The single most important ingredient to uncovering subrogation is an early incident investigation. I cannot emphasize that enough. I have previously touched on the significance of conducting an early investigation, but it is so critical to identifying subrogation that it bears repeating.
What do I mean by “early?” Simply stated, now. Not in a few minutes. Not in a few hours. Not in a few days. Early means right now. No delays. Of course, there will be situations where summoning emergency medical care for an injured worker or taking steps to mitigate a hazardous situation to prevent further or additional injury will naturally take precedence over starting a subrogation investigation. But the minute that those types of issues under control, subrogation should be investigated.
Why delve into the possibility of subrogation so early? Several important reasons. First, witnesses disappear quickly. Witnesses who were working nearby disburse and, for whatever reason, are often never identified or located. Witnesses also frequently move, seek other employment and even die. Moreover, even if a witness is available for interview, their memory of the details surrounding an event can fade over time. Consequently, to get the best understanding of the facts all people with knowledge need to be immediately identified and interviewed.
The second reason for conducting an early investigation is to prevent important evidence from getting lost or discarded. An early investigation will identify any product, machinery or equipment that must be set aside and preserved. That is vital to successful subrogation because having no product almost always means that no product liability claim can be asserted.
Third, incident scenes rapidly change over time for a variety of reasons. Few things are more devastating to identifying subrogation as a spoiled or materially altered incident scene.
An early investigation will yield the best evidence and will maximize the chances of revealing a subrogation opportunity worth pursuit, which could result in substantial savings on an employer’s comp insurance premiums.
One way that AEU drives down claims costs for ALMA members is the money savings generated through subrogation. Since 2003, AEU has saved ALMA members over 10 million dollars through subrogation recoveries and the reserve eliminations on claims with subrogation.
ABOUT THE AUTHOR
Royce Ray joined The American Equity Underwriters, Inc. in 2007 and serves as Director of Special Investigations/Subrogation Unit. Royce’s area of focus is subrogation investigation, management, and recovery. Prior to joining AEU, Royce practiced law in Mobile, Alabama for 17 years, handling litigation with an emphasis on plaintiff personal injury cases. He received his bachelor’s degree from Rice University, magna cum laude, and his law degree from the University of Alabama. Royce was admitted to the Alabama State Bar in 1990 and is a member of the Mobile Bar Association. Royce holds the Certified Subrogation Recovery Professional (CSRP) designation conferred by the National Association of Subrogation Professionals.