What to Include in a Tender Demand Letter

Claire C. Carr has been working at Kalbaugh, Pfund & Messersmith, PC (KPM LAW) for 28 years at its central office in Richmond, VA. In 1999, Claire C. Carr established the firm’s workers’ compensation insurance department and continues to manage it by serving as the practice group chair. In addition to practicing workers' compensation, Claire previously defended personal injury claims for businesses and companies who were sued by a customer for injuries received from some kind of accident. Frequently there was another company who contractually bore responsibility for the injuries. In those cases, Claire's client company may "tender its defense" over to another company to step in and defend, pursuant to a contract those parties had entered into.

Insurance is about risk transfer, but if that transfer includes expensive litigation, it becomes much less valuable. One of the steps in successfully transferring the risk of loss is to “tender” the defense of the claim to a third party and demand that the tender is accepted and that the third party step in to defend the claim. A tender demand letter must include all of the facts about the claim, including the parties involved, date, time, location, etc. Moreover, a copy of the indemnity contract that contains the duty to indemnify needs to be included, along with a copy of the certificate of insurance that identifies an organization as an additional insured or loss payee.

Always make sure the certificate of insurance is for the policy period in which the claim occurred. Also, remember that the letter is discoverable, so it should be worded carefully to avoid its use in litigation against you.