Modern businesses face mounting pressures to manage risk effectively while maximizing operational efficiency. Insurance represents one of the largest annual expenditures for most companies, yet it remains one of the least understood corporate assets. Smart leaders who treat insurance strategically can unlock significant value, while those who don’t often discover costly gaps when they need coverage most.
Here are three important points every in-house attorney and business leader should know about corporate insurance policies.
1. Treat Insurance Purchases Like Corporate Deals
Most companies approach insurance renewals backward. While they would never sign a multi-million-dollar vendor agreement without legal review, they routinely purchase insurance policies with minimal legal oversight. This disconnect can leave substantial value on the table.
Insurance policies are contracts that must be renewed annually, often involving premium outlays in the millions of dollars. Yet unlike other corporate agreements, insurance purchases typically involve only a risk manager and broker, with legal counsel rarely participating in the process. This creates a fundamental mismatch between the transaction’s importance and the resources dedicated to it.
What’s missing is someone who can review each endorsement, exclusion and definition to ensure the company is actually buying meaningful protection.
Companies that involve legal counsel in their insurance purchases gain a critical advantage. Legal teams can identify coverage gaps, negotiate more favorable terms and ensure the policy language aligns with the company’s actual risk profile. This approach transforms insurance from a necessary expense into a strategic asset that supports business objectives.
2. Understand What Constitutes a Claim and When to Report It
The most common and costly insurance mistakes involve claim reporting failures. Many policies use “claims-made” coverage, meaning the formal claim must occur during the policy period. Missing reporting deadlines can void coverage entirely, regardless of the claim’s merit.
The definition of “claim” extends far beyond just lawsuits. Under most policies, a claim can include written demands for monetary relief, regulatory subpoenas, civil investigative demands or even business emails requesting documents under a claim of right. Courts have found that vendor communications demanding contract performance can trigger claim reporting requirements.
The consequences of late reporting are severe. Insurance companies can deny coverage simply by proving the claim was reported after the policy expired, without demonstrating any prejudice from the delay. Recent litigation involving major companies shows that even one-day delays can result in complete coverage denials for claims worth millions.
The solution is systematic claim identification and reporting. Companies should educate all staff about what constitutes a potential claim and establish clear escalation procedures. When in doubt, report immediately. Reporting a non-claim has no downside, but failing to report an actual claim can eliminate coverage entirely.
Best practices include implementing quarterly bordereau reporting, where all potential claims are documented and transmitted to carriers regularly. This approach eliminates the stress of last-minute reporting and ensures nothing falls through the cracks during policy transitions.
3. Approach the Claims Process Strategically
When a claim arises, many companies treat their insurance company as an adversary rather than a business partner. This approach undermines the relationship and can negatively impact coverage decisions. Remember that you’ve paid substantial premiums to purchase an asset designed to respond during your business’s most challenging moments.
Every insurance claim tells a story, and the narrative you present can significantly influence the outcome. Insurance companies have coverage counsel involved from day one, often before sending any formal correspondence. Many reservation-of-rights letters and coverage denials are drafted or reviewed by lawyers before reaching the policyholder.
Companies should level the playing field by engaging qualified counsel early in the claims process; however, this must be done carefully to preserve attorney-client privilege. Communications between policyholders, brokers and coverage counsel can inadvertently waive privilege if not properly structured.
Successful claims management requires building the right team, maintaining detailed records and understanding that insurance companies approach every claim with legal counsel already engaged. Companies that recognize this reality and respond accordingly position themselves for better outcomes.
The key is collaboration between legal counsel and experienced brokers who understand both coverage nuances and carrier relationships. This partnership allows companies to advocate effectively while preserving important legal protections.
Next Steps
Review your insurance purchase process. Ensure legal counsel participates in policy renewals, particularly for directors and officers, employment practices, cyber and professional liability coverage.
Implement systematic claim reporting procedures. Train staff to recognize potential claims and establish clear escalation protocols with defined timelines.
Establish quarterly bordereau reporting. Work with your broker to implement regular claim reporting that eliminates last-minute deadline pressures.
Build relationships before you need them. Identify qualified insurance coverage counsel and establish protocols for engaging them when claims arise.
Audit your current policies. Conduct a comprehensive review of existing coverage to identify gaps, understand definitions and ensure alignment with your risk profile.
Document everything. Maintain detailed records of all communications and decisions related to insurance purchases and claims to support future coverage positions.
For additional information about insurance recovery and counseling strategies, please contact Bradley Dlatt or your regular Lathrop GPM attorney.
This legal alert summarizes a presentation from Lathrop GPM’s annual State of Litigation event, held on May 6, 2026, in Kansas City. Bradley Dlatt was joined for this presentation by Carlton Callenbach, Litigation Counsel at Lockton Companies.