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
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.
-
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 website.
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
website.
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.
A subscription to IRMI Update is absolutely free. Use the
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