Seeing Around Corners – The value of anticipating risk in liability claims

A chess grandmaster sees more than the next move. A minor repositioning of a piece may reveal an emerging threat, an opening that will matter several moves later, or a plan that is unlikely to succeed. The advantage comes from recognizing those possibilities early enough to choose a response. Sometimes that means acting decisively. Sometimes it means making a small adjustment or waiting for better information.

Liability claims demand a similar discipline. A developing legal theory, an unusual discovery request, a shift in plaintiff counsel’s approach, or a change in the credibility of a witness may seem manageable in isolation. Together, those signals can indicate that the claim is moving toward a different outcome than the one contemplated in the initial evaluation.

The difficulty is rarely a complete absence of information. It is recognizing when familiar information has acquired a different meaning, and understanding how that shift could affect exposure, litigation strategy and ultimately, the outcome of a claim.

When the claim begins to change

A negligence dispute may begin with a narrow question about the circumstances of an accident. As litigation develops, discovery turns toward hiring practices, training, supervision, prior incidents, or management decisions. The underlying event has not changed, but the theory being advanced and the evidence needed to defend it have.

A claims team that continues to follow its original plan may complete every scheduled activity and still lose ground. Critical documents may not be preserved soon enough. The right witnesses may not be interviewed while memories are fresh. A valuation that was sound three months earlier may remain in place after its assumptions have weakened.

This is one of the more consequential distinctions in litigation management: activity can remain on schedule while the strategic position deteriorates. Effective litigation management requires regularly testing the assumptions supporting the strategy, evaluating new information as it emerges and adjusting course when the circumstances warrant it.

Experience needs discernment

Experience gives claims professionals a substantial advantage. It builds familiarity with injury patterns, attorney behavior, venue characteristics, medical development, and the ways disputes tend to unfold. But experience can also encourage an overly quick comparison with the last similar claim. The danger is treating resemblance as proof that the same result will follow.

Perceptiveness identifies the change. Pattern recognition connects it to other developments. Anticipatory thinking considers what may follow. Discernment determines which possibilities deserve attention, and adaptive judgment changes the response as the evidence develops. None of these capabilities requires certainty. They require calibrated confidence: enough conviction to act when the evidence warrants action, and enough humility to revise the decision when it does not.

For example, a new set of discovery requests may suggest that plaintiff counsel is preparing a broader corporate-conduct theory. That observation should prompt specific questions. Is the existing preservation plan sufficient? Does defense counsel need a different expert or witness strategy? Has the exposure assessment accounted for the new theory? Is an earlier resolution discussion now more attractive, or would it be premature? The value of the observation lies in the decisions it changes.

Data and analytics can strengthen this process by helping claims professionals recognize patterns that may be difficult to identify within an individual claim. Changes in litigation behavior, claim severity, settlement trends or other emerging indicators can provide valuable context for evaluating exposure. Combined with the experience and judgment of claims professionals, these insights can support earlier intervention, more informed strategies and better decisions throughout the life of a claim.

Signals across the liability environment

Several developments make this discipline increasingly important. Plaintiff strategies that emphasize organizational conduct can enlarge the scope of a dispute. Social inflation and the possibility of outsized verdicts can affect settlement expectations even when few cases ultimately reach a jury. Third-party litigation funding, where present, may change the economics and duration of a case. Emerging product and environmental allegations can turn a seemingly isolated claim into an early indicator of broader exposure.

These influences should not be presumed in every file. A funding arrangement, for example, should not be inferred merely because negotiations are difficult. The task is to distinguish a plausible signal from an established fact, then assess whether it changes the most probable outcome or the realistic downside.

The organizational blind spot

The first person to notice a meaningful shift may be an adjuster handling an ordinary claim or defense counsel responding to a novel request. That observation may have implications well beyond the file. A similar allegation could be emerging in another jurisdiction, another client program, or a different line of business. Yet claims organizations often store these insights in individual claim notes, legal reports, or informal conversations where they are difficult to recognize as part of a pattern.

A useful operating model gives frontline professionals a way to elevate unusual developments, tests those observations against other claims and available data, and returns the resulting insight to the people making decisions. The broader the visibility across claims, the greater the opportunity to recognize patterns that may otherwise go unnoticed. Advanced analytics can help identify changes in litigation behavior, emerging exposure trends and other developments that warrant closer examination.

At Sedgwick, we see significant value in bringing together extensive claims data, advanced analytical capabilities and the experience of our claims professionals to help clients better understand their exposures and make more informed decisions. The purpose is not to turn every exception into an alert. It is to separate isolated noise from developments that merit a change in investigation, litigation posture or client guidance.

That also changes what leaders should ask in claim reviews. Alongside reserve adequacy, diary compliance, and litigation milestones, the discussion should include which assumptions have changed, what new evidence could alter the assessment, and which decisions will become harder or more expensive if delayed.

Building anticipatory judgment into claims management

Developing this capability requires more than encouraging claims professionals to think ahead. Organizations need processes that make it easier to recognize emerging signals, share observations and translate those insights into timely decisions. That may include establishing clear escalation criteria for unusual litigation developments, incorporating forward-looking questions into claim reviews and creating opportunities to evaluate emerging patterns across claims and jurisdictions.

Equally important is maintaining a willingness to challenge earlier assumptions. An initial assessment may be entirely reasonable based on the information available at the time, but that assessment should evolve as new evidence emerges. Organizations that create space for this kind of reassessment are better positioned to recognize changing exposures and respond before their options become limited.

Preserving the ability to choose

Timing often determines whether a sound judgment can still improve the outcome. Evidence preservation is more effective before records disappear. Witness interviews are more useful before recollections fade. An early discussion with the right expert may prevent months of work built around the wrong theory. A timely settlement evaluation can preserve options that may narrow as litigation costs rise and positions harden.

Early action does not always mean aggressive action. Some signals warrant monitoring, others a modest adjustment, and some an immediate change in direction. A disciplined team identifies what would confirm or disprove its concern, assigns responsibility for obtaining that information, and sets a point at which the strategy will be reconsidered.

Clients should expect that kind of judgment from their claims partners. Reporting what happened remains essential, but the greater contribution comes from helping clients understand what developing facts may mean for their exposure, which decisions deserve attention and how different courses of action could influence the outcome. That level of insight helps organizations make more informed decisions, manage uncertainty and maintain greater control over their liability programs.

The most consequential claim decisions are often made before the full implications of a situation become clear. Organizations that can recognize emerging risks, challenge their assumptions and adapt their strategies early are better positioned to manage exposure and preserve options.

As the liability environment continues to evolve, the ability to anticipate what may come next and act on those insights will become increasingly valuable. For clients, that means having a claims partner who can bring together experience, data and sound judgment to help them navigate uncertainty and make better decisions.