In my message 2 weeks ago, I expressed hope that the insurance industry would handle the September 11 tragedy in the same responsive manner that it has dealt with other disasters in the past. I am happy to report that this is exactly what seems to be occurring.

I was proud of the responses of a number of industry leaders when there was speculation in the national press as to whether war risk exclusions might be used to deny coverage. Indeed, the vast majority of these exclusions do not apply to the attacks, and leading insurers and industry associations were quick to issue statements to this effect. (Be sure to see our commentary on war exclusions Part 1 and Part 2) and to register your opinion on whether the government should establish a terrorism reinsurance pool. [See reader comments].

The last few weeks have been difficult for me. We lost good friends in New York. However, I am determined to move forward with life. On Friday, I enjoyed an uneventful flight from Dallas to attend a conference in Orlando and am glad I "got back in the saddle." I hope you are also in the process of restoring normalcy to your life. As you do, remember to be proud of your profession and the important role the industry will play in recovering from the September 11 tragedy.

I hope to see you at the IRMI Construction Risk Conference in New Orleans in a few weeks.

Best regards,

Jack

Jack P. Gibson
President
IRMI

Risk Tip

Weather Structures Can Help Manage Risks. A great many corporations and public entities (e.g., cities, towns, and universities) face a risk that operational revenue will be interrupted or extra expenses will be incurred not just from catastrophic weather events, which are typically well addressed by commercial insurance products, but also by continued inclement weather or weather which is adverse to operations over the long term. An example is continued heavy snowfall that strains removal budgets for all public entities or which suspends operations or attendance at public institutions.

The Alternative Risk Transfer community has begun addressing weather concerns directly either through insurance products, capital products, or financial derivative products. While derivatives are often used in a speculative manner, they may also be used as insurance is; that is, to offset financial losses resulting from abnormal weather patterns.

Many respected financial institutions are involved in weather structures (referring to all forms of weather risk financing programs). These include household names in the insurance industry, the banking industry, as well as many other financial institutions. There are between 25 and 50 active players in this market and the group is growing.

By: Richard B. Kushner
Director, Tradition Financial Services
Stamford, CT
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 Richard.

New Expert Commentary

We add new Expert Commentary to IRMI.com every week. There are now 206 articles on IRMI.com, and many more are in production. Below you'll find summaries of some recent additions with links to the articles.

Statutes of Limitation in Workers Compensation Cases—States differ with regard to the amount of time they will allow for a claimant to file a WC claim. James Pocius discusses the variation and provides some cost saving tips for risk management.
Is Computer Data "Tangible Property" or Subject to "Physical Loss or Damage"?—In this article, Catherine Rivard traces the evolution of court decisions dealing with the questions of whether computer data is "tangible property" or subject to "physical loss or damage" for purposes of insurance coverage.
Glorifying Form Over Substance: "Legally Obligated" in the CGL Insuring Agreement—Insurers may deny claims where a contractor, absent the filing of a lawsuit, repairs property damage caused by an obvious accident. Pat Wielinski discusses the scenarios, issues, case law, and provides practical pointers for avoiding this situation.

New IRMI Insights

Attack on America: The Insurance Coverage Issues—In part 1 of this article, IRMI research analysts conclude that most property and casualty war risk exclusions do not apply to claims arising from the September 11 terrorist attacks on America. In part 2 they explore how other policy provisions are likely to be applied to these claims.

IRMI Construction Risk Conference

Don't Miss IRMI Construction Conference's First-Ever Technology Showcase! This is a wonderful opportunity to learn about technology that is revolutionizing risk management programs, and will feature four cutting-edge technology companies:

CertificatesNow
Proven Path Technologies
Riskclick Inc.
Claims Master, by Lumtron Technologies, Inc.

If you are interested in participating in the 22nd IRMI Construction Risk Conference Technology Showcase in San Diego in 2002, please contact Paul Murray at (800) 827-4242, ext. 313, or contact us.

Click here to learn more about IRMI Construction Risk Conference.

IRMI Products & Services

Updated IRMI Glossary Published—The eighth edition of the popular Glossary of Insurance and Risk management Terms is now available from IRMI. The updated and expanded book provides plain English definitions of 2,500 terms. It is a very handy desk reference for those new to the risk management or insurance and is a great gift for clients. It costs only $24, and substantial discounts are available on orders of 11 or more.

How To Subscribe or Unsubscribe

A subscription to IRMI Update is absolutely free. Use the e-mail registration form to initiate or terminate your subscription.

IRMI Update—Issue #26

In This Issue