Sedgwick: Achieving Better Claims Outcomes Through Preparation and Planning

By Richard Hayman | Technical Director – Marine Global Speciality Marine

Claims handling is often described as the moment of truth for an insurance policy. No matter how well a product is sold or a contract is negotiated, the claims experience ultimately defines success or failure for the insured. Decades of the frontline of claims management show that many claims issues stem from avoidable mistakes.

Below are some of the most common errors in claims handling and how organizations can avoid them.

The most fundamental and damaging mistake in claims handling is failing to review the policy in full at the outset. A policy must be understood in detail before any assurances are given. Coverage, exclusions, limits and conditions all matter. Overlooking even one clause can lead to incorrect conclusions. When a claimant is told early that a policy is likely to respond, only to learn later that it does not, the damage is lasting. Frustration escalates, complaints arise, and trust is lost. Getting it right from the beginning requires slowing down, reviewing the policy carefully and confirming whether coverage applies before expectations are set. Speed matters, but accuracy matters more.

Closely tied to poor policy review is the mistake of setting unrealistic expectations. Many claimants are experiencing a loss for the first time and are unfamiliar with insurance terminology, processes and timelines. They often seek reassurance, which must never replace accuracy. Clear and honest communication from the start helps manage expectations. Even when the news is unfavourable, transparency allows all parties to understand their position and plan accordingly.

Behind every claim is a person or business that has suffered a loss. One of the most common mistakes in claims handling is forgetting that reality. Empathy does not mean agreeing with every demand or paying claims outside coverage. It means acknowledging the claimant’s situation, explaining the process clearly and treating people with respect. How a claimant is treated during the process often drives complaints. Starting with humility and empathy helps build trust, even in difficult situations.

Claims teams often include highly qualified professionals such as engineers, surveyors and technical specialists who may have limited experience with insurance claims. A frequent mistake is assuming technical expertise automatically translates into effective claims handling. Successful training emphasizes experience, role clarity and understanding purpose. Everyone involved must understand their role, who they represent and what outcome they are working toward. Claims handlers must balance the needs of multiple stakeholders while ensuring the policy performs as intended. Ongoing training and mentoring are essential, particularly as claims environments grow more complex.

Another common issue is the lack of strong internal review procedures. Even experienced claims handlers make mistakes. That is why reports, recommendations and assumptions must be reviewed before they are finalized. Documentary evidence should support all conclusions, and findings must align with policy terms. Double and triple checking work is protection. In claims handling, 100 things can be done correctly, but a single error is often what people remember.

Some claim types, including goods-in-transit claims, highlight how risky it can be to underestimate complexity. These claims may involve international conventions, statutory and common law, bailment principles and contractual obligations, all interacting at once. A common mistake is focusing on one element while missing the broader legal and contractual framework. Claims handlers must understand how policy liability aligns with contractual responsibility to prevent coverage gaps and disputes. Knowing the product and the environment in which it operates is essential.

Claims do not operate in isolation. Brokers, insurers, third-party administrators and clients must work together. When communication breaks down, misunderstandings increase and issues escalate. Joint trainings, open dialogue and shared expectations support smoother claims outcomes. When all parties understand requirements from the outset, surprises are minimized.

Technology has transformed claims handling, from digital reporting to video evidence and artificial intelligence. However, a common mistake remains the assumption that technology replaces fundamentals. Processes have not changed as much as many believe. Reviewing the policy, validating evidence and applying sound judgment remain at the core of effective claims handling. Technology supports these processes but does not replace them.

When handling thousands of claims each year, small mistakes can have significant consequences. Reputations are built or lost based on how claims are handled. Honesty, diligence, experience and empathy remain the foundations of effective claims management. Avoiding common mistakes is about consistency, professionalism and delivering the correct outcome for all parties involved. In claims handling, getting it right the first time is essential.

Find Out More: Visit mgaa.co.uk/members/sedgwick-international-uk