Which of the following is a potential outcome if an insurer improperly handles a claim?

• A. Increased trust from the employee
• B. Possibility of legal penalties
• C. Immediate coverage approval
• D. Reduction in future claims

Answer: (B)

When an insurer improperly handles a claim, one potential outcome is the possibility of legal penalties. This stems from the expectation that insurers must adhere to laws and regulations governing fair claims practices. When an insurer fails to manage a claim appropriately—such as being excessively delayed, denying a valid claim without justification, or failing to communicate effectively—they may face legal repercussions.

These penalties can include fines, increased scrutiny from regulatory bodies, or even lawsuits initiated by policyholders for damages arising from the mishandling of claims. Thus, the risk of legal penalties serves to encourage insurers to comply with ethical and legal standards in processing claims.

In contrast, the other outcomes listed—like increased trust from the employee, immediate coverage approval, and a reduction in future claims—are unlikely to occur when claims are handled improperly, as such practices generally result in dissatisfaction and distrust among policyholders.