At the 2016 ACE Conference, Bob Wiese from Disneyland Resort discussed the differences between traditional insurance and self-insurance when it comes to liability claims.
One of the biggest advantages of being self-insured for liability claims is that you get to define what claims you are going to handle and how you will handle them. You are not bound by policy language defining what is covered. This allows you to have a more customer-service focus with your liability claims handling program. .
Some examples of things Disney does include:
- Public relations settlements. Often times they will do things from a public relations standpoint such as offering park tickets or free meals where there is no liability. They resolve over 50% of their claims with no payment other than offering some complimentary item at the park.
- Compassionate Care. This involves sending someone to assist a guest when they had a medical emergency at the park. It has nothing to do with liability but instead is about customer service. So if a guest has a heart attack at the park Disney will often follow up with the family at the hospital to offer support and assistance.
- Paying a little more to avoid lawsuits. Disney wants to avoid lawsuits because of the public relations issues associated with them so they will pay more to avoid these lawsuits. This is especially true if someone is not represented by an attorney.
- Willingness to “do the right thing”.
- Maintain flat denials for suspected fraud, inflated claims, and no liability claims. If claims are unwitnessed and not reported immediately they deny them and will not offer any type of public relations type settlement. They do not want to encourage fraudulent behaviors. People often claim that an incident occurred and try to get park tickets because of this incident.
- Work closely with safety to address issues. Safety and claims need to work hand in hand to identify issues and make sure they are addressed immediately.
About 10% of Disney guests have some type of “incident” at the park. This can be anything from a minor medical issue to a problem with service or their room. About 10% of these incidents actually become claims. 2% of their claims end up in litigation and they are very successful in claims that go into litigation because they make every effort to reach a reasonable settlement before litigation.
The benefits of self insurance to Disney include protecting their brand reputation and ensuring customer service is a focus point for every decision.
When you are self-insured it is important that you have an excess policy to protect you from large losses. The excess policy will provide for reimbursement for payments above a certain level. It is important that your excess carrier understands your approach and that you work closely with then on any large losses.