IRMI Update—Issue #19
An E-mail Newsletter for Risk and Insurance Professionals
ISSN: 1530-7948
June 19, 2001
In This Issue
Colleague,
Responding to my comments in IRMI Update #4 about agents and brokers providing
value-added services, a reader voiced concern about an insurance agent or broker
also acting as a consultant because of the conflicts of interest that arise.
Can an agent profess to both give consultative advice and represent the insurer?
Will an agent or broker recommend self-insurance even in the face of lost commissions?
Must not-so-complimentary information learned in performing a risk control study
be reported to the underwriter, possibly to the detriment of the client? Can
an agent objectively help an insured choose between competing proposals from
other agents, even if that agent has not submitted a bid?
I began my career as an independent risk consultant, and we touted the fact
that we did not sell insurance as a major reason why clients should hire us.
One of the things I remember most about those consulting engagements was having
agents thank me for recommending something they had been trying to get their
clients to do for years. The agents had been ignored, but our recommendations
were acted upon, perhaps because we had more credibility when it came to such
advice. But nevertheless, the agents had made the recommendations.
Over the years I've concluded that professional agents try very hard to provide
their clients with the best possible advice, regardless of their own short-term
financial self-interest. Doing so is not only a matter of integrity but also
of good business judgment. Providing reliable advice is the only way to build
the client loyalty that is the key to success.
What is your view? Can agents and brokers provide credible and unbiased consultative
advice? When should you bring in an independent consultant? [See reader comments]
Have a great day.
Jack
Jack P. Gibson
President
IRMI
Make Sure You've Covered Computer Security Basics—Despite
highly publicized hack attacks, viruses and distributed denials of service,
the most common security breaches in networks occur in much more mundane settings.
Employees leaving their networked computers on while they're away from their
desks, disks stolen by visitors, and transparent passwords are far bigger security
threats than bands of hackers.
Proper password safeguards are particularly important. Many employees choose
simple passwords, leave them written on sticky notes attached to their computer
monitors, or worse, never choose them at all. Some network administrators report
that the most common passwords on their systems are "password" and "default"—a
fact that would probably not escape even a casual data thief. Some companies
help minimize that particular risk by insisting on new passwords every week
and requiring users to choose hard-to-guess passwords, a task the risk manager
can assist with and encourage.
The risk manager who takes a proactive role in basic technology security
measures will find it easier to buy insurance, and easier to understand what's
being bought.
By: Donna Ferrara, Esq.
Vice-President
Arthur J. Gallagher Risk Management Services
New York
e-mail:
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 Donna.
We add new Expert Commentary to IRMI.com every week. There are now 149 articles
on IRMI.com, and many more are in production. Below you'll find summaries of
some recent additions with links to the articles.
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Workers Compensation
and Medicare—Medicare now believes there has been an illegal
shift of medical benefits from workers compensation insurers to Medicare.
To stem this flow, Medicare hopes to examine all workers comp settlements,
even when claimants do not qualify for Medicare benefits. See what may be
in store in this controversial area.
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Back to the Exclusions—The
"Subcontractor" Exception—The "your work" exclusion of the CGL
policy, together with its "subcontractor" exception, are the source of great
contention in construction defect cases. This article looks at the question
of whether coverage exists for property damage arising out of work or materials
supplied by other than a traditional subcontractor.
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The Brazilian Insurance
Market—Brazil has been undergoing a political and economic process
of change since the early 1990s, which is reflected in its insurance market.
Learn about its insurance market—its structure, regulatory environment,
how various coverage lines are handled, and its profitability.
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Sales Call Reluctance:
All Dressed Up, Nowhere To Go—Lack of clear career goals is a
common problem found in many under-performing salespeople. Their careers
are lackluster and mediocre. This article examines characteristics of Low
Goal Salespeople and what can be done to motivate them.
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Admiralty Jurisdiction: A Challenge for Even the Seasoned Practitioner—Determining
whether admiralty jurisdiction exists over a particular claim can prove
extremely challenging, even for those well versed in admiralty law. This
article examines the history, landmark cases, and how to determine where
the baseline exists on a coastal state.
What Does "Separation
of Insureds" Mean?—Part 1—Most liability insurance policies contain
a "severability of interests" condition, which stipulates that coverage applies
"separately" to each insured. This article, and the two to follow, examine coverage
issues raised by this condition in the ISO CGL policy.
CRC Agenda Now Online—The
agenda for the 21st IRMI Construction Risk Conference is now available for viewing
online. Check out the planned seminars and workshops at the link. We will begin
accepting registrations in August.
New IRMI WC CE
Course Online—"IRMI on Workers Compensation Insurance" is now available
online, for those in need of both CE and a challenging read. So many CE courses
are at the introductory or basic level, making them a supreme waste of time.
IRMI uses advanced reference material to put the "education" back in continuing
education. See other IRMI courses that are available on IRMI.com.
New! Blueprint for Workers
Comp Cost Containment—Drawing on his 20 years of safety and
claims management experience, author Martin F. McGavin gives you tried and true
strategies and tactics for bringing escalating workers compensation costs under
control. This timely book will pay for itself over and over again. Go to Products
& Services to see the table of contents or to order your copy.
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