Bottle Over The Head Insurance Claim

This is an excellent story and learning experience for any establishment that sells alcohol:

I had a call from a good client this past Friday, the day prior to the big celebration of Cinco de Mayo.  Apparently there was an altercation in which one person was struck over the head with a beer bottle; this happens quite often when you mix alcohol with testosterone in a crowded environment.  He wanted to know his options on accommodating the individual who was injured.  Luckily, the injuries were minor and we had ample coverage for Assault & Battery on his policy (this would NOT be covered under your typical General Liability, in fact, it is excluded in most cases).  We went over the pros and cons of filing a claim, the deductible, how many days the victim had missed from work, etc.  This is an example of how well your agent performs risk management.  They need to weigh the options with you of paying for this out of pocket (inside funds) or using the insurance (outside funds).  In this case, the insured and myself decided that using inside funds would be the proper choice. 

There were quite a few factors that went into this decision.  1) The total medical bills amounted to just over $1,700 plus an additional $200 for lost wages, totaling $1,900.  2) His deductible for this type of claim was $500 - so the total payout from insurance would be $1,400...or would it?  I will explain that last part in a second.  3) We always weigh out our odds to make sure that we don't continually post small claims; this can be an administrative nightmare for the carriers and could likely raise premiums, which will add up to more than the initial claim itself over the years.

Now to explain that last part about the total payout from the carrier.  You see, there is this action called subrogation that companies use to get indemnified (paid back) for any losses that another party may be liable for.  In this case, the victims portion of the medical bills amounted to $1,700.  Now, I think it's safe to assume that the 'actual' cost for everything was much more than that.  If we chose to file a claim for what seems to be a small amount, the individuals medical insurer would most definitely come back to our client and demand to be indemnified for the TOTAL cost - which could easily be a 5 figure amount...not including the administrative costs associated with the process.  You see, there is a lot more to consider when filing a claim; which is why your agent must understand the needs of your specific industry and how the processes work.