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Industry Watch Index

INDEX OF TOPICS
Chemical & Petroleum Condominium Associations Construction Directors & Officers Liability Dry Cleaners Employment Practices Employment Practices Liability Environmental Healthcare Homeowners Liability Intellectual Property Liability		Insurance Brokerages Management Nonprofits Oil Pharmaceutical Liability Professional Liability Property & Casualty Real Estate Umbrella Liability Workers’ Compensation Other Topics

Chemical & Petroleum

“All Risk” or “Your Risk”: When All-Risk Cargo Insurance Companies Attempt to Shift the Risk Back to You
Is it safe to believe your all-risk cargo policy will cover all losses—no matter the cause—unless specifically excluded? Diana Shafter Gliedman explores how many insurers try to shift those risks of loss back to their policyholders and what the courts have had to say about it. [2005]

Don’t Let ’em Fool Ya: Bermuda Policies’ So-Called “Pollution Exclusions” May Not Bar Coverage for Liabilities Involving Petroleum and Chemical Products
Many policyholders are facing difficulties obtaining the coverage they purchased from companies using “Bermuda” form policies of the type sold by ACE and XL. Here’s what companies with petroleum and chemical products need to know. [2005]

Condominium Associations

Seven Important Earthquake Issues for Condominium Associations
Here are seven important earthquake issues you need to consider when purchasing coverage for common interest developments. [2006]

Construction

Builder’s Risk Insurance, Part 1
In Part 1 of their primer on builder’s risk insurance, Michael D. Grady and Paul O. Dudey examine the many considerations policyholders should take into account when obtaining builder's risk coverage. [2004]

Builder’s Risk Insurance, Part 2
Michael D. Grady and Paul O. Dudey finish up their article on Builder's Risk insurance, discussing methods of obtaining comparable or perhaps even broadened coverage for such construction using various inland marine policy forms. [2004]

Directors & Officers Liability

Addressing The Board Member’s Personal Risk Exposure
A survey of independent directors found that 48% had turned down directorships because of a fear of being sued; half of the respondents said that adequate D&O insurance was critical in their decision whether or not to serve. William R. Henry, Jr. offers guidance to organizations seeking qualified, motivated independent directors and to individuals concerned about losing personal assets as a perverse result of well-intentioned service. [2004]

Catch Me If You Can: Improper Denial of Securities Claims by D&O Insurance Companies
D&O insurers may run—but they can’t hide—from their policyholders’ securities claims. [2006]

Coverage For Restitutionary Damages
Two recent court decisions addressed the issue of whether a D&O insurance policy covers certain types of restitutionary damages not expressly excluded by the policy. In both cases, the court ruled no such coverage existed, based on the fundamental premise that insurance should not cover the return of ill-gotten gain. This premise can lead to some surprising results and difficult coverage issues in the context of D&O insurance, as Dan A. Bailey explains. [2003]

D&O Insurance: Don’t Let Insurance Companies Stop Payment Of Defense Costs
Can insurance companies block advancement of defense costs on their sole assertion that a misrepresentation was made in the policy application? R. Mark Keenan and Cort Malone discuss several Florida and New York cases that uphold defense-cost payments, one of the most important rights provided to D&O policyholders. [2004]

D&O Insurance: Summer 2002 Market Update
A recap of current D&O market conditions—including capacity, underwriting trends, coverage trends and pricing—and suggestions for an appropriate strategy for the second half of 2002. [2002]

D&O Liability Insurance Companies Must Advance Defense Costs
What happens in a tale of D&O liability coverage where the director of BigCorp, Inc. tussles with Really Big Insurance Group? Here’s the moral of this modern-day story as ultimately told by the courts. [2006]

The D&O Market in 2004
Mounting frequency and severity of claims did not deter the D&O market from rate competition in 2004. Premium per $1 million of limits fell for almost all sectors of the market. Despite falling rate levels, the market continues to grow as the U.S. economy expands, new products are introduced, and more and more entities and their boards, especially in the private company and nonprofit sectors, recognize the need for the coverage. [2005]

ERISA Tagalong Claims: Loss-Prevention Strategies
Learn eight important strategies your organization can use to reduce the likelihood of ERISA tagalong class actions and enhance its ability to successfully defend them. [2006]

Fear Of Commitment: D&O Insurance Snags When Settling Underlying Claims
Once upon a time, insurers were generally friendly about settling D&O policyholder claims. Today it’s more likely you’ll have to wrangle with an insurance company for a commitment on coverage. Joshua Gold cites some cases in point, and advises how to deal with a non-committal D&O insurer. [2003]

Inter-relatedness Provisions in D&O Insurance Policies
“When faced with multiple potentially related claims or losses occurring during different policy periods, is the insured entitled to coverage under more than one D&O policy?” [1999]

Market Softens While Claim Frequency and Severity Increase
Tillinghast’s latest snapshot of liability claims and insurance-buying trends reveals an interesting portrait of D&O. [2006]

The Effect of § 402(a) of the Sarbanes-Oxley Act on a Company’s Ability to Advance Defense Costs to Its Directors and Officers
Section 402(a) of the Sarbanes-Oxley Act adds a provision to the Securities Exchange Act of 1934 which generally prohibits corporations from making personal loans to directors and officers. Could this prohibit a company from advancing defense costs to its D&Os? Dan Bailey explains the provision’s legislative history and several prior SEC rulings that help to indicate an answer. [2003]

Dry Cleaners

Special Insurance Program Available For Dry Cleaners
Dry cleaners have unique bailee, pollution, and transit exposures that can be difficult to insure. The Fabricare Program underwritten by St. Paul addresses these and other exposures in a new consolidated package program. [2004]

Employment Practices

Military Leaves—New Regulations Employers Share in War on Terrorism
Here are some of the most important aspects of the Uniformed Services Employment and Reemployment Act Rights Act (USERRA), which went into effect January 2006. [2006]

Employment Practices Liability

The 10 Biggest Mistakes Made In Hiring
Hiring the “wrong” employee can lead to disaster, and the seeds of failure are planted in the hiring process. Here are 10 mistakes to avoid when seeking the “right” employee. [2003]

AB 1127 Passes in California [external link; 1999]
Full Text of the Current Session Legislation

A Sickeningly Sweet Settlement
Department store ordered to pay $20 million to four clerks, fired for eating candy. [1999]

Avoid Employment-Related Claims with Smart Hiring Practices
Are you hiring litigation-prone people? These easy-to-implement strategies may help you avoid hiring your next EPL lawsuit. [1999]

Breaking Past The “Culture Of Silence”
Many victims of sexual harassment fail to report the problem to upper management because they fear retaliation. How do you break the silence? [2000]

Court Rejects Gender Bias Claim Based On Alleged “Cat Fight”
In a recent California case, the plaintiff claimed that her employer failed to break up a bloody fight she was in because it was merely a cat fight between two women. The plaintiff sued for gender discrimination. [2000]

Class Action EPL Suits
Merrill Lynch is in the midst of a gender discrimination class action suit filed by 927 women, while some 22,000 women are eligible to join a similar class action suit against Salomon Smith Barney. [1999]

Did We Cover Everything? A Recommended Pre-termination Checklist For Employers [2003]
Employers must consider many issues when terminating employees. Woldt & Associates’ sample checklist provides a starting point in analyzing how to protect a company’s property and legal rights.

Discrimination and Sexual Harassment Claims Continue [external links; 2000]
Adam’s Mark Reaches Agreements with All Parties to Settle Suits
Women in $500M Sex Bias Payout

Drafting Effective and Enforceable Employee Termination and Release Agreements
A tightly drafted Employment Termination and Release Agreement is an excellent, cost-effective way for an employer to avoid liability arising from employee lay-offs and other separations. [2005]

EPLI: Worth Another Look
As the volume of employment litigation increases, employment practices liability insurance (EPLI) draws more attention. Daniel Sheran explains EPLI, a necessary cost of doing business to avoid the decimating impact of litigation against small companies and the impact of class action suits against large employers. [2003]

EPL Insurance: Third-Party Liability Coverage
Insurers that provide third-party liability coverage for sexual harassment and discrimination. [1999]

EPL Insurance With Amenities
Some insurance companies are now offering “EPL packages” that include little extras, such as free management, legal and labor advice. [1999]

Employment-Related Claims Under the CGL Policy: How To Deal with the Denial of Coverage
You relied on supposedly “sound” employment practices of your organization. So when that sexual harassment claim lands on your desk, you pray for some sort of coverage under your Commercial General Liability (CGL) policy. Laughed at by your insurer, you take the final desperate step and turn to riskVue for some advice. Here’s what you should know. [2000]

Mediation And Arbitration Of Employment Disputes
Skyrocketing defense costs and million-dollar verdicts are just two reasons why dispute resolution is so important. Learn how Alternative Dispute Resolution (ADR) and arbitration agreements can work for you. [2002]

Ramifications of Vizcaino v. Microsoft Judgement
A look at contingent employment, analyzing how the Microsoft judgement may effect future EPL cases that involve temporary employees. [external link; 1999]

Supreme Court Says Yes To Arbitration
The California Supreme Court has ruled that an employer may require both current and prospective employees to agree to arbitrate employment-related disputes as a condition of employment. [2000]

The Effect Of Punitive Damages On EPL Settlements
This excerpt from The EPL Book discusses the effect of punitive damages on employment-related claim settlements and explains how coverage for these claims can be incorporated into your EPL insurance policy. [2004]

The End of Binding Arbitration?
Binding arbitration receives some heavy blows in recent court battles. [1999]

The EPL Market: Where It Is, Where It’s Going
The number of different EPL insurance policies increased by 100% between 1997 and 1998. What does 1999 and beyond have in store for the EPL market? [1999]

Use Caution When Hiring and Firing Old Folk
According to discrimination attorney, David H. Greenberg, “age discrimination cases can be a particular risk to employers, both because of the large amount of a potential verdict, and because of the frequency with which age discrimination occurs.” [external link; 2000]

Environmental

An Absolute” Trend: D.C. And New York Join The Majority Of Other Courts Limiting The “Absolute Pollution Exclusion”
Susan Levy and Lorelie Masters of Jenner & Block, LLC, review two recent court decisions maintaining the trend of limiting the absolute pollution excclusion to its intended reach — true environmental pollution. [2003]

Mold: A Comprehensive Claims Guide (Book Review)
With businesses losing incredible amounts of money to mold claims, it’s wise for risk managers to have an encyclopedic reference guide to dealing with the risks of mold. Here’s one such volume you should consider for your library. [2005]

Mold Strikes Again
This article examines Hayley v. Allstate Insurance Company, in which the Michigan Court of Appeals held that a mold exclusion in a non-standard homeowners policy applied to bar coverage for mold caused by interior water damage. Also examined is whether failure to pay an insurance claim creates a cause of action for the intentional infliction of emotional distress. [2005]

Healthcare

Preempting Healthcare Whistleblowers
Whistleblowing in the healthcare field is a growth area. In FY2003, the U.S. government collected $1.48 billion in suits initiated under the federal False Claims Act. Are you at risk? John M. O’Connor and John H. Doyle III answer questions about whistleblower suits and tell health care providers what they can do to prevent them. [2005]

Homeowners Liability

Emerging Coverage Issues: Homeowners’ Mold Claims
The controversy over coverage for homeowners’ mold claims centers on the interplay of ensuing-loss provisions with certain standard homeowners’ policy exclusions. Charles LiMandri explains these provisions and exclusions, and discusses the inconsistency in recent judicial decisions in this developing area of the law. [2003]

Insurance Brokerages

Agency Consolidation Gaining Momentum; Outlook Remains Cloudy
WFG Capital Advisors has released the results of its study showing that agency consolidation will likely achieve records results for 2004. [2004]

Insurance Market Trends and Broker Impact
Has the pricing cycle for carriers peaked? Can brokers successfully confront market obstacles that lie ahead? Here’s a look at the most recent property and casualty market trends and their implications for carriers and brokers. [2004]

New Research from WFG Capital Advisors Shows That Eliot Spitzer’s Probe Will Reduce Leading Insurance Brokers’ Bottom Lines by 25%
After studying seven of the industry’s top brokerage firms, WFG Capital Advisors concludes that abandoning contingency commissions will force brokerage firms—large and small—to reevaluate their business models and take drastic measures to appease shareholder demands. [2004]

Intellectual Property Liability

Managing Risk In The Practice Of Intellectual Property Law
The practice of intellectual property law has sometimes been viewed by attorneys as “high risk.” In this article, attorney Pamela Phillips explains why this view prevails and offers law firm risk managers practical tips on how to avoid intellectual law malpractice claims. [2003]

Management

2006 Brings Heightened Recordkeeping Requirements
Employers, several important developments in the last quarter of 2005 promise to make your recordkeeping duties significantly more complicated in the coming years. [2006]

Nonprofits

A Child’s Eye View of Risk
What can smiling sharks and shining suns teach us about managing risk? Melanie Herman believes that adopting a child’s-eye view can significantly improve the vision of those who manage nonprofits. [2005]

Avoiding Liability When Downsizing
Not-for-profit employers: Do you know and understand the federal laws govering mass layoffs? Do you know how to protect your organization during reductions in force? [2005]

Beyond the Usual Suspects
A new ruling provides a terrific example of the need to “stay tuned” when it comes to managing employment risk. [2005]

Department of Labor Offers Guidance on Employees as Volunteers
When is a volunteer truly a volunteer? The U.S. Department of Labor has issued the answer in light of the Fair Labor Standards Act. [2006]

Directors’ and Officers’ Liability Insurance
In the first of a continuing series of articles on the risks facing nonprofits, Melanie L. Herman looks at the myths and realities associated with D&O liability and coverage for nonprofit boards. [2005]

Do I Need a New Broker? Here’s Your Sign!
Nonprofit management can be quick to complain about their insurance services but slow to recognize it’s time for a change. Here’s what to do once you’ve seen the writing on the wall. [2006]

Just Do the Opposite
You need more than good instincts to respond to a crisis or tragedy in your organization. Melanie L. Herman, executive director of the Nonprofit Risk Management Center, begins a new column for riskVue focusing on risk management for not-for-profits. [2005]

Less Is Really More
Nonprofit execs often worry they don’t have enough handbooks, manuals, and guidelines setting forth the organization’s risk management policies. Melanie Herman believes the real worry should be that those documents are overweight and inefficient, and she suggests ways you can streamline and energize your program-policy documents. [2005]

Reality TV and Risk Management
Buried somewhere in your favorite reality TV program are practical lessons you can apply in the nonprofit you serve. [2006]

Risk Management Committees: Perspective Is Key
Unless a nonprofit’s risk management committee has the perspective and experience of its key stakeholders, it risks missing the exposures that could derail its mission. [2005]

What the Board Should Know About Volunteer Liability and the Volunteer Protection Act
By assuming the promise of “protection” suggested by the Volunteer Protection Act of 1997, many nonprofit boards are putting their organizations in jeopardy of financial ruin. Here’s what your nonprofit board should know about the limitations of the VPA. [2005]

Oil

MTBE: Coverage For The Oil Industry’s “Spreading” Problem
MTBE, an octane enhancer used in about 87% of marketed gasoline, has elicited a steady stream of litigation over contamination issues. John Ellison, Robert Frankel, and Michael Conley offer guidelines for determining how your insurance policy may respond to MTBE-related claims. [2004]

Pharmaceutical Liability

Defending Mass Tort Claims: Get What You Paid For
Some pharmaceutical companies pay hefty premiums for unlimited defense protection outside of and in addition to insurance policy limits. John B. Berringer and Bridget Byrnes review the strict defense rules courts have developed that help these companies get the defense they paid for. [2005]

Insurance Coverage For Pharmaceutical Product Recall Losses And Liabilities
The pharmaceutical industry is exposed to considerable perils and significant costs associated with product recalls and product liability claims. Joshua Gold and Rhonda L. Johnson examine some important coverage issues relating to newer insurance products providing insurance protection against product recall claims. [2003]

Professional Liability

The Ins and Outs of Claims-Made Policies
Just how familiar are you with claims-made professional liability policies? Here’s how to really get to know them. [2006]

Property & Casualty

Is EDI Taking Hold In The Property And Casualty Industry?
Electronic data interchange (EDI) for transaction processing has been used since the 1980s by manufacturers, financial institutions, and mass-merchandisers. So why hasn’t the insurance industry caught on? Bill Dochterman explains the dynamics, problems, and difficulties that have limited adoption of EDI systems in the insurance industry. [2002]

Survey Of Decisions On The Applicability Of “Absolute” and “Total” Pollution Exclusions In Cases Involving Ordinary Torts
How has your state’s highest court interpreted the pollution wording found in typical general liability policies? Lorelie S. Masters, Esq. has compiled a matrix showing which states have limited the pollution exclusion to industrial or environmental claims and which states have tended to apply the exclusion literally. [2004]

Real Estate

Improvements and Betterments: Who Owns and Insures Them?
Before making an investment in improvements and betterments on a rented property, read the lease terms to find out who is responsible for repairing or replacing damaged improvements and betterments, and who is responsible for insuring them. [2006]

Is Your Association Ready For Mold?
How To Develop A Mold Evaluation And Remediation Policy
Have your Association’s maintenance calls and costs risen sharply in the last few years? Are there reported leaks from multiple water sources that seem progressively more difficult to repair? Are residents concerned about mold? Bart Mendel and Jacklyn Wolf explain what to consider when formulating a mold evaluation and remediation policy, an important tool to protect associations and homeowners from unnecessary cost expenditures, health concerns, and undue liability. [2004]

Umbrella Liability

Umbrella Policies Deserve Careful Review
If you have not closely examined your umbrella policy, the following discussion will help you determine whether your umbrella provides the catastrophic protection you need. [1999]

Workers’ Compensation

Bringing Prevention into the Workplace with On-Site Therapy
In this two-part article The Journal of Workers Compensation shows us the benefits of bringing therapy into the workplace. [2001]
Part 1 Part 2

Working Overnight: Preventing, Controlling, and Training for Hazards
There is a unique set of risks for businesses that are required to operate 24 hours a day. Hazards in an after-hours working environment include everything from increases in slips and falls to a greater potential for workplace violence. The following case study illustrates a common risk and workers compensation exposure associated with working overnight in a health-care organization — slips and falls. [2001]

Chronic Back Pain: Physiological or Psychological?
A three-part series analyzing workers compensation claims based on chronic back pain. Presented by The Journal of Workers Compensation. [2000]
Part 1 Part 2 Part 3

Developing Case Law From Across the Country
The Journal of Workers Compensation summarizes and analyzes the latest workers’ compensation decisions from around the country. [2001 and 2002]
June 2001 April 2002

Managing Pain and Pain Medication Wisely
Pain — on or off the job, associated with a work-related injury or not — has very strong psychosocial characteristics. Risk managers, plant nurses and doctors, supervisors, and administrative personnel often have to take it into consideration as they deal with reducing lost time, both for the office overall and in the individual worker’s case. [2001]

Managing Vocational Rehabilitation
Unlike medical treatment and physical rehabilitation, vocational rehabilitation (VR) is not a part of most workers compensation claims. This two-part article explores the evolution of VR, the focus of private-sector VR programs, and some considerations for selecting the right VR service provider. [2001]
Part 1 Part 2

Maritime Employees: More Exposure Than You Think
There are a number of federal workers compensation and employers liability laws that apply to work-place injuries and illnesses. Those that apply to employees down on the docks or out at sea pose a serious exposure not covered by the standard Workers Compensation and Employers Liability Insurance Policy. [2000]
Part 1 Part 2

Mergers, Acquisitions, and Downsizing: The Risk Manager’s Role in Due Diligence
The Journal of Workers Compensation analyzes the risk manager’s role in due diligence when a merger, acquisition, or downsizing occurs. Part 1 deals with the risk manager’s role before the action; Part 2 analyzes the risk manager’s role during and after the action. [2001]
Part 1 Part 2

Mold, The Next Big Workers’ Comp Wave
At its January Winter Conference, The California Applicants Attorneys Association told a 1,000-member audience that toxic mold represents a “huge problem” and will be second only to, or may even exceed, asbestos for long-term financial, legal, and health considerations for working America. This article from workcompcentral.com summarizes what’s growing in the world of workers’ comp. [2003]

OSHA Recordkeeping
On January 1, 2002, the Occupational Safety and Health Administration’s (OSHA’s) revised recordkeeping rule took effect. The revised rule is intended to improve the system that employers use to track and record workplace injuries and illnesses. [2002]

PEOs: Employer Efficiency Or Workers Comp Bane?
Professional Employer Organizations (PEOs) are becoming a larger part of the business sector due to our faster moving, more highly specialized economy. Here is what you should know about PEOs and how they can affect workers compensation. [2000]

Put Your Money Where Your Injuries Are...Like Your CTDs
Over the past two decades, specialization and automation in the workplace have contributed to an increase in repetitive job tasks. Often associated with risk factors such as an accumulation of stress or strain from repetition, force, awkward or fixed postures, or constant vibration, these job tasks can frequently lead to musculoskeletal injuries and cumulative trauma disorders (CTDs), which in turn can result in significant costs to employers. [2001]

Red Flags In Impairment Evaluations
Impairment evaluation should be performed and reviewed by physicians who are experienced in the appropriate use of the AMA Guides to the Evaluation of Permanent Impairment, Fourth Edition. When risk managers or claims staff review a physician’s evaluation, they should be alert to certain red flags. [2000]

Shopping for Workers’ Compensation TPAs
Finding a good third-party administrator to handle the workers’ compensation claims of injured employees can be difficult. George Scherbak walks us through the process of finding the best TPA. [1999]

Steps to Planning a Benchmarking Study
This month’s Workers Compensation Watch is brought to you by The Journal of Workers Compensation. [2000]

Survey: Measuring Managed Care Performance
The Journal of Workers Compensation provides some insight into the current state of managed care in its Fourth Annual Survey of Managed Care Performance. [2002]

Telecommuting And Its Impact On Workers Compensation And Safety
In this two-part article, The Journal of Workers Compensation analyzes the impact of telecommuting on workers compensation. [2002]
Part 1 Part 2

The Differences in Philosophy Between Workers Comp Law and Occupational Medicine
The terms “workers compensation law” and “occupational medicine” have similar meanings, but clear distinctions exist. The following article compares the differences between the two fields, and analyzes what it means to you. [2001]

The Risky Business Of Long-Term Temporary Employees
Companies are finding themselves at risk for being sued by long-term temporary employees both for the employee benefits they are not receiving as well as work-related injuries. [2000]

The What and Why of Workplace Violence
There may be as many reasons for violent behavior as there are types of people, thus making predicting and preventing it difficult. However, knowing the major types of violence and having a basic understanding of the perpetrator’s underlying thought processes for each may give employers a place to start. [2001]

Understanding Workers’ Compensation Law
Cornell’s online legal library has a section completely devoted to workers’ compensation law. The site contains information on Federal and State Statutes, Regulations, and Judicial Decisions that make-up the foundation of today’s workers’ compensation laws. [external link; 1999]

Workers’ Compensation — What Do Employees Know?
A recent survey indicates that the most expensive employee benefit is one employees don’t even realize they have. William R. Henry, Jr. explains how to incorporate workers’ compensation into your corporate culture and make it work for your employees. [2002]