Claims & Litigation
What the exam tests
Claims and litigation risk management spans the life of a claim from incident to closure. Candidates must distinguish an incident (an event that may cause loss), a claim (a demand for compensation), and a lawsuit (filed litigation). Most incidents never become claims, and most claims never become suits.
Core concepts
- Notice and investigation. Investigate promptly (many organizations use a 24–72 hour benchmark), preserve evidence (devices, EHR audit trails, staffing records), and interview witnesses while memory is fresh. Spoliation of evidence can create liability independent of the original event.
- Statutes of limitations. Deadlines vary by state and cause of action and may be tolled for minors, incapacity, or the discovery rule. Never assume the clock starts on the date of injury.
- Claims-made vs. occurrence coverage. A claims-made policy responds only if the claim is reported during the policy period; occurrence coverage responds if the incident occurred during the period regardless of when reported.
- Reserving and settlement authority. Reserves are actuarial estimates, not admissions. Settlement typically requires organizational authority and, under claims-made policies, insurer consent.
- Privilege protections. Incident reports, peer review files, and RCA documents may be protected by state peer review statutes and attorney work product-but protection is not automatic and varies by state.
Traps
Questions conflate incident reporting with claim reporting, assume a lawsuit exists when only a claim does, or assume a settlement requires physician consent. Watch “first step” items-usually preservation and investigation, not discipline.
Rule of thumb
If it is unclear whether an event is a claim, treat it as a potential claim: notify the insurer or captive early, preserve evidence, and document the investigation.