CASE STUDY OF A SERIOUS LIMO CRASH
by Paul R. Berne, Senior Vice President – Claims, Lancer Insurance Company
It’s one of your worst nightmares…The phone rings, and your driver reports that he’s just been in a serious accident. He tells you: the scene is complete chaos; the police are questioning him; passengers are injured; ambulances are everywhere; your limousine is badly damaged; and he doesn’t know what to do.If you have ever received one of these calls, you’ll recognize the questions that immediately fly through your mind:
“What do I do?’ “Should I go to the scene?” “What should I tell my driver?”
and the inevitable…
“Can my business survive this crisis?”
You dread the emotional and financial roller coaster that lies ahead. But, most of all, you recognize the critical importance of having a serious loss accident response plan in place and having an insurance company partner that is expert in responding to and managing severe limousine accidents.
If you’ve never experienced a loss of this type — good! And I hope you never do. But you should know the importance of having a disaster preparedness/crisis management plan in place which covers a wide range of perils and accident types. It’s never too soon to review what can and should happen if you do have a severe limousine accident. Consider questions like: What should you expect from your insurance company? Is there a “right” way to handle accidents of this type? Does it matter if your insurance carrier specializes in handling limousine and passenger transportation losses?
Trucks Haul Cargo; Limousines Transport People
Insurers who consider themselves ‘commercial auto specialists” usually have trucks as the largest component of their policies in force, including long haul, local/intermediate delivery vehicles, tow trucks and business autos. Is mixing “trucks, limos and other commercial autos” a problem? Maybe not when you’re buying insurance, but ask yourself this important question: Is a passenger transportation vehicle claim the same as a truck claim? The answer is obviously “no”; the losses encountered in your business are very different in many ways than truck, or any other “business auto” claims. Passenger transportation losses at all levels require adjustment by an insurance company that knows your business and specializes in your industry. This is especially true in the case of severe accidents involving multiple injuries and, frequently, fatalities. Let’s explore why this is important by closely examining a real case we recently handled involving a complex limousine loss.
How To Manage A Limo Claim
The incident involves a limousine company transporting six passengers on a winery tour in northern California. The trip is progressing smoothly until an inattentive motorist disregards a stop sign and places his 2007 BMW directly in the path of the limo. The impact is severe. The chauffeur does an excellent job of maintaining control, but the limo still ends up in a ditch on the side of the road.
Some passengers are ejected; all are injured to some degree. The BMW driver and his passenger are seriously injured, and the scene, putting it bluntly, is a bloody mess. The police, ambulances, fire department and wreckers respond. Fault can’t be immediately determined; there are witnesses to interview, measurements and photos are required for the police reconstruction, but the police are, rightly so, more concerned with getting help for the injured and clearing the scene to avoid additional accidents.
Fortunately, our policyholder listened to our message to report all losses promptly and had effectively delivered the message throughout his organization, The chauffeur contacted his dispatcher via cell phone within minutes of the accident and then the dispatcher called our toll-free 24-hour claim reporting number. Immediately thereafter, Lancer’s Vice President and Western Division claims manager, Bob Burns, was on the phone with the driver, dispatcher, a local investigator and accident reconstruction engineer and a defense attorney within ten minutes of the first call. Resources were rushed to the scene and a catastrophic loss management plan was implemented at the onset. The plan priorities were very clear and were immediately acted upon.
Teamwork Is Critical
Setup a communication system — The team involved Burns, the investigator, the attorney, the accident reconstruction engineer, the driver, management at the limo company, the passengers and the police. This coordination process is much more complex to accomplish than it sounds, especially when you’re dealing with several injured passengers. On-scene personnel must coordinate communication through a central management source. Bob Burns, having managed many multiple passenger injury limousine cases and having worked with this same response team in the past, managed the process via frequent conference calls, clear instructions and quick analysis by the attorney and engineer as each “next step” was evaluated.
Establish passenger needs
Medical attention, shelter, telephones, replacement transportation, money… the sudden disruption to a carefully planned trip requires that these, and many other areas, be addressed, including retrieval and securement of personal items. This case involved the delicate balance of taking care of passenger needs, while conducting a liability investigation that required obtaining passenger written or recorded statements detailing where they were seated, what they saw and what they heard. We were able to get what we needed by having the right number of investigators on scene, a consistent approach with each passenger, readily available aid and assistance for the group and by taking advantage of the already existing sense within the passenger group that they wanted to protect the chauffeur and ensure blame was placed where they knew it belonged — with the driver of the BMW!
Get the facts
It’s important to record the facts and, as importantly, preserve them so they will hold up in court. Forward thinking must begin at the first phone call, and every step of the response must give consideration to what is admissible in court at a later date. Evidence must be preserved with this in mind. The direction of an attorney at the scene insured this would happen. As the investigators prepared to obtain statements, take photos and gather data, the attorney and the accident reconstruction engineer were able to provide specific instructions on the approach they should take including: what questions had to be asked; how they should be phrased; and the types of photos that would help the defense should they someday need to he shown to a jury.
Assist the police
Sometimes the best way to assist is simply staying out of the way. In other instances, such as this one, the police accepted our offer to assist them. There were eyewitnesses who confirmed the BMW ran the red light and the limousine driver had no chance to avoid the impact. The Lancer adjuster and attorney directed them to the police to ensure their identity and detailed versions were reported. Priorities after any accident include, where necessary, moving vehicles to reduce ongoing hazard and tending to the injured. In this case, however, the police agreed that the vehicle movement could be safely delayed until the engineer obtained crucial measurements.
Protect the chauffeur
You want a clear-thinking company representative on the scene, so getting your driver calmed down before he gives a statement to the police is critical. This process was initiated over the phone within minutes of the report and continued throughout the investigation.
Unlike other accident types, passenger transportation losses involve drivers who can become very emotional given the number of people injured, and the immense responsibility they usually feel for the safety of their passengers. With credibility, we were able to tell the limousine driver: “We’ve done this before we know what you’re going through, and we’re here to help you.” The chauffeur‘s response in this claim actually helped in the final outcome.
This is a real wild card, as it is usually impossible to determine if they’ll even respond to an accident scene, Responses can vary from a single reporter, to helicopters and live cameras. It is essential to have a media response plan in place. Of course, the worldwide web picked up the accident news and within hours there were 50 or so sites posting the story. Within days that had grown five-fold. Several web articles were filled with misinformation. We worked with our policyholder to determine which were best ignored and which needed to be addressed. Our instructions were repeated to everyone representing the limousine company. The result? The media lost interest and left after minimal intrusion into the situation.
Protect the reputation of the limousine company
You will be hit with a barrage of questions…
“Who is the driver? How long has he been driving professionally? Was he tired? Has he ever driven a limousine like this one? Why didn’t the limo company select a better chauffeur? How many accidents have they had? What are they doing to take care of their passengers? Is their equipment safe?”
These and many other questions directly challenge the credibility of your company and must be dealt with quickly. Some should be answered immediately, others should not be. A key part of our loss response includes direct involvement of a Lancer Regional Safety Manager and Bob Crescrenzo, Lancer’s Vice President of Safety.
The driver qualification file, vehicle maintenance file, regulatory inspection reports and all related documents were reviewed in detail. We were able to present the limousine company as caring, compliant and responsible, all of which made the difference in preserving its reputation in the community and with its customers. This review helps in another way; it established exactly what would be necessary to defend against allegations made against us pertaining to company operations by lawyers at a later date.
Protect the limousine company’s financial interests — Beyond your business reputation.
This protection includes making arrangements for prompt repair of your vehicle so that your downtime is minimized. We also assisted the policyholder in recovering money from the BMW’s insurance carrier relating to its uninsured business loss.
Ongoing case management
This is an area in which passenger transportation vehicle losses are very different from other accident types. Passengers involved in this accident required follow-up contact to determine injury status, and to obtain statements pertaining to what happened if they had not been interviewed at the scene. We have in place a network of field staff and designated local investigators who responded immediately. In some situations, investigators actually met returning passengers as they arrived home or at other destinations.
Once fault is determined, it is necessary to direct claiming parties (including your passengers) to the insurance carrier responsible for paying their claims. The communication link that had been established on this loss made that an easy process. And, as mentioned earlier, we were able to get our policyholder paid for their loss promptly and with minimal disruption to his business.
When the lawsuits showed up, (and they did…), the plaintiff lawyers were hit hard with the result of our investigation which clearly showed the chauffeur and the limousine company were negligent-free. If you’re wondering if the expenses relating to the response were justified, consider this: each and every plaintiff lawyer that attempted to make a claim against the limo company dropped his claim after seeing the extent of our investigation and after giving consideration to the cost he would incur in attempting to build a case that could beat ours. No lawsuits meant no litigation defense costs, no indemnity payments to the claiming parties and a file that was closed, and has stayed closed.
Contenders vs. Pretenders
When you get a chance, take the time to have your internal crisis management plan expanded to ensure it covers serious accident response. If you handle your own claims under your deductible, evaluate your serious loss response process and make sure it addresses the areas captioned in this article. Is it worth the time? You’ll have to answer that one yourself…hopefully before the phone rings and your worst nightmare becomes a reality.