IRMI Update—Issue #74
An E-mail Newsletter for Risk and
Insurance Professionals
ISSN: 1530-7948
October 7, 2003
In This Issue
Colleague,
A new report from the Center for Legal Policy at the Manhattan
Institute provides a very revealing look at the lawsuit industry
in the United States. This well-written and documented report will
be a real eye-opener to many Americans, and I hope it is widely
read. Essentially, Trial Lawyers Inc.
is an effective comparison of the plaintiff's bar to a huge corporation.
Here is a brief summary of some of the facts it discloses:
- Trial Lawyers Inc.'s revenues are nearly $40
billion per year—more than that of Microsoft and
twice that of Coca-Cola. The overall tort system
costs in America are over $200 billion annually.
- It is recession-resistant and experienced a
record year in 2001, when much of the economy was
down.
- If tort costs continue to increase at the 2001
pace, they will exceed $4.8 trillion over the next
10 years—almost triple the size of the 2001 and
2003 Bush tax cuts combined.
- Free from antitrust actions, Trial Lawyers Inc.
is organized into cartels with alliances of firms
specializing in particular types of litigation who
share information, tactics, legal briefs, and clients.
They even help each other finance cases.
- Some trial lawyers are hauling in fees as high
as $30,000 per hour; there are a number of new billionaire
trial lawyers.
- Having contributed more than $470 million to
federal campaigns since 1990, Trial Lawyers Inc.
works hard to maintain its political influence.
The Association of Trial Lawyers of America was
the largest political action committee (PAC) contributor
to the Democratic Party in 2002.
While I had knowledge of many of the points covered in this report,
it was an excellent big picture look at the legal industry. This
free report is must reading for all risk and insurance professionals.
We've provided a link to the website where you can download a PDF
of the report at the bottom of this issue of IRMI Update.
In the meantime, I'd like to know what you think of our legal
system and what we need to do to fix it. If you've read the Trial
Lawyers Inc. report, I'd appreciate your thoughts on it as well.
For example, the report focuses on the plaintiff's bar. Was justice
done when the insurance industry and the defense bar were excluded?
[See reader comments.]
Have a great day!
Jack
Jack P. Gibson
President
IRMI
Make Sure Design Liability Is Covered—As
design-build projects increase in frequency, design-builders must
have the right insurance coverage to protect themselves and their
clients from uninsured risks. Often, the company in charge of both
the design and construction is a developer or a construction firm.
And all too often, the design-builder has no coverage for design
risks.
Here are some tips for design-builders and their clients regarding
design liability coverage:
- Think twice about relying on the professional
liability insurance of a subcontracted design professional;
that coverage may not be available when a problem
has to be resolved.
- Be careful with design or professional liability
endorsements to CGL policies since the coverage
may not match the actual risks of a design-build
project.
- Explore stand-alone design liability coverage
that will provide primary defense and indemnify
those parties harmed by negligence in design—even
if the claim is based on vicarious liability when
the design-builder hires a design professional as
a consultant.
Every construction process has enormous risks. With design-build
projects, some of those risks might be mitigated, but others can
result in massive claims. As more clients agree to use design-build,
they need to know that design risks are covered. For proper protection,
the design-builder should have adequate design liability coverage.
By: Eric Myers
Victor O. Schinnerer & Company, Inc.
Chevy Chase, MD
E-mail:
www.schinnerer.com
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 462 articles on IRMI.com, and many more are in
production. Below you'll find summaries of some recent additions
with links to the articles.
-
Workplace
Violence Programs—A Sound Investment—This
summer, a number of preventable homicides occurred
in American workplaces. Dr. James Madero offers
compelling reasons for workplace violence prevention
programs.
-
Performance
Based Seismic Design—Dr. Nathan Gould
explains Performance Based Seismic Design: what
it is, how it works, and why it is the seismic design
methodology of the future.
-
Private
Aviation: Being an Additional Insured—Private
air charters pose many risk management and insurance
challenges for clients. In this new corporate aviation
column, Adam Webster discusses what to watch out
for.
-
Jones
Act Status Issue Once Again Wastes Resources of
All—Michael Orlando discusses the recent
case of Becker v Tidewater and how it provides the
backdrop for the decades-old debate over Jones Act
versus Longshore Act status.
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
IRMI Online, please click
this link to go directly
to a summary of the new issues and information with direct links
into the publications.
Family Disaster Planning—Ten
Key Ingredients—Robin Olson discusses the importance
of developing a family disaster plan, communicating it to all family
members, and maintaining it for future emergencies.
The Secret of One
Firm's Safety Success—In a keynote presentation to IRMI
Construction Risk Conference attendees, Peter G. Vigue, president
of Cianbro Corporation and a highly sought-after speaker, will share
the story of a construction company's transformation to a company
that prioritized the safety of its workers and the general public
over schedules and profit margins. Implementing this aggressive
plan required organizational changes as well as a shift in the overall
corporate culture, from top management all the way down to the workers
on the site. Hear a captivating story of challenges, results, and
other unexpected benefits the company has reaped as a result of
these initiatives. The dramatic reduction in injuries—lost time
injuries fell from 100 to 1 over a 12-year period—is just the tip
of the iceberg in terms of the impact this change in philosophy
has had on the organization. Learn more about this session and others
at the 23rd IRMI
Construction Risk Conference.
New California
Workers Compensation Manual Published by IRMI—Levine
On California Workers Compensation Premium And Insurance
is a new reference manual designed specifically to help risk managers,
insurance buyers, agents, brokers, underwriters, and premium auditors
with operations or clients in the state of California. This new
manual will help you properly classify risks for premium determination,
apply experience rating rules, understand insureds' rights to claims
and rating information, understand and explain how rates are determined,
evaluate employee leasing, "sovereign nation," and other alternative
programs, deal with insurer insolvencies and the State Fund, handle
premium disputes, and negotiate important premium issues with the
WCIRB or underwriters. Levine on California
Workers Compensation Premium and Insurance is now available
on IRMI Online, IRMI CD, SilverPlume Sage, and in print. Follow
the link for more information
or to order a copy, please go call our customer service department
at 1-800-827-4242.
Sanford Warren has been writing on intellectual property
law issues for IRMI.com for 3 years. He is an attorney with Winstead,
Sechrest & Minick where he practices complex patent litigation in
the areas of complex patent interferences, trademark oppositions
and cancellations, and the management of worldwide trademark programs
and international software licensing. Before joining Winstead Sechrest
& Minick, Mr. Warren was a partner at Warren & Kennedy and, prior
to that, he was the head of the Intellectual Property Group of Gardere
Wynne Sewell, LLP, and served as intellectual property counsel for
American Airlines, Inc. For more information on Mr. Warren, see
his full biography and
a
list of his articles.
The report Jack discussed in this issue's editorial can be downloaded
in a PDF
file at no cost.
A subscription to IRMI Update is absolutely free. Use the
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