IRMI Update—Issue #74
An E-mail Newsletter for Risk and Insurance Professionals
ISSN: 1530-7948
October 7, 2003
In This Issue
Colleague,
A new report from the Center for Legal Policy at the Manhattan Institute
provides a very revealing look at the lawsuit industry in the United States.
This well-written and documented report will be a real eye-opener to many Americans,
and I hope it is widely read. Essentially, Trial
Lawyers Inc. is an effective comparison of the plaintiff's bar to a huge
corporation. Here is a brief summary of some of the facts it discloses:
- Trial Lawyers Inc.'s revenues are nearly $40 billion per year—more than
that of Microsoft and twice that of Coca-Cola. The overall tort system costs
in America are over $200 billion annually.
- It is recession-resistant and experienced a record year in 2001, when
much of the economy was down.
- If tort costs continue to increase at the 2001 pace, they will exceed
$4.8 trillion over the next 10 years—almost triple the size of the 2001
and 2003 Bush tax cuts combined.
- Free from antitrust actions, Trial Lawyers Inc. is organized into cartels
with alliances of firms specializing in particular types of litigation who
share information, tactics, legal briefs, and clients. They even help each
other finance cases.
- Some trial lawyers are hauling in fees as high as $30,000 per hour;
there are a number of new billionaire trial lawyers.
- Having contributed more than $470 million to federal campaigns since
1990, Trial Lawyers Inc. works hard to maintain its political influence.
The Association of Trial Lawyers of America was the largest political action
committee (PAC) contributor to the Democratic Party in 2002.
While I had knowledge of many of the points covered in this report, it was
an excellent big picture look at the legal industry. This free report is must
reading for all risk and insurance professionals. We've provided a link to the
Web site where you can download a PDF of the report at the bottom of this issue
of IRMI Update.
In the meantime, I'd like to know what you think of our legal system and
what we need to do to fix it. If you've read the Trial Lawyers Inc. report,
I'd appreciate your thoughts on it as well. For example, the report focuses
on the plaintiff's bar. Was justice done when the insurance industry and the
defense bar were excluded? [See reader comments.]
Have a great day!
Jack
Jack P. Gibson
President
IRMI
Make Sure Design Liability Is Covered—As design-build
projects increase in frequency, design-builders must have the right insurance
coverage to protect themselves and their clients from uninsured risks. Often,
the company in charge of both the design and construction is a developer or
a construction firm. And all too often, the design-builder has no coverage for
design risks.
Here are some tips for design-builders and their clients regarding design
liability coverage:
- Think twice about relying on the professional liability insurance of
a subcontracted design professional; that coverage may not be available
when a problem has to be resolved.
- Be careful with design or professional liability endorsements to CGL
policies since the coverage may not match the actual risks of a design-build
project.
- Explore stand-alone design liability coverage that will provide primary
defense and indemnify those parties harmed by negligence in design—even
if the claim is based on vicarious liability when the design-builder hires
a design professional as a consultant.
Every construction process has enormous risks. With design-build projects,
some of those risks might be mitigated, but others can result in massive claims.
As more clients agree to use design-build, they need to know that design risks
are covered. For proper protection, the design-builder should have adequate
design liability coverage.
By: Eric Myers
Victor O. Schinnerer & Company, Inc.
Chevy Chase, MD
E-mail: Eric.E.Myers@Schinnerer.com
www.planetcontractor.com
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 462 articles on IRMI.com, and many more are in production.
Below you'll find summaries of some recent additions with links to the articles.
-
Workplace Violence
Programs—A Sound Investment—This summer, a number of preventable
homicides occurred in American workplaces. Dr. James Madero offers compelling
reasons for workplace violence prevention programs.
-
Performance Based Seismic
Design—Dr. Nathan Gould explains Performance Based Seismic Design:
what it is, how it works, and why it is the seismic design methodology of
the future.
-
Private Aviation:
Being an Additional Insured—Private air charters pose many risk
management and insurance challenges for clients. In this new corporate aviation
column, Adam Webster discusses what to watch out for.
-
Jones Act Status
Issue Once Again Wastes Resources of All—Michael Orlando discusses
the recent case of Becker v Tidewater and how it provides the backdrop for
the decades-old debate over Jones Act versus Longshore Act status.
What's New—We have recently updated
IRMI Online
to include the latest issues of our newsletters,
The Risk Report,
Captive Insurance Company Reports, and
Financing Risk & Reinsurance, as well as
supplements to a number of the reference manuals. If you subscribe to
IRMI Online,
please click
this link to go directly to a summary of the new issues and information
with direct links into the publications.
Family Disaster Planning—Ten
Key Ingredients—Robin Olson discusses the importance of developing
a family disaster plan, communicating it to all family members, and maintaining
it for future emergencies.
The Secret of One Firm's
Safety Success—In a keynote presentation to IRMI Construction Risk
Conference attendees, Peter G. Vigue, president of Cianbro Corporation and a
highly sought-after speaker, will share the story of a construction company's
transformation to a company that prioritized the safety of its workers and the
general public over schedules and profit margins. Implementing this aggressive
plan required organizational changes as well as a shift in the overall corporate
culture, from top management all the way down to the workers on the site. Hear
a captivating story of challenges, results, and other unexpected benefits the
company has reaped as a result of these initiatives. The dramatic reduction
in injuries—lost time injuries fell from 100 to 1 over a 12-year period—is just
the tip of the iceberg in terms of the impact this change in philosophy has
had on the organization. Learn more about this session and others at the
23rd IRMI Construction
Risk Conference.
New California Workers
Compensation Manual Published by IRMI—Levine
On California Workers Compensation Premium And Insurance is a new reference
manual designed specifically to help risk managers, insurance buyers, agents,
brokers, underwriters, and premium auditors with operations or clients in the
state of California. This new manual will help you properly classify risks for
premium determination, apply experience rating rules, understand insureds' rights
to claims and rating information, understand and explain how rates are determined,
evaluate employee leasing, "sovereign nation," and other alternative programs,
deal with insurer insolvencies and the State Fund, handle premium disputes,
and negotiate important premium issues with the WCIRB or underwriters.
Levine on California Workers Compensation Premium
and Insurance is now available on IRMI Online, IRMI CD, SilverPlume Sage,
and in print. Follow the link for more
information or
to order a copy, please go call our customer service department at 1-800-827-4242.
Sanford
Warren has been writing on intellectual property law issues for IRMI.com
for 3 years. He is an attorney with Winstead, Sechrest & Minick where he practices
complex patent litigation in the areas of complex patent interferences, trademark
oppositions and cancellations, and the management of worldwide trademark programs
and international software licensing. Before joining Winstead Sechrest & Minick,
Mr. Warren was a partner at Warren & Kennedy and, prior to that, he was the
head of the Intellectual Property Group of Gardere Wynne Sewell, LLP, and served
as intellectual property counsel for American Airlines, Inc. For more information
on Mr. Warren, see his full biography
and a
list of his articles.
The report Jack discussed in this issue's editorial can be downloaded in
a PDF file
at no cost.
A subscription to IRMI Update is absolutely free. Use the
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