Gallagher Bassett: Accident Claims and Settlements

Dealing with This Third Party Administrator in Accident Cases

Many people - including lawyers - negotiating claims with Gallagher Bassett just assume they are an insurance company. Gallagher Bassett is not an insurance company, but it operates as a “third-party administrator.”  This means that they handle the claims process for companies that are self-insured.  In other words, Gallagher Bassett serves as a "rent an insurance adjuster" for smaller insurance companies and companies, hospitals and schools that are self insured. Hartford Financial Services Group, Catholic schools and charities, Lafarge North America and many Maryland schools are just a few of the thousands of clients Gallagher represents.  It is continually increasing its client base, extending to small and mid-size business.  For those and other clients, Gallagher Bassett will handle the claims process for automobile accidents, workers’ compensation cases, premises liability (including slip and falls) and other injuries.

Background

The company was formed in 1962 and now has approximately 3,400 clients, 4,500 employees and 100 offices in the United States.  They do many of the things that traditional insurance companies do:  field investigations after report of an accident, setting reserves for claims, coordinate with lawyers defending their clients’ claims, and working towards settlement.  The main difference between Gallagher Bassett and a typical insurance company is that Gallagher Bassett competes for its clients’ business, so it has an extra incentive to save money in settlements, perhaps more incentive than the average insurance agent.    

Competition

Gallagher Bassett is one of the top third-party administrators by revenue.  According to Business Insurance, the following third-party insurance companies were ranked by revenue for claims handled for self-insured clients:

  1. Sedgwick Claims Management Services, Inc.:                     $808,152,678
  2. Gallagher Bassett Services, Inc.:                                        $401,900,000
  3. UMR, Inc.:                                                                           $393,949,776
  4. Broadspire Services, Inc.:                                                   $236,467,690
  5. ESIS, Inc.:                                                                           $195,400,000
  6. Meritain Health:                                                                  $193,000,000
  7. CoreSource, Inc.:                                                               $  86,619,141
  8. York Risk Services Group Inc.:                                          $  86,000,000
  9. Wells Fargo:                                                                      $  74,512,426
  10. Canon Cochran Management Services:                            $  67,500,000

In 2010, Gallagher Bassett was also the second largest third-party administrator for workers’ compensation claims (calculated by revenue paid for claims), just after Sedgwick.  In Maryland, our lawyers see Gallagher Bassett more frequently than we see Sedgwick in accident claims.

Litigation

In addition to dealing with pre-litigation claims, Gallagher Bassett also may be called to help with cases in litigation (after a lawsuit has been filed).  Their legal management services division assists companies in controling the costs of litigation by providing bill review and budgeting guidance.  Gallagher Bassett helps its clients to continually evaluate the efficacy of lawsuits, and the efficacy of law firms who provide the defense.  This means that even if settlement was not possible before a lawsuit was filed, it may still be possible before trial. 

Dealing with Gallagher Bassett on Injury Settlement Claims Before Filing Lawsuits

Gallagher Bassett is a bit harder to handicap than other insurance companies in terms of how reasonable they will be for settlement because we think they craft their strategy around their client. But, generally speaking, our lawyers find that it is hard to settle an accident claim with Gallagher Bassett. While their adjusters are competent, they seem to have very little independent authority. The key for accident attorneys is to flush them out to find out what their maximum settlement authority is on the file and then figure out whether that works for your client. More often than not, the answer is no and a lawsuit is the only solution.

Dealing with Gallagher Bassett on Injury Settlement Claims After a Lawsuit is Filed

Gallagher Bassett typically gets more reasonable after a lawsuit is filed. Companies using Gallagher do not have in-house counsel to defend their cases. So attorneys' fees become an issue after a lawsuit has been filed. This reality allows Gallagher Bassett's client to get serious about evaluating the case before it goes to the next level. Again, this is a broad generalization that varies by company and by the advice and evaluation Gallagher Bassett is giving with respect to the settlement value of the claim.

Hiring a Lawyer to Take on Gallagher Bassett

If you have been injured in an accident in Maryland where the at-fault company is self-insured and uses Gallagher Bassett, call us at 800-553-8082 or click here for a free consultation.

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