Question by Rachel : Can a claims adjuster recommend Small Claims Court? Hi, I recently became a claims adjuster for a TPA. One of our clients has several claims from the same company, all for relatively small property damage ( <$ 2500 each). The claims all occurred about 2 years ago, and the information the claimant is giving us and what our insured is giving us is totally opposite and we're never going to reach an agreement--largely because nobody can remember what happened 2 years ago. The claimant is totally fed up with our insured, and I can kind of see his point. But our insured won't allow it and I don't think they want to pay a dime. Would it be wrong to call up the claimant sort of "off the record" and suggest he pursue action in Small Claims Court? Do I have to issue denials first? Would that be considered bad business? Thanks,
Answer by mbrcatz
Yes. It would be completely wrong and unethical for you to do this. YOUR duty of good faith, is to protect your client. If you do this, to screw your client over, you are violating your duty to protect your client.
You do NOT have to issue a denial to a third party. You have no duty of good faith towards that third party. Now, if company procedure is to issue that denial, feel free. But you CANNOT ethically give legal advice (without a law license!) to a third party who potentially will be suing YOUR CLIENT.
Yikes. You do that, your client can – and will, if they find out – sue you for breach of good faith, and they’ll win.
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