In the last newsletter we left off by asking if a contractor could get investigated by DoLI for writing a cover letter for an insured customer which winds up in the hands of their insurer. The answer is very Minnesotan: “ You betcha!”.
The unpleasant truth is that there are insurers out there that will file complaints with DoLI at the slightest provocation and even with no probable cause to think that any violation has actually occurred. In this author’s view, this is a business tactic intended to “teach” the contractor that the particular insurer is difficult and expensive to deal with. This tactic is viable for the insurer because DoLI is not particularly adept at discerning which incoming claims are motivated by a real concern that a violation has occurred and which are being used to further the insurer’s business interests. We all know that once in your file DoLI will “fish” for any violation it can find and which may not have anything to do with what the insurer has complained about. The insurer knows this too, hence the beauty (to them) of complaining about anything or even nothing at all.
Want to know what is really beautiful? The insurer believes they can make spurious complaints with impunity because they can hide behind a public policy that keeps their identity and the nature of their complaint secret. The contractor is left to “infer” who made a complaint and what they complained about by reading between the lines of the notice of investigation they received from DoLI.
The curious and furious contractor might wonder: What about due process? What about the costs of defending myself? What about the insurer intentionally trying to damage my reputation with DoLI or the BBB? What about DoLI dragging my customer into the investigation? All good questions and nary a judge in the country has dealt with these issues. There is precious little case law involving one business entity using a government agency’s investigative powers and tactics to harm another business entity. But, new precedents and laws have to start somewhere. There are business and equitable theories that can be used to make claims against such an insurer. You just don’t need to be the test case, unless you need to be the test case.
The better approach (until we can get the industry to apply some pressure to get DoLI to investigate only legitimate complaints or create a cause of action against punitive complainers) is to keep your distance from insurers inclined to do their business by driving you out of yours.
We can help with this. Give us a call.