Expert Witness Consulting in Insurance and Risk Management and Its Relationship to Research, Service, and Teaching
TASA ID: 1747
Oftentimes, insurance and risk management (IRM) professors are asked to serve as either a consulting or testifying expert witness in insurance litigation. Since 1997, I have been retained in about forty cases, primarily by insurance carriers, policyholders, and insurance agents/brokers. These cases typically involve determining the existence of a breach of contract; evaluating the handling of an insurance claim (i.e., whether the insurance carrier acted in bad faith); and evaluating whether an insurance agent/broker breached his or her professional responsibility to a client. Like any competent expert witness, I have testified on behalf of both the plaintiff and defendant. Insurance contracts at issue include commercial general and umbrella liability, commercial property, commercial automobile, homeowners, personal auto, surety bond, financial institution bond, builder's risk, and individual health and life insurance.
Naturally, university administrators and faculty may question whether expert witness work contributes to the mission of the IRM program, college of business, and/or the entire institution. Such particularly is the case in view of the fact that expert witness work is lucrative. What then is the relationship between expert witness consulting and research, service, and teaching? In short, serving as an expert witness furthers the university's goal of creating and sharing knowledge with society.
Research
First, a research article that you publish may "catch the eye" of an attorney. After seeing my article on "redlining," an attorney contacted me to inquire about doing some expert witness work. The attorney represented an insurance carrier in a legal case involving underwriting practices. Although I was not retained in this particular case, this example illustrates how research is intertwined with expert witness consulting. Had I been retained, my research would have been relied upon to address a legal dispute. Agreeing to serve as an expert witness would have furthered the university's goal that its faculty's research be applied for the benefit of society.
Second, articles that have been published by the expert witness are sometimes referenced in a deposition. One instance was a legal case involving the interpretation of a public official bond; opposing counsel requested that I produce all articles published during the course of my professional career. I referenced the custom and practice of inserting provisions in insurance contracts and surety bonds that serve the purpose of controlling morale hazard. Several of my articles in which this custom and practice were referenced were cited for illustrative purposes.
Third, once a legal case has been brought to resolution, depending on its nature, an article may be published based on the case, especially if a court makes a ruling on the various pertinent issues. As an example, I was retained in a legal case in which the key issue was whether the applicable builders' risk policy constituted inland marine insurance or property insurance. The Court ruled in favor of the carrier, based on its conclusion that the policy constituted inland marine insurance as opposed to property insurance. As a result, I was able to publish articles related to this case, in insurance and risk management publications, further contributing to the university's goal.
Expert witness work also provides opportunities to develop relationships with various attorneys, who in turn may be helpful to you. The attorney who contacted me about the aforementioned "redlining" legal case introduced me to his colleague who represented a trade association on proposed legislation pertaining to asbestos litigation reform. Using largely data obtained from this attorney, I was able to publish articles addressing asbestos litigation reform in relevant publications.
Fourth, an expert witness is often asked to review numerous documents and prepare a report or affidavit that addresses the issues in a legal case. Judges and/or attorneys rely on these reports or affidavits so that the case can be appropriately resolved. The research skills utilized in drafting the report or affidavit are essentially the same skills utilized in preparing an article for publication. An IRM professor can take advantage of highly developed research skills and apply them not only for the purpose of publishing articles, but also to assist others who are involved in a legal dispute.
Service
Service at virtually all universities is defined broadly to include not only service to the school itself, but also service to the general public. It extends well beyond the preparation of students to become productive members of society. Indeed, a university - especially one that relies on government funds - has an obligation to serve taxpayers in general, specifically, to individual members of society, members of the business community, and local units of government. This obligation includes "loaning" a faculty member for the purpose of helping address a problem, and given the global nature of society, it should have broad application, not just in one's home state but throughout the country and possibly farther.
Clients in various legal cases in which I was retained include: (1) an insurance agency that historically has hired graduates of the university's IRM program and which has provided support to the program in other tangible ways, (2) a prominent member of the local business community who has paid substantial state and local taxes over the years, (3) a small town that had a coverage dispute, and (4) a homeowner who had the unpleasant experience of interacting with a rogue adjuster concerning a claim.
Teaching
Courses in an IRM curriculum address, among other topics, risk management concepts, requisites of an insurable exposure, and the custom and practice concerning: (1) interpretation of insurance contracts and surety bonds; (2) handling of insurance and surety claims; and (3) an agent's or broker's responsibility to a client.
First, reference to legal cases is an important tool in teaching the above items to students. For example, in one case in which I was retained by an attorney who represented an insurance agent, I testified that the agent was justified in not recommending that a client purchase professional liability insurance. A warehouse legal liability policy that had been secured by a broker was designed to address the loss in question. The purchase of professional liability insurance, therefore, would have resulted in unnecessary duplication of coverage. Avoidance of unnecessary duplication of coverage through the proper design of an insurance program is an important risk management concept that is taught to all IRM students.
Second, many IRM graduates pursue professional careers in sales and claims. Legal cases in which a claims representative acted in bad faith in the handling of an insurance claim or an insurance agent/broker breached his or her professional responsibility to a client remind students about the consequences of failing to meet the applicable legal standard. I recall being contacted by an attorney who represented an insurance agent who happened to be a former classmate and close friend. Due to a conflict of interest, I was not retained but did learn from my friend of his regret in failing to document several communications with the client. Of course, this lesson was relayed to students in my courses, some of whom undoubtedly will become insurance agents/brokers.
Third, serving as an expert witness helps one refine teaching skills and think in a more precise way about important insurance and risk management concepts. For example, in depositions conducted by opposing counsel, an expert witness is expected to explain clearly the application of IRM concepts to the legal case in question. Unfortunately, particularly at the undergraduate level, students often fail to challenge their IRM professors. The tragic result is that an IRM professor may become deluded into thinking that he or she has all the "right answers." These professors may fail to study carefully the application of important IRM concepts and one day may become ineffectual.
Fourth, similar to those with CPCU designations, all professors of IRM should seek continually to maintain and improve their professional knowledge, skills and competence (Canon 2, Code of Professional Ethics of the American Institute for CPCU). While keeping informed on technical matters relating to course content in an IRM program does not ensure success at teaching, at a bare minimum, technical proficiency is absolutely essential if one is to be an effective educator. Serving as an expert witness is one way for an IRM professor to meet the aspirational goal, expressed under the canon, of improving his or her professional knowledge, skills and competence.
In summary, expert witness work is fully consistent with and supports a university's mission with respect to research, service, and teaching. While most universities do not actively discourage this kind of activity, they fail to understand and recognize the link between expert witness work and the university's mission. Clearly, in failing to actively encourage IRM faculty to engage in expert witness work, a university detracts in a tacit way from its mission.
This article discusses issues of general interest and does not give any specific legal or business advice pertaining to any specific circumstances. Before acting upon any of its information, you should obtain appropriate advice from a lawyer or other qualified professional.
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