IRMI Update—Issue #23
An E-mail Newsletter for Risk and Insurance Professionals
ISSN: 1530-7948
August 21, 2001
In This Issue
Colleague,
In her July 18 column for The Wall Street
Journal, Sue Shellenbarger tackled a topic I've been giving some thought
to: the risks of cell phone usage. She recounted the story of a California attorney
who would rack up billable time by talking with clients or associates on her
cell phone while driving to meetings. That is she did until she ran over a 15-year-old
girl without even realizing it; she's now in jail for hit and run, and her employer
is facing a liability lawsuit.
In the fast-paced world we live in, cell phones have given people the ability
to multi-task. To keep working while doing other things, including driving.
Few would question that this increases the chance of an accident. New York legislators
are so concerned about it they passed an ordinance curbing cell phone use, and
many other states are considering similar legislation.
But should employers wait for legislators to move on this? Shouldn't they
instead adapt policies on cell phone use during dangerous activities, particularly
driving? What should such a policy say? [See reader
comments].
Have a great day.
Jack
Jack P. Gibson
President
IRMI
Don't Be Afraid of E-Commerce—Be Prepared—While
there are a number of risks involved by conducting business via the Internet,
the bigger risk is not getting into e-commerce. With the appropriate planning,
organizations can make the most of this opportunity and minimize their exposure
by undertaking a thorough review of the organization's e-commerce business model
that will help to identify and address the potential risks. The following plan
of action is recommended:
- Review e-commerce applications. Look carefully at all the ways the company
uses the Internet and related technologies, especially applications involving
e-commerce or B2B integration. Consider what would happen if one of these
systems were temporarily shut down or penetrated by a hacker.
- Set priorities. Focus on e-commerce risks that could have the greatest
impact on profits or reputation.
Gauge the company's vulnerability. Conduct
an audit of security policies and procedures. One method is to conduct "ethical
hacking" which allows a consultant to attempt to break into a network in
order to identify the vulnerabilities.
- Assess values affected. Examine the financial impact and valuation issues
associated with e-commerce activities. A denial of service attack can affect
earnings in a matter of minutes.
- Review insurance. Does the existing insurance program cover e-commerce
risks?
- Examine contracts with vendors. To what degree are liability risks transferred
to outside vendors who provide critical functions such as Web hosting and
Web development and maintenance?
- Use a team approach. Establish a team in the organization to evaluate
e-commerce risks and develop strategies to deal with them. The team should
include risk management, internal audit, legal, information technology,
and marketing.
- Establish e-commerce security procedures. Set up due diligence procedures
for systems security and business continuity, and test these methodologies.
If a company cannot build the infrastructure to support security, it should
consider outsourcing it.
By: Randall Mohammed
ARM Risk Manager, Telecommunications Services of Trinidad and Tobago
Trinidad, W.I.
RMoham2@tstt.co.tt
Suggest a Risk Tip.
Future issues of IRMI Update will include more risk tips from our readers. Send
us a practical tip (less than 300 words) for identifying and managing risks,
buying insurance, managing claims, or filling gaps in insurance coverages. We'll
acknowledge your contribution as we did for Randy.
We add new Expert Commentary to IRMI.com every week. There are now 195 articles
on IRMI.com, and many more are in production. Below you'll find summaries of
some recent additions with links to the articles.
-
The World's First Insurance
Company—In 1666, the Great Fire of London nearly destroyed the
city. Barry Klein explains how the first insurance company—as well as the
first fire brigade—emerged from the ashes.
-
High-Profile Product
Recalls Need More Than the Bat Signal—Jeanne Finnegan provides
tips on ways you can ensure that a recall of a product with the potential
to cause injury or harm reaches the right people in time to save lives,
save corporate reputation, and mitigate litigation.
The Marketplace Heats
Up!—Our summer IRMI Update poll on the marketplace and the need for
complete underwriting submissions drew a deluge of responses. See the voting
results and learn how others are coping.
The Workers Compensation
Self-Insurance Decision—As the traditional insurance market hardens,
alternative methods to finance workers compensation exposures become more attractive.
This article examines the self-insurance option, including state specifics.
IRMI Conference Gives
Answers to Your Additional Insured Questions—As part of the Construction
Risk Conference, the Contractual Risk Transfer session on Monday will feature
presentations on contract risk allocation techniques, additional insured issues,
compliance and certificate administration, and insurance techniques and requirements.
We will delve deeply into some of the more controversial and misunderstood areas
of each of these subjects, including how to identify and avoid prohibitively
restrictive contract provisions, the scope of protection provided to an additional
insured, and how to write and enforce fair but sufficient insurance requirements.
This is just 1 of 4 all-day seminars and 19 sessions and workshops to be
presented at the 21st IRMI Construction Risk Conference. We are now taking registrations.
Follow the link to the
agenda for more information
about the curriculum or the registration form to sign up. Follow the link to
register, just complete the registration form or call (800) 827-4242.
New IRMI Glossary Prepublication
Offer—IRMI is printing its 8th Edition of the handy
Glossary of Insurance and Risk Management Terms.
The price will be $24 to the public, but we are extending a special prepublication
discount of 20 percent off to IRMI Update subscribers if you order before September
14, 2001. The Glossary now defines 2,500
key commercial property & casualty and life & health terms. Click on
Glossary to order.
A subscription to IRMI Update is absolutely free. Use the
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your subscription.