations to such recoveries. We aggressively pursue and recover overpayments, claims paid by mistake, as well as premiums due from insureds.

GROUP HEALTH AND DISABILITY

In addition to counseling group health providers and plan administrators on plan and policy language, METROPOLITAN expertly puts to work favorable plan subrogation language and federal law under ERISA, where applicable, to maximize your recovery of medical and disability benefits at an absolute minimal cost. We represent several such group carriers and plan providers on a nation-wide basis.

BENEFITS OF A FULL SERVICE SUBROGATION FIRM

Most insurers don't realize when they have lost subrogation dollars.  When such recovery opportunities are lost, it is usually because third party liability is not timely recognized or is not recognized at all. These monies are lost forever and you may never even know it.

INVESTIGATING SUBROGATION

METROPOLITAN believes that immediate investigation, especially in catastrophic losses, is essential to an effective subrogation program. METROPOLITAN will conduct an investigation of subrogation potential whenever there is a serious injury or catastrophic property loss, even in instances in which it appears that there is no visible source of recovery.  It is paramount that this investigation is initiated while memories are fresh, witnesses are available, and the evidence has not been destroyed or tampered with.  Our expansive collection of expert witnesses covers the nation and allows us to get the best quality professionals involved early, and at the right price.

SUBROGATION EVALUATION PROGRAM

METROPOLITAN will also make investigators available to review your files to determine whether files have subrogation potential. Reviewing either electronic files or hard copies of files, METROPOLITAN will search for subrogation potential and make recommendations on files where further investigation or subrogation activity is needed. These services are offered free of charge to our clients.

USE OF SUBROGATION AT METROPOLITAN

The word subrogation comes from the Latin word subrogoree, meaning to substitute.  Subrogation is therefore a substitution of one creditor, the damaged Insured, for that of another, the insurer.  The concept of subrogation arises out of the property-casualty insurance policy as a contract of indemnity, with the purpose of returning the Insured to pre-loss condition.  No subrogation exists in life insurance because a life insurance policy is not a contract of indemnity.

As the right of subrogation arises out of the property-casualty policy as a contract of indemnity, this right exists without the subrogation clause contained in the policy, which would appear to make it redundant to write the subrogation clause into the policy.

The subrogation clause is written into the policy for two reasons: to prevent the insured from waiving subrogation rights after the loss; and to allow for recovery to the extent payment has been made, known as “pro-tanto” recovery.  The subrogation clause allows an Insurer to subrogate as soon as a loss has been partially paid and before there has been complete indemnity.

Most subrogation clauses allow the Insured to waive rights of recovery before a loss.  However, the ISO Builders Risk Form only allows a pre-loss waiver of subrogation with the written permission of the insurance carrier.

Nearly all insurers allow the Insured to engage in pre-loss waivers of subrogation in order to allow the insured to engage in some non-insurance transfer, such as hold harmless agreements, and are perceived as necessary to allow the Insured to conduct its business affairs.  On the other hand, most policies do not permit the Insured to waive rights of recovery after a loss, and the Insured who does risks voiding the policy.

The effect of subrogation is to create an equitable rate structure, reducing first-party losses and ultimately, fist party premiums (it has been estimated that auto collision premiums would increase by 31% without subrogation).  Conversely, subrogation increases third-party losses and liability premiums.  Subrogation forces the party responsible for a loss to pay for it.

Recovery percentages can be increased through prompt recognition and investigation.  Most subrogation is missed through failure to recognize third-party liability.

IMPLEMENTATION SUBROGATION TECHNIQUES AT METROPOLITAN:

1) Develop a theory of liability

Is this a products case, one of negligence, or possibly breach of warranty? The theory of liability indicates the various issues that must be proven and will become the blueprint for investigation.

2) Investigate

Preserve the evidence of how the loss occurred.  The closer to the time of loss you begin your investigation, the greater your chances of recovery. Remember that the burden of proof is yours.

If at all possible, retain an expert to pick up physical evidence to protect yourself from allegations that you altered the evidence.

An added benefit to the use of an expert is that it insures you will not have to testify at trial or be challenged as to your expertise. It also protects you from identifying the insurer.

Instruct your expert to document the evidence with a three-part receipt: one copy to be attached to the evidence, one copy for the claims file, and one for the owner of the evidence.

3) Secure the Evidence

The evidence should be kept in a place to which only the adjuster or his expert has access, such as a locked desk drawer or file cabinet. This helps to establish that control has been maintained and the evidence has not been altered.

4) Take statements

Statements help witnesses clarify what happened and can be used to refresh their memories later. Some people from whom statements are obtained may even be determined to be experts by the court. For example, the mechanic who worked on a particular automobile may not have a degree, but he may well have worked on that particular make and model car many times and be aware of technical problems associated with it.

Increased recoveries improve profit. Every dollar recovered decreases losses. Underwriting and loss adjustment expense is incurred whether or not there is a recovery. Subrogation recoveries are bottom-line profit, and can make the difference between profit and loss.

Metropolitan Engineering, Consulting & Forensics (MECF)

Providing Competent, Expert and Objective Investigative Engineering and Consulting Services

P.O. Box 520

Tenafly, NJ 07670-0520

Tel.: (973) 897-8162

Fax: (973) 810-0440

E-mail: metroforensics@gmail.com

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MOLD - Hype or Real Risk?

Increasingly, we are talking about specific kinds of mold, not just old mold. Is this a new problem or just one that our technology is now allowing us to detect more effectively?

Are we overreacting or should we be concerned? If we should be concerned, what products or actions are most effective? Unfortunately, there is not a simple answer. We do have better technology that allows us to understand and analyze more of the world around us. Some of the air quality issue is simply because we know more about it.

However, it is also true that we are building homes and buildings that are more vulnerable to conditions that promote the growth of mold. It is also true that mold is one of the most common causes of frequently reported respiratory problems. The following is intended to provide an overview of what we know about mold and what we can do about it. Before you take any action in your own home or building, however, you should consult a local specialist: a building inspection engineer.

The problem of mold is one that no building owner or manager can afford to ignore. Mold has been suggested as one possible factor in so-called Sick Building Syndrome. The unusual weather conditions in many parts of the United States in recent years have provided good conditions for the growth of toxigenic fungi and increased the potential for human exposure. Throughout the country, deaths of children from pulmonary hemosiderosis (bleeding lung disease) have been attributed to inhalation of toxins produced by the fungus Stachybotrys chartarum.

The U.S. Department of Housing and Urban Development awarded $3.1 million to the city of Cleveland to remediate mold and moisture problems in houses and apartments. Mold problems in the Martin County Courthouse in Florida apparently caused by a leaky EIFS (exterior insulation finish system) facade cost $26 million to remediate. The building cost $13 million to construct a few years earlier. An old school building in Canada, infested with toxigenic fungi, had to be burned. Mold is a problem.

What is mold?

The words mold and mildew are sometimes used interchangeably. If there is a difference in the two terms, it is that mildew generally refers to a fungus-caused discoloration of an underlying, porous material, whereas mold refers to a fungus growth on a porous, often rotting material. Essentially, mold is the growth produced by several types of fungi as they feed on organic matter. Mold typically reproduces asexually by means of airborne spores. These spores are always present in the air. There are thousands of types of fungi (mold).

Many fungi are helpful. Some good types of fungi are those used to produce Camembert and Roquefort cheeses. The wonder drug penicillin is a by-product of the fungus Penicillium notatum.

What does it need from us?

Like all living things, mold spores need certain conditions to reproduce and grow. Mold needs water, food, and the right temperature range. Mold grows better in a dark environment, and with an organic, porous material to grow on. Such material often provides a source of both food and water.

Unfortunately, buildings provide an almost ideal environment to support the growth of mold. The typical temperatures are right, and there are plenty of dark places and organic substances. Just add water, and you’ve created a perfect mold breeding ground.

Dry rot, a common condition in older homes, is bacterial activity similar to mold and needs the same combination of conditions for ideal growth. If you have dry rot, you probably have mold. The reverse is true as well.

Why should we be concerned?

Mold can feed on and destroy most of the organic materials found in buildings such as wood, paper, carpet, and glue. However, almost any surface can support the growth of mold. Although mold can be found anywhere, it typically grows in dark, moist places such as behind walls or in HVAC ducting.

Mold can cause harmful health effects in humans. Although the species Stachybotrys chartarum (sometimes referred to as stacky for short) has received most of the recent press, many other types of fungi are potentially harmful to humans as well. For this reason, Stachybotrys chartarum is not treated as a unique case.

One bit of good news: although Stachybotrys chartarum is considered one of the more hazardous forms of mold, its spores are wet and slimy. That makes it a bit easier to visually identify and much less likely to become airborne. Stachybotrys chartarum is usually transferred by contact with insects or rodents or by water.

Exposure to fungus can cause organic dust toxic syndrome (ODTS) or hypersensitivity pneumonitis (HP). ODTS may occur following a single exposure to high concentrations of dust contaminated by fungus, such as might be encountered during remediation or renovation work. The symptoms are flu-like. HP occurs as a result of prolonged exposure and can lead to permanent lung damage.

Exposure to fungus can also cause allergic reactions: typically a runny nose, sneezing, eye irritation, cough, or aggravation of asthma.

What should I look for?

Mold is not only a problem in itself but also a symptom of a water problem. The first step in any investigation for the presence of mold in buildings is to follow the water.

Look for evidence of high humidity, condensation, or visual evidence of water staining. Mold grows in dark, hidden places, such as behind walls, and may not always be visible. Other clues, such as musty odors or reported physical symptoms in occupants, should be noted.

How do I know if I have a mold problem?

If you see mold or evidence of moisture accumulation, test the suspect material. Testing, in order to identify the particular species of mold, can be performed by a number of laboratories. The EPA has recently developed a DNA-based testing procedure that dramatically reduces the time it takes to identify which of the 100 or so most common mold species may be present. Using this technology, tests that used to take days or weeks can now be performed in a matter of hours. Information on the EPA testing method is available at http://www.epa.gov.

Consultants and laboratories are listed under environmental laboratories or industrial hygienists in the yellow pages. Such firms can usually help with mitigation as well, should that be necessary.

How can I minimize the risk of mold?

Because mold likes the same temperature as humans, changing the ambient temperature as a method of control is not usually an option.

It is hard to eliminate the molds food source entirely, because it feeds on a wide range of materials commonly used in building construction and interior finishes. However, because mold can feed on dirt, cleanliness can go a long way toward control.

The easiest way to minimize mold growth is to eliminate sources of water. Moisture in a building can exist in two forms, as humidity and as free water. Moisture may come from inside the building through condensation, plumbing leaks, cooking, showers, or the HVAC system. Water may enter the building from the outside through leaks in the roof, the facade, or the basement. Water also may be introduced into the building through the use of wet building materials such as roofing materials, insulation, and drywall.

If you identify any of these sources of water or moisture, you should take immediate steps to eliminate them. This may require modifications to the structure, improved ventilation, improved environmental controls (HVAC), improved surface drainage, or any one of many other possibilities. You should consult a qualified building inspection engineer for advice.

How can I remediate an existing problem?

Any plan to remediate mold must first address solving the water problem. The source of the moisture must be identified and the condition rectified. Only then should the process of remediation begin.

Remediation consists of either cleaning the affected materials in place or the removal and replacement of these materials. The decision of whether to clean or replace is largely an economic one, based on the size of the areas affected, the ease of access, and whether or not the building components have been damaged by either mold or water.

If the buildings structural components are not damaged, small areas can usually be remediated by homeowners or maintenance staff. Trained contractors, however, should handle larger areas. Dealing with extensive areas of mold is like handling any other hazardous material and requires specific training. The New York City Department of Health publishes a useful guide titled Guidelines on Assessment and Remediation of Fungi in Indoor Environments. It is available on line at http://www.ci.nyc.ny.us/html/doh/html/epi/moldrpt1.html

Other ways of dealing with large infestations are being tested. At least one company treats moldy houses by enclosing them and raising the interior temperature in a controlled manner to about 160 degrees F. This effectively bakes the mold and kills it.

Most air cleaners (purifiers, ionizers, etc.) are not effective in dealing with a mold problem. At best, such equipment deals with the symptom rather than the cause.

Summary

For help with mold problems or suspected mold problems, the first step is to contact an engineer who is qualified to perform the diagnostics necessary to determine the root cause of the problem. Determining the cause of the problem, whether that is a leaky roof, facade issues, excess humidity, or a malfunctioning HVAC system, is often a complex process of detective work. There are often false leads, and inexperienced people often mistake effect for cause, leading to a misdiagnosis.

Breathing is essential to life. It is not an option. Breathing contaminated air can lead to respiratory irritations and, for some, can be life threatening. It is time well spent to inspect the buildings in which you live and work to determine if there are any suspect conditions that might lead to a mold infestation. If there are, testing, source identification, and remediation should follow quickly.

For the office nearest you, call 1-800-242-1969.

Facts and Myths about Household Mold

Without question, mold is one of the most misunderstood threats to homes. Lawsuits related to mold have been brought against developers or even association boards over health issues and construction problems in communities. These incidents have brought to focus the confusion over mold – what is it exactly, and how much is too much? Mold can almost always be found in the air that we breathe and the buildings we live in. But if mold is as old as the earth, why all the concern now?

Mold has come into the spotlight due to several factors, one of the most prominent being the increasingly modern lifestyle that associations and their residents lead. The latest luxuries and conveniences such as indoor swimming pools and central A/C can place additional sources of moisture in the residences and clubhouses – which is the number one reason for indoor mold. There is no way to eliminate all molds and mold spores; the only way to control indoor mold is to control moisture.

To restore some sanity to the discussion, let’s bust the two biggest myths about mold.

MYTH: It is possible to live in a community completely free of mold.

Fact: Every building and thereby every community has some amount of measurable mold – no matter how small. Mold is everywhere, both in and outside your homes. The number one step that associations can take to reduce the levels of problematic mold is by using the building’s ventilation systems, or installing proper ones to get rid of excess moisture.

Venting homeowner’s bathrooms and dryers to the outside of the building, using air conditioners in the summer, and immediately fixing any signs and the source of a water leak will go a long way in preventing mold growth. Mold may always be present, but it doesn’t always have to be harmful. Since HVAC systems and/or the building frames are often a common element in garden-style condominiums, these communities can take an active step in to control moisture.

MYTH: There are national standards in place on how to test for mold, and how much mold is “allowed” inside a home.

Fact: There are no national standards or protocols on how to test for mold or analyze its impact. However, when a problem is suspected, an industrial hygienist should investigate the property and give a professional assessment of the mold levels. The only way they can really perform this assessment is by testing the outside level of mold and comparing it to the inside level.

Be wary of any ‘mold inspectors’ who require you to pay high fees for a test and then when mold is found, as it will be, recommend very drastic and expensive measures to get rid of it. There are a few extreme situations where this remediation may be necessary, but these cases generally involve large sections of the building with discoloration, damp walls and floors, and a strong musty smell.

There could be hidden mold in your community's homes, and since some types of mold are more hazardous than others, it’s wise to investigate if you suspect a problem. Mold remediation can often be a simple process, as long as you stay vigilant and aware of the interior moisture levels. The trick is to catch mold before it eats away at your community’s homes—and wallet.

Almost 100,000 Oil Workers Out of Work Due to Oil Price Plunge

Published in Oil Industry News on Monday, 4 May 2015

The oil & gas industry currently suffers a shortage of mid-career professionals primed for leadership & supervisory roles, the legacy of the last oil price downturn in the 1980s to mid-90s, Douglas Westwood, an energy industry intellignce group, writes in its DW Monday report.

At that time the industry endured significant job losses, and hiring came to a standstill. As a result of the limited talent added, the group of individuals advancing into supervisory or eventual leadership positions in the oil and gas industry is notably small.

Since oil price started declining late last summer, layoffs in today’s industry are nearing 100,000 worldwide. Oilfield service companies Schlumberger, Baker Hughes, and Halliburton announced layoffs of around 20,000, 10,500, and 9,000 employees respectively, while E&Ps BP and Chevron each announced layoffs approaching 10,000 of their employees.

According to a survey completed in January 2015 by Rigzone, 44% of the surveyed companies indicated that they plan to hire fewer workers over the next six months while 5% indicated they plan to completely halt hiring efforts.

Although the oil & gas industry employs numbers of low-skilled workers, the lifeblood of the industry is the variety of specialised engineers, technicians and rig crews who boast years of involvement in the field along with formal training or university degrees. Continuing widespread layoffs, frozen or reduced pay checks and the effects a lengthy downturn will have on the industry can dissuade such individuals from pursuing careers in oil & gas and encourage college graduates to move into more stable industries.

Just as the legacy of the 1980s-90s created a shortage of experienced workers – contributing to rising costs, execution challenges, and safety concerns – the numbers of lost personnel, both current and future, threatens the long-term capacity of the industry. To many in the business it feels like history is repeating itself.
Source: www.offshoreenergytoday.com

DOUBLE TRACTOR TRAILER TRUCK FLIPS TO ITS SIDE AND SPILLS 600 GALLONS OF FUEL IN WAYNE COUNTY, UTAH

MAY 4, 2015

(KUTV) Southern Utah had to handle a sizeable fuel spill Sunday evening. A semi-tanker tipped on Highway 24 in Wayne County.
The truck held 10,000 gallons and about 600 were spilled. The driver was not hurt but the road was closed for several hours while a Sevier County hazardous materials team cleaned the area.

http://www.kutv.com

Video: Coast Guard Rescues 3 Fishermen from Capsized Vessel, Searching for Master near Quillayute River, Wash.

A Coast Guard Station Quillayute River 47-foot Motor Life Boat crew searches for the master of the fishing vessel Sea Beast which capsized near the Quillayute River, May 3, 2015. 

Three other crewmembers from the Sea Beast were rescued from a life raft by the MLB crew and an MH-65 Dolphin helicopter crew and the crew of the Coast Guard Cutter Blue Shark also assisted in the search. 

U.S. Coast Guard video by Air Station Port Angeles.