The Restaurant Liability Demand and the 'All Claims' Contract

Probably not, at least not without a clear legal basis and the insurer's and defense counsel's involvement. The core issue is that this is a third-party liability claim, not a first-party property claim. The CGL insurer's duty is to defend and indemnify the restaurant; defense counsel controls the defense and any settlement that would bind the insurer. A public adjuster generally represents the insured in preparing and negotiating first-party claims. Even if the New Mexico public adjuster license is broad enough to include casualty claims, the adjuster cannot settle a third party's personal injury claim on behalf of the restaurant without authority from the insured and cooperation with defense counsel, and doing so may amount to the unauthorized practice of law. The adjuster also has no appointment from the CGL insurer and no liability experience. The 'all claims' language in the contract does not override the insurer's control of the defense or create authority to practice law. The adjuster should not call the claimant's lawyer to negotiate a settlement.

The adjuster should decline the 15% 'savings' fee. A fee based on reducing a liability settlement creates a direct conflict: the adjuster would be rewarded for pressuring an injured claimant or for settling without adequate investigation, and the fee is outside the first-party property work the adjuster was retained to perform. The adjuster should explain to the owner that the CGL insurer has assigned defense counsel, that defense counsel is the proper channel for the demand, and that the owner should immediately forward the demand and all related documents to defense counsel and the insurer. The adjuster can offer to coordinate documents and deadlines, but should not negotiate liability or give legal advice. The contract should be amended in writing to remove 'third-party claims' from the scope, or the adjuster should decline the engagement if the owner insists. The conversation should be documented, and the adjuster should not accept any payment tied to the liability claim.

The adjuster should treat the two claims as separate files with separate authority. For the liability claim, the adjuster should send defense counsel a written summary of the facts known from the water-loss remediation, identify witnesses and cleanup records, and confirm that counsel is handling the demand. The adjuster should not communicate with the claimant's lawyer except as authorized by counsel. For the property claim, the adjuster should continue to document the water damage, the cost of cleanup, and any business-income loss, while recognizing that the liability claim may overlap with the same facts. The adjuster should avoid statements in the property claim that could be used against the insured in the liability case, and should not disclose the liability demand to the property adjuster unless relevant. The adjuster should also confirm whether the CGL policy's medical payments coverage is being considered, since the $10,000 limit may resolve part of the claim without a liability determination. All communications and the owner's authorization should be documented.