The Terrorism Risk Insurance Act of 2002 was long awaited by the U.S. insurance industry. That this Federal terrorism insurance backstop will likely have the long-run effect of assuring the availability of terrorism coverage for most commercial insureds is the good news. The bad news is the act forces insurers into a mad scramble during the busiest time of the year for the industry.

Briefly, the Act gives commercial lines insureds 30 days to accept or decline terrorism coverage after receiving a quote from their insurers. Until that time, the insurer is exposed because that part of any exclusion which applies to a certified act of terrorism is null and void, and the insurer has no additional premium for the exposure. If I were an insurance company CEO, my number one priority at the moment would be to comply with the Act and start the clock running. As a result, underwriters will be unable to focus on their January 1 renewals.

This is likely to make what would already have been a challenging renewal season into a very frustrating and difficult time for all. I wish you the best in meeting the challenges you encounter. Our first article on the effects of the Act will be posted on IRMI.com on Friday, December 20. Be sure to check the home page to link to it.

As we head into the holidays and a new year, don't let the challenges of the current insurance marketplace get you down. While you need to stay focused and do your best work for your employer and your customers, also find time to spend with your family and to give thanks for the blessings you have.

Speaking of blessings, I'd like to thank you for choosing to be part of our subscriber family. All of us at IRMI send you our best wishes for peace, happiness, good health, and prosperity during the holidays and the New Year.

All the best,

Jack

Jack P. Gibson
President
IRMI

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New Expert Commentary

There are now 368 articles on IRMI.com, and many more are in production. Below you'll find summaries of some recent additions with links to the articles.

Insurance for A-Side D&O Exposures after Enron—In today's difficult legal and economic climate, has pure directors and officers liability coverage become a riskier proposition? New Expert Commentator John E. Black Jr. examines the issues.
Auto versus Mobile Equipment in the CGL—Craig Stanovich helps with the challenge of determining whether the business auto or commercial general liability policy will apply to liability arising out of mobile equipment and autos.
Insurance Coverage Specifications in the Hard Market—It's important to cover all the potential areas of loss your firm faces, even if insurance is not available or affordable. Peter Polstein reviews coverage extensions you should consider.
When Errors Occur in a Reinsurance Relationship—Larry Schiffer examines the errors and omissions clause in reinsurance policies, including its history, proper drafting, use and misuse, and court interpretations.
Using Information To Fight Equipment Thieves—In his continuing series on heavy equipment theft, David Shillingford considers ways in which information can be used to fight crime.

IRMI Construction Risk Conference

Construction Risk Conference Handouts Available Online—The speakers' handouts from the 22nd IRMI Construction Risk Conference are now available on IRMI.com. Over 30 handouts, which cover such topics as insuring work in progress, contract risk management, bidding your insurance program, loss control, design-build issues, and more, may be downloaded at no cost.

Captive Seminars

Captive Questions? Get the Answers You Need!—With the hardening market, many are looking to captives to solve their insurance problems. But the concept can be so confusing.

How do wholly owned, group, and rental captives compare to traditional alternatives?
What's the difference between a risk retention group and an association-sponsored captive?
How do rent-a-captives work?
What is a protected cell captive?

IRMI has the answers in its popular 2-day seminar, "Captives Insurance Solutions for the Middle Market," back by popular demand. Learn how group captives work and whether they can provide the help you need to solve your insurance dilemma. The seminars are scheduled for Las Vegas February 19-20; Chicago February 25-26; and New York City March 4-5, 2003. Learn more details by calling (800) 827-4242.

Featured Expert Commentator

Michael Rossi, president of Insurance Law Group, writes the Cyber Insurance column for IRMI.com. He became an Expert Commentator in the spring of 2000 and has written 13 articles and developed a stand-alone e-commerce insurance policy chart that he keeps current. His articles focus on risks inherent in businesses' increasing reliance on technology. See a list of all Mr. Rossi's IRMI.com articles and read his biography for more information on Mike and his firm along with contact information.

How To Subscribe or Unsubscribe

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IRMI Update—Issue #55

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