IRMI Update—Issue #106
An E-mail Newsletter for Risk and
Insurance Professionals
ISSN: 1530-7948
February 8, 2005
In This Issue
Colleague,
George Head is not only a risk management guru, but a friend
as well, and I am very excited to announce his new affiliation with
IRMI. In a new service especially designed for IRMI Update subscribers,
George will provide personalized advice on risk management issues
in a unique question-and-answer format. Appropriately called "Ask
George Head," this no-cost service will give you access to George's
knowledge, resources, and many personal contracts developed in working
with the Associate in Risk Management (ARM) designation.
All you have to do to seek George's advice and counsel is to
fill out the form.
An e-mail will be sent to George, and he will personally respond
to your inquiry. Periodically we will publish the questions and
answers on IRMI.com, without names or particulars, so your anonymity
is assured. George has also agreed to become an IRMI.com expert
commentator on risk management ethics. With the current focus on
Eliot Spitzer's accusations and legal actions, this is a topic that
begs for attention from a well-respected risk management guru like
George. His first article can be found in the
Risk Management—Ethics
subweb.
I sincerely hope you will try "Ask George Head" and recommend
it to your friends and colleagues. Thank you again for subscribing
to IRMI Update.
All the best,
Jack
Jack P. Gibson
President
IRMI
Assure That Wrap-up Program Limits Are
Adequate—Many, if not most, general liability insurers are
no longer providing Contractors "Excess of Wrap-Up Coverage." Thus,
contractors are finding that the only coverage they have on a wrap-up
or owner-controlled insurance program (OCIP) is the wrap-up itself.
They can no longer rely on their own insurers if there should be
a problem with a wrap-up's limits.
Contractors and their brokers should therefore ask for and review
the limits of each wrap-up in which they are enrolled. In this day
of large verdicts, the potential does exist for limits to be exhausted.
Also, a wrap-up is typically in effect for multiple years, and insurers
can encounter financial problems in the future.
Are the wrap-up's limits annual or for the project duration?
As there are more and more "rolling wrap-ups" that becomes even
more important. Under a rolling wrap-up is the limit on each project
or for the numerous projects covered under the rolling wrap-up?
Do you think the limits are adequate for a project (or projects)
of this size, duration, and risk levels? If you are a subcontractor,
you might even consider trying to opt out of enrollment in the wrap-up.
Additionally, during the project, and even when the project is
over and claims are still being paid and administered, the enrolled
contractor should regularly (quarterly) review the total paid and
total incurred.
As contractors can no longer rely on its own insurance program
to "be there" if a wrap-up should exhaust its limits or the wrap-up
insurer financially fail, they and their insurance representatives
should look at the wrap-up as closely as they do their own insurance
program.
Conversely, sponsors of wrap-up programs need to be cognizant
of these issues when planning their programs. By providing adequate
limits and an adequate duration for the completed operations coverage,
they can reduce resistance to their programs and better protect
all parties.
By: Frank Keres
Construction Risk Associates, Inc.
Brookfield, WI
Suggest a Risk
Tip. Send us a practical tip (less than 300 words) for
identifying and managing risks, buying insurance, managing claims,
or filling gaps in insurance coverages.
Submit your tips.
We'll acknowledge your contribution as we did for Frank.
There are now 628 risk management and insurance articles on IRMI.com.
Below you'll find summaries of some recent additions with links
to the articles.
-
Why
Link Risk Management and Ethics? —Risk
management guru Dr. George Head joins IRMI's group
of expert commentators on the topic of risk management
ethics, and in this article, explains the importance
of both.
-
Fourth
Quarter Survey Shows Significant Softening in Commercial
P/C Market —The Council of Insurance
Agents & Brokers survey shows a continuing significant
decline in premiums, with most large and medium
accounts showing a 7-10 percent drop in premium.
-
Court
Reporting/Deposition Services: What You Should Know
—In this quarter's Litigation Management
column, Michael Boutot takes a look at the role
of court reporters, their history, types, qualifications,
functions, and cost factors.
-
"What
Performance Did the Parties Bargain For?"—In
California, wrongfully terminated contractors will
likely not be able to recover from owners their
future lost profits resulting from their inability
to obtain bonds. Marilyn Klinger explains.
-
Dealing with Ambiguities in Design-Build Contracts—Mike
Loulakis discusses recent case law supporting the
view that an owner retains liability to the design-builder
when it provides faulty or ambiguous information
to bidders.
We have recently updated IRMI Online to include the latest issues
of our newsletters, The Risk Report,
Captive Insurance Company Reports,
and Strategic RM, as well as
supplements to a number of the reference manuals. See a
summary of all the new
stuff with direct links into the publications.
Mark your calendars for the 25th IRMI Construction Risk Conference
to be held November 7–10, 2005, in Las Vegas. If you have a topic
you'd like to see, are or know of a good speaker, or otherwise want
to provide input on this year's Conference, send us your suggestions
by February 15. For more information, see the
speaker information
section of the Conference subweb.
IRMI Update is sent to subscribers by plain text e-mail twice
each month. To initiate your free subscription, use the
e-mail registration form.