IRMI Update—Issue #45
An E-mail Newsletter for Risk and Insurance Professionals
ISSN: 1530-7948
July 25, 2002
In This Issue
Colleague,
A safety professional who had just lost his job recently complained to me
that he was sick of cleaning up corporate safety practices only to be fired
once he had succeeded and was no longer needed (at least in the minds of the
executive officers). Frankly, his assertion surprised me.
It is sometimes difficult to convince top management that safety does pay
huge dividends. However, once they get the message, you would think they wouldn't
want to take a chance of losing the competitive advantage it brings. Safety
programs don't run themselves. To be effective, they must be dynamic, responding
to changes in the business operations and resulting hazards. For this to occur,
someone in the organization needs to be dedicated to the program. So it doesn't
make much sense that you would terminate the person who has put in place a successful
program just to save on payroll costs for a short while.
Am I missing something here? Assuming that management was pleased with the
safety program and the work of the person behind it, why would they terminate
him or her? Are companies too quick to include risk management and safety professionals
in their companywide lay-offs? What things can a safety or risk manager do to
assure management understands the contributions he or she is making to the organization?
[See reader comments.]
Jack
Jack P. Gibson
President
IRMI
Questions To Ask About Your Directors & Officers (D&O)
Liability Policy. In light of Enron, D&O policies are getting more attention,
and many directors & officers (D&O's) are now asking, "Do we have enough?" There
is no easy answer to this, but this question should lead you to evaluate the
following:
- Are D&O policy limits adequate if employment practices liability (EPL)
coverage is included in the same policy?
- Does the addition of "entity" coverage jeopardize the coverage of your
individual D&O's?
- If bankruptcy is filed, will your policy leave the individual directors
& officers uninsured?
- Is your insurer prevented from subrogating against individual D&O's,
except for proven dishonesty or fraud?
- Do the D&O policy and policy application contain broad severability
(or non-imputation) provisions so that statements or knowledge of one insured
cannot be imputed to the other insureds? [This is intended to protect the
"innocent" D&O's from loss of coverage.]
- Does your board of directors practice effective D&O loss control (which
can reduce both the number and severity (size) of claims)?
- Since your D&O policy probably has an ERISA exclusion have you looked
carefully at your fiduciary liability policy to make sure it is up to speed?
Walt Curtner
Risk Management, Inc.
Denver, Colorado
Phone: (303) 628-5556
crmrisk@eazy.net
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
give you credit for your contribution.
There are now 311 articles on IRMI.com, and many more are in production.
Below you'll find summaries of some recent additions with links to the articles.
-
A Mold Prevention
Program—Mold has become such a nightmare for owners, contractors,
suppliers, everyone, that if you haven't developed a prevention program,
you probably will. Jeff Slivka provides a brief outline of what a mold prevention
program may look like.
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The Design Professional’s
Statute of Repose—Kenneth Slavens examines the case of Jordan
v Sandwell, Inc., et al., highlighting the problems that design professionals
may encounter when the statute of repose is raised as a defense.
Trouble Brews: Insuring
Synthetic Stucco Homes—Learn more about synthetic stucco, or Exterior
Insulating and Finish System (EIFS), which some claim results in water and other
related damage to homes and why insurers are turning away from this market.
Distinguished
Panel To Address Umbrella Insurance Problems—The hard market has
affected umbrella liability more than most other coverage lines for construction
risks. We've assembled a distinguished panel of experienced underwriters to
discuss some of the problems in the market as well as possible solutions for
them at the 22nd IRMI Construction Risk Conference. To learn more about this
optional workshop and review the panelists biographies, stop by our Web site.
We are now taking registrations for the Conference. To register, just complete
the online registration form or call (800) 827-4242.
Gary E. Bird
Horizon Award Nominations Now Being Accepted—We are seeking nominees
for the prestigious Gary E. Bird Horizon Award (formerly known as the Construction
Risk Management Best Practices Award). Nominees for this award are risk management
innovators employed by contractors or project owners. Please help us find the
next recipient.
Our deadline for nominee submissions is September 1, so please act quickly!
To obtain nomination information or to learn more about the award, its qualifications,
and requirements, go to our Web site.
New from IRMI: Design-Build
Risk and Insurance—Contractors who act as design-builders must be
on top of issues such as performance guarantees, licensing requirements, ownership
of design documents, indemnification, and a variety of other potential risks.
Failure to recognize and plan for these risks can be devastating to you or your
client. Learn the ins and outs from the most knowledgeable practitioners in
the industry. For more information, see this Web page.
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