IRMI Update—Issue #83
An E-mail Newsletter for Risk and Insurance Professionals
ISSN: 1530-7948
February 24, 2004
In This Issue
Colleague,
Cell phone cameras are presenting an interesting security dilemma for corporations
worldwide as they seek to protect their intellectual property. Camera phone
sales are outstripping sales of all types of stand alone cameras combined, with
some industry insiders predicting that as many as 100 million units will be
sold in 2004. As camera phones become more pervasive in the office, it becomes
increasingly easy for employees to intentionally or inadvertently photograph
confidential items and quickly transmit the photos to others. Imagine the chagrin,
for example, of an auto maker's senior management when they see the prototype
of their next model on the Internet. While this has always been possible with
film cameras, using one in the office was suspicious in itself, and exposed
film would have to be smuggled out and developed before it was useful.
In response, some companies are reportedly developing policies that either
(1) forbid employees from bringing camera phones into the office or (2) forbid
them to take photographs on the company premises. What do you think about this?
Do you think camera phones increase security risks? Is a restrictive policy
good risk management or overreaction? Has your company drafted a policy, and
if so, what does it say? [See reader comments].
If you insure or manage design or construction risks, be sure to check out
our latest 1 1/2-day seminar, "Proactively Managing Design and Construction
Risks and Claims." Two nationally known experts will be sharing practical advice
at this seminar in Las Vegas, Chicago, and Washington, DC. For more information,
go to the Seminars section of our
web site.
Have a great day!
Jack
Jack P. Gibson
President
IRMI
Prepare or Verify Premium Audits—When workers
compensation insurance (and sometimes general liability and automobile insurance)
is first written, the actual exposure base for the year (payroll, sales, or
number of vehicles) must be estimated. After policy expiration, the actual earned
premium for these policies is established based on the actual exposure as determined
by a premium audit performed by the insurer. The year-end audit should be approached
with the same degree of concern as the federal income tax return.
You may want to prepare the audit yourself to be certain it is done properly.
If you decide to do it yourself, obtain a sample of the audit department's work
sheets and use them to develop ratable payrolls. Then go over the work sheet
and documentation with the insurer's audit department and discuss any changes
that are to be made.
If the premium audit is not prepared internally, ask the auditor to provide
copies of the draft work sheets used in performing the audit. When the final
audit is received, check it against the draft work sheet for transposition errors.
Ascertain that the correct experience modifier (if applicable) has been used
and that all mathematics involved in determining the premium are correct. Finally,
all rates utilized in determining the premium should be checked against the
original insurance policy; any discrepancy should be explained by the insurance
agent or broker.
Source: Derived from recommendation #96 from
101 Ways to Cut Business
Insurance Costs
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 507 articles on IRMI.com, and many more are in production.
Below you'll find summaries of some recent additions with links to the articles.
-
Lessons
from Equipment Thefts in 2003—David Shillingford provides a unique
view of an annual equipment theft report and offers further advice on how
to prevent and respond to the theft of heavy equipment.
-
Owner Safety Leadership—For
construction project safety, the owner must take the lead to promote safety
as a goal, from bidding, into contract preparation and pre-construction,
through project delivery. Ron Prichard explains.
-
Circuit Split Widens
over Exculpatory Clauses in Maritime Contracts—Michael Orlando
explains how a recent Eighth Circuit decision involving a fire at a marina
highlights and widens the current split among federal circuits over the
enforceability of "red-letter" clauses.
-
Avoiding Willful Infringement
in Intellectual Property Litigation—In this 2-part article, Sanford
Warren Jr. addresses general guidelines for patent, trademark, and copyright
infringement and how to avoid it. Part 2 will address patent opinion requirements.
-
"I'm Sorry—You're Just
Funny!"—What happens to a previously good salesperson whose impression
of his current abilities doesn't match his performance? Frank Lee explains
how it could be Hyperpro Sales Call Reluctance.
- Deming Disciples—Our Industry’s Real Leaders?—In
this new column on continuous performance improvement, John Pryor examines
the leadership principles espoused by W. Edwards Deming and their application
for the insurance industry.
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 Contractual
Risk Transfer, be sure to check out our initial analysis of the new additional
insured endorsements. Please use this link to go directly to a summary of the new issues and information
with direct links into the publications.
Two Dates
Left for the California WC Cost Control Seminar—"Reducing California
Workers Compensation Premiums: Expert Techniques to Minimize Costs" is a new
IRMI seminar designed for anyone who buys or sells workers compensation insurance
in California. Attend one of the remaining seminars next week to earn 8 hours
of continuing education credit and walk away with vital information on employee
classifications, negotiation strategies, self-insurance and multiemployer pooling
options, claims handling/audits, and new developments in the market. This 1-day
seminar is jam-packed with proven techniques guaranteed to save you premium
dollars. Let us know right away if you'd like to attend: San Diego—March 2;
or Oakland—March 4. To learn more details, including exact locations and speaker
biographies see the Seminars section.
IRMI Insurance Checklists
Help You Compare Coverages—The new 2004 edition of IRMI Insurance Checklists provides you
with 53 insurance coverage checklists encompassing common commercial and personal
lines policies. These checklists enable you to review existing policies, summarize
and record their provisions, compare renewal policies with those being replaced,
and serve as the basis for explaining and outlining the important features of
a current or proposed insurance program. Checklist users may also manipulate
these checklists, presented in Microsoft Word files, to add more information
to the checklists—like additional policy provisions, schedules of locations
or automobiles, and additional named insureds—by downloading the checklists
to their hard drive or disk. For more information, go to the Products & Services section.
J.
Kent Holland Jr. has written for IRMI.com for 3 years on design build
liability legal trends. He is risk management services director for Arch Insurance
Group Inc. and serves as of counsel for Wickwire Gavin, P.C., in Washington,
DC/Virginia. Mr. Holland's legal practice has emphasized construction and environmental
law, representing project owners, design professionals, and construction contractors
in contract negotiations, claim resolution, disputes, and litigation. He has
written extensively on the subject of construction project risk management,
including chapters in the IRMI Construction Risk
Management manual. Mr. Holland is also a past speaker at the IRMI Construction
Risk Conference and will be presenting at the upcoming "Proactively Managing
Design and Construction Risks and Claims" seminar as well. For more information
on Mr. Wagner, see his full biography and a list of his articles.
Learn more about his upcoming seminar at our Seminar site.
A subscription to IRMI Update is absolutely free. Use the e-mail registration form to initiate or terminate
your subscription.