Tips on how to best pursue insurance coverage when having a loss in the business – Radio Guesting Dec 15, 2020

Tips on how to best pursue insurance coverage when having a loss in the business – Radio Guesting Dec 15, 2020

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Welcome back, everyone. We’re now live on Facebook. So I want to say hi to everybody out there. There’s my hand right there. We now have with me, Troy Froderman, and he’s one of the principals of FR Law Group. Welcome back to the show. You know, tell everybody a little bit about yourself as you’ve been here in on rock, but live here with me now. Tell everybody a little bit about yourself and what we’re going to talk about today.

Good afternoon, Carol. Yes. So FR Law Group. started, we just finished our third year. So we’re starting into our fourth year as a law firm. We specialize in business litigation. And we principally focus on construction claims, and then also on all sorts of variety of business insurance claims. And so I thought today, what we would discuss is kind of a primer, or some tips on how to best pursue insurance when you have a loss at your business.

Okay, let’s talk a little bit about this. Because, you know, a lot of people that listen to this station business owners people are there’s new businesses that are opening right left here, as well. I want to talk about you as a, you know, how you work with your clients, what it looks like, when they call you how to you know, do you do it for free consultation with them? How does that work?

So sure, the way that we conduct business FR Law Group., is we really pride ourselves on knowing our clients, and knowing their business. And it’s our belief that the best way to provide legal services to a client is to know their space, to understand what their business risks are, what their goals are, and also the people the talent within the client. And so we really take time to do that. We do a lot of background analysis, research on the clients at our own cost, not charged, obviously to the client, so that when they do have a business issue that they need our assistance on, we’re their feet running on the ground immediately.

And so when they call you and they would call you directed 602-566-7425, your website is You’re rated with the Better Business Bureau.

Now, when you work with people, though, you work, obviously you have your law firm here, but you work nationwide, as well…

…we do we have matters pending throughout the country. So typically what will happen is if a business is located here in Arizona, they may have other stuff going on throughout the country, particularly if they’re a national company that just happens to have a presence here. Right. So my background is having spent over 27 years with an international law firm, traveling the globe, advising clients litigating cases. So we take that level of experience, and we’re now able to bring it to a client that couldn’t afford an international offer.

Right. And I think that’s what’s great about you is that that is what you tried to do is make it so that it was affordable for people to get representation. When, first of all, some people don’t even realize that they can get this and what they can do. And when this plays, especially with insurance claims, I want to talk about how somebody does pursue it. How did they do that and when the best time is to call you

Sure. So any business has risks, and you may have a fleet of automobiles, you may have different plants and operations. Sometimes the business risk and the business loss is fairly easy to identify. One of your employees is involved in an automobile accident and injures a third party. Well, that one’s pretty easy, just tender it to your business auto carrier. There may be times though, in that example, where it’s not as clear cut. Let’s say that the employee was involved in the accident at eight o’clock at night. And his hours of operation for the employer are from eight to five, well does the business policy cover that after hours accident, that’s where you need the assistance of a lawyer particularly if the loss is significant. So it’s a wrongful death, then you’re looking at, you know, exposure, significant exposure. And so that’s when you really want to bring somebody in like FR Law Group to advise you, because the insurance carrier as I’ve said repeatedly, the portion of the policy that provides coverage is less than one page. The remainder of the policy is a section on definitions and a whole list of exclusions. And so in the example I just laid out for you, which is relatively simple, the insurance carrier may come back and say, well, we only cover that individual during hours of operation. So then you get into a whole dynamic, about course and scope of employment. Were they was the accident, as a result of him that employee leaving the scene, or leaving work and getting into an accident, or was it just something that was on his own personal time, and it because it gets embroiled,

it’s a great time for you to be mentioning this, because a lot of employees might be leaving work. And having that happen, especially with I know now weren’t now, the holidays are here. And we are partying a little bit. Right, right. And this could happen, it can happen in any way. It doesn’t have to be with this. But it just, it just so happens that it’s the holidays are here,

right, and I bring that example up, because that one’s fairly simple. The ones that we really typically get involved in when it’s not as simple. Let’s say that there’s some type of let’s say, you create a widget, and there’s a breakdown on the assembly line. And you end up losing profit as a result of the breakdown. So at that point, most companies have property policies and most property policies have business interruption, service, or coverage. And so the question becomes, then, is that a covered claim? And how much is the loss, and the policy will have different subsections within it, that quantifies different sub bases of that. So we’ve

spoken about the policy a lot, right? And many times you’ve been here, because it is all about the policy and what it says. And it’s kind of where you come in, where you can read it. Right. But when do you call you? Do you call when before? or after? Or when’s the right time?

The answer is yes to all of that. So the way I like to explain it is, so when you have a loss, and you want to present it to your insurance carrier, most of our clients coming to us, this is the first time they’ve had to deal with a significant loss, or they’re seeking insurance coverage. So they are just, you know, into the process for the first time. On the other side is the insurance carrier. They have a whole group of employees who are trained on reading these policies, who understand claims adjusting, who know the ins and outs of that particular policy, then they have layers of supervisors on top of that. And so you have on one side, the policy holder, who’s new to this, and then on the other side, you have a very gigantic Corporation,

though, do it? Yes. Every day.

Yeah. Right. And so that’s when you really need the assistance of a coverage counsel to come in and advise you

now the phone number to call them it’s airy code 602-566-7425. They do free consultations. They work nationwide rated with the Better Business Bureau. They’re located right here in it well at Seventh Street and Camelback right off of right next to Xavier, but they help anyone nationwide. I think it’s really important for people, obviously, if you’re going through sucking, do you do second opinions?

Yeah, we do. And you know what I say that to clients, if they come to me, and they asked for advice on a particular loss. My suggestion to them is because sometimes it’s a coin flip on whether there’s coverage or not. And so, whenever I think that it’s a coin flip, I always say you’re better to go and get a second opinion. In case I’ve missed something or in case something’s changed, but it’s like going to a doctor. If they’re going to perform major surgery, obviously, you’re going to want to go and get a second opinion. Sure.

I think that’s a really important point too. And I think that’s also important if you’re dealing with something right now, what I love about this show, it’s information that you’re hearing here that you can take with you at write the number down. You never know also, when you’re going to need something like this. I think that’s really important for people to write the number down at 602-566-7425. We’re gonna go to a break. We’re gonna come back, I want to talk about some other things. I like talking about the stories. Those are kind of neat, too. And, you know, be prepared, obviously. Yes. and be proactive and if God forbid something is happening, have somebody take a look at it. That’s what he’s here for to tell you about himself. Again, he’s rated with the Better Business Bureau. Check them out. It’s

So welcome back everyone. We’re talking with Troy Froderman, and he is one of the principals of FR Law Group. At the break, we’ve been sort of talking about what we want to talk about for the next half. And one of the things that we wanted to go back on was going to the basics. And I love going back to basics with things because sometimes people need to hear things over and over again and also need to understand things. One of the things that we talked about was that you know, the contracts, right? Let’s go back on to that and how you want to talk about them?

Sure. So especially for small businesses, I’ve had so many small business clients over the years, when they think of insurance, they just assume that if there’s a loss that their insurance carrier is going to step up and pay for the loss. And that is not the case. So an insurance policy is nothing more nothing less than a contract. It’s a written contract between the business and the insurance carrier. And the insurance carrier, in most instances, drafts the entirety of the insurance policy. And so it’s very important that when there is a loss that you go back and you review the policy before putting the insurance carrier on notice, make certain that the policy that you’re tendering is the correct policy and make certain that you’re relying on the correct language in that policy to trigger the insurance carriers obligations. There are all sorts of games that can be played to avoid the contractual obligation that the insurance carrier has.

So when did they call you on that?

Well, again, if it’s a relatively small matter or an auto accident, something like that probably don’t need to call us but if there is a loss Whether it’s bodily injury, property damage, trademark, pollution, whatever the loss is, and it’s one that is of significance, the way that public companies referred to it is, does it have a material impact, such that you have to report it? So, in for fr lager, the best thing to do is if if it’s enough of a business loss for you to be worried about in terms of affecting the bottom line for your company, then you should call it for,

you know, though, I want to say this, though some person might feel like it was a big loss for them. Sure. Right. Of course, maybe the insurance company doesn’t see it that way. Right. So can they call you talk to you see what you know, and talk to you about it? Obviously, if it’s something that doesn’t make sense, don’t call but if it might?

Sure. It’s the old saying that minor surgery for you is major surgery if it’s gonna happen to me. So every client, Every business has their own gut factor in terms of what you know, they’re worried about. So typically, what we do is we meet with the client, or the prospective client, we do that at no charge, review the policy review the loss. And I’ve been doing this long enough that if I don’t think it’s covered, I will tell you and I will tell you why I don’t think it’s covered. If I think there’s a question, then we will certainly sit down and you

never know until you find out. Right, right. It’s all about that phone call to have that conversation about it. The number to call at 602-566-7425 their website is fr law. I want to also talk about stories because we were talking about sometimes there’s things that go on it, like you said, in the hospitality industry, the things that happen, and I would love to hear some you want you to tell one of them.

Yeah, so one of the ones that it to me is interesting. I represented years ago, a well known resort here in Arizona, where a guest contracted Legionnaires disease and ultimately passed away from it. Oh, that’s terrible. And so the question became proximate causation where, where was he exposed, such that he could have contracted what most people think is a very unusual disease, but it’s more prevalent than folks know. So basically, it can occur in stagnant water that gets piped through either ventilation system, fountains, water fountains misters. And so the argument I’ll call out is don’t go out. Right. So the argument that was made was that there was Legionella bacteria and the water system of that resort. And it’s almost like proving a negative for the resort, because it’s the Legionella bacteria is what we say is omnipresent. It’s everywhere. Oh, yes, throughout. I mean, it’s in this building, it’s everywhere. But the question becomes, at what point does it become such that you can inhale sufficient traces of it to make you sick? So the question in that particular case was, did that result in an occurrence in the resorts insurance policy, because there was a third party, that alleged bodily injury which is covered by your commercial general liability policy? So we made the argument that it was covered, that obviously, you know, the allegations being made, and then remember the exclusions. So the carrier came back and said, Well, no, this is excluded because this is a pollutant. And fortunately, there’s a Supreme Court case here in Arizona, that said that bacteria is not considered to be a pollutant for purposes of

This is why you need attorney folks.

So you can see the dynamics. It got very involved, and lots and lots of back and forth between the policyholder the insurance carrier, and unfortunately, the gentleman, you know, passed away. Fortunately, we were able to persuade the insurance carrier to make at least the widow somewhat hole.

Let me ask you this in terms of when you’re working with a client doesn’t matter how big or small that business is,

No, what matters is the legitimacy of their insurance claim. And so, we deal with claims with clients who you know, your 10s of 1000s of dollars and then we also deal with them when they’re in the millions of dollars. To me, again, we are client relationship based. And if we have a client that has a relatively small insurance claim, because we know the client, because we care for the client, because we understand the business will certainly advise and assist.

And I also think it’s important for people to understand that, you know, like you said before we pay our insurance premiums. And so we think that we’re going to be covered. And I really think it’s important that you do read your policy. Right. But unfortunately, how many people understand their policy?

Very few. And typically, what will happen is the first person who gets blamed when there’s a denial by the insurance company, is the insurance agent, the agent that purchased the policy for you. I can’t tell you how many times that’s the initial reaction. And I’d say 90% of the time that reactions incorrect, shouldn’t it’s not the agents fault? The question becomes, what does that policy cover? And if the policy covers your loss, then you know, let’s pursue it, you know, I want to also talk to people out there to make sure that they do have insurance, business insurance, right, it’s important,

it’s very important, you know, an odd thing is, is that in Arizona, unlike some other states, myself as a lawyer, the State Bar does not require us to have errors and omissions coverage, which is crazy, in my view. Yet, if you have a transportation fleet, you it’s mandatory that you have coverage, insurance policies for that fleet.

And I’m going to say, if it can happen, something can happen to me, and I’m just the sole proprietor. But I’m in a business that, you know, when you’re working with people, things can happen. And I never had anything until obviously, something came up. And then of course, I had to make sure, but more importantly, for everybody to understand their policy. And if God forbid, something’s happening, certainly don’t try and do it yourself.

Yeah, if I can, if I can add, if if you’re a small business, and you assign purchase of insurance to somebody in your company, to work with the insurance agent, that insurance agent would be more than happy to sit down with you as the principal, at no cost over lunch or whatever. And explain to you, here’s the coverage, I think you need is there something in your business that this might not apply to that we need to go out and see if there’s insurance for it.

And that’s a good idea to do. The best thing to also is call you talk to you have a second opinion, if something is going on, please don’t try and do these things on your own. You’ve been doing this forever. And you brought, what you brought was the big guns to the to be affordable for us. Normal Pete folks out there, right.

And I can’t tell you how much I enjoy doing that. Because for so many years, I was unable to help friends and people who had small businesses because they couldn’t afford the hourly rate of the large firm and I was, you know, unable to help them. Other than through casual conversations,

you know, business interruption real quickly. What how far does that go? I mean, a lot of people are being interrupted even as we speak.

Right? Well, if you’re thinking about COVID-19. So what you have to demonstrate for business interruption loss, you have to show that there’s some type of damage to your equipment, or some type of loss of use of the equipment. And so it becomes a big battle. But so the carrier and the balls

again to you, if you have dealt with something and you feel like it might you might have a case, Have them a conversation with you. Yes, their phone number to call them again, direct at 602-566-7425. They do free consultations. The website is they’re rated with the Better Business Bureau. They work nationwide. so important for you to make sure let’s say you’re starting a business, make sure that you do have that coverage. Make sure that it you should read your policy, God forbid you’re going through something. Again, don’t do it for yourself. Have somebody look through this. They’ve been doing this for 31 years, their number again it’s 602-566-7425.