Proactive Claims Handling To Reduce Indemnity Claims Pay Out

One of India’s largest IT BPO companies approached PINC Insure to contest a claim levelled against it by a New York-based global electronics manufacturer. The claimant had collaborated with the BPO to transit a process to its team in Bangalore, India. Initially, the project was on an autopilot platform but subsequently the electronics manufacturer moved it to an Oracle-based platform from its original legacy module. Consequently, the process had to be altered at the BPO in Bangalore- thus entailing a suitable retraining of the resources.

The Master Agreement executed between the two organizations pertained to the initial phases, when the project was being operated on autopilot mode and the statement of work and performance measurement parameters were defined according to the initial legacy system. Following the upgrade of the operating system by the claimant, the contract was changed to suit the requirements of the new operating system. However, the revised terms of agreement were not implemented to the satisfaction of the electronics major, which led to the cancellation of the contract and subsequent claim of damages for USD 13.8 million against the BPO.

The heads under which the claim was made included:

  • Costs of reverse transition of the process
  • Costs of temporary staff that would have to be hired by the electronics company
  • Costs related to procedural breakdown
  • Innumerable errors as alleged by the claimant
At PINC Insure we have a deep network with technical loss adjusters and attorneys specializing in professional indemnity claims.

THE APPROACH

The Intimation of cancellation of the statement of work was sent through a New York law firm and it was important for the BPO to appoint a law firm to handle responses to the claimant. At PINC Insure we have a deep network with technical loss adjusters and attorneys specializing in professional indemnity claims. As a part of our mandate, we assisted the defendant in zeroing in on a suitable law firm with relevant experience in the matter while simultaneously ensuring that expenses were restricted to the fee limit stipulated by the insurance policy.

It was important to present the case in the most neutral, unbiased form keeping in mind the coverage’s mentioned in the policy document. Our team’s in-depth understanding of the wording of the policy and its ability to interpret downside situations in the backdrop of the Insurance Policy contributed significantly to this aspect. We ensured that, the entire repository of documents and information pertaining to the claim beginning with the master’s services agreement till the cancellation of the contract was perused and absorbed.

The Solution

Highlights of the solution recommended by PINC Insure

THE PROCESS UNDERSTANDING

Our team achieved a comprehensive understanding of the outsourced process. This was followed by a verification of process deficiencies to establish the legitimacy of the issues alleged by the claimant. The entire exercise proved to be a significant factor at the time of final negotiations.

POLICY LANGUAGE INTERPRETATION
It was important to interpret the policy exclusion clauses relating to the Service Level Agreement in context of the current claim. Our team’s policy interpretation expertise enabled us to achieve this objective successfully.

The Result

PINC Insure was mandated to determine the course of action to be adopted – either specific settlement or global settlement. We recommended the appropriate solutions to the insurers. In addition, we successfully negotiated with the reinsurers through a clear elucidation of the claim instance and effective countering of the various contentions drawn by the claimant.

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