IRMI Update—Issue #111
An E-mail Newsletter for Risk and
Insurance Professionals
ISSN: 1530-7948
April 19, 2005
In This Issue
Colleague,
If you are reading this in your hotel room in Philadelphia as
you attend the annual RIMS conference, I hope you will plan to visit
us at our booth in the exhibit hall. IRMI is in #1709. My colleagues
and I would enjoy seeing you, and you can enter our drawing for
a subscription to IRMI Online
when you stop by.
"Captives Built To Last" will debut in Las Vegas next week, and
we still have a few seats left for it as well as for the Dallas
and Orlando seminar venues. Kate Westover and David Monday will
tell you what you need to know to determine the feasibility of using
a captive insurer to cover your company's (or your clients') risks.
Learn more or sign up at our Seminars section.
Thank you for subscribing to IRMI Update. This issue we highlight
some interesting articles we've recently added to our website that
I hope you find helpful. Read below to learn more.
All the best,
Jack
Jack P. Gibson, CPCU, CRIS, ARM
President
IRMI
Layer Your Equipment Security Techniques—Equipment
theft is a growing and expensive problem. While there are several
available physical security measures that can be taken, many work
sites are difficult to secure, so anything that can be done to make
equipment more safe or less desirable to thieves is vital. Because
some equipment is more at risk than other types, and some security
techniques cost more than others, it is useful to place equipment
security techniques in layers—the easiest and cheapest at the bottom,
the more expensive at the top:
Layer 1—All units should already
have a serial number on them. This must be recorded somewhere to
have any chance of recovering stolen equipment.
Layer 2—Add your serial numbers
to a secure national database that is used by police to identify
suspicious equipment. This allows police to identify you as the
owner of your equipment if it is found during an investigation,
even before the theft has been discovered.
Layer 3—Add as many high quality
company decals to the equipment as possible. Although a thief can
remove these, this will leave a trace that may help in an investigation.
Layer 4—Paint all or parts
of your equipment an unusual and bright color. This will deter thieves
who fear being seen moving such easily recognizable equipment.
Layer 5—Add Owner Applied Numbers
(OANs). Ideally these will be stamped on the equipment in both a
visible and hidden location, but even stenciled numbers can be useful
as thieves often overlook them.
Layer 6—Use locks and immobilizers.
If there is equipment nearby with no lock, it is that equipment
that will be stolen.
Layer 7—Install tracking devices.
More information on this technology is in my
March 2003
article.
To assess which layers to apply to what equipment, it is helpful
to know what type of equipment is most often stolen. Reports with
this and other national equipment theft statistics can prove helpful.
By: David J. Shillingford
National Equipment Register, Inc.
New York
www.NERusa.com
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 David.
There are now 652 risk management and insurance articles on IRMI.com.
Below you'll find summaries of some recent additions with links
to the articles.
-
When
Is Reinsurance Not Reinsurance?—Mike
Mead looks at the risk management implications of
reinsurance and excess insurance for captives. Lack
of regulation and standardization complicate the
matter.
-
Whether
Mold Cleanup Costs Are Covered Depends on Causation—"When
a covered event causes mold, the mold damage includes
the cost of removal." Kent Holland explains this
ruling by the New Jersey appellate court on a homeowner
dispute.
-
Supreme
Court Allows Age Discrimination Claims Based on
Disparate Impact—Based on a March 30,
2005, ruling, employers must review their policies
to assess the impact on older workers and address
any unintended consequences, even if not deliberate.
Paul Siegel explains.
-
Insurance
and the Law of Unintended Consequences—Barry
Zalma looks at how efforts by and for the insurance
industry have resulted in far greater problems:
rising costs, soaring litigation, increasing fraud,
and a reputation seemingly beyond repair.
-
Deming's
Point #5 as Applied to the Insurance Industry—When
focused on the customer, continuous process improvement,
through process mapping, has transformed insurance
organizations. John Pryor provides some examples.
IRMI has launched a new insurance continuing education program
for agents, brokers, underwriters, and construction-industry professionals.
The Construction Risk and Insurance Specialist (CRIS) continuing
education program is a specialized curriculum consisting of five
courses presented entirely online. Those who complete the program
may display the CRIS designation to certify their construction insurance
expertise and earn state insurance continuing education (CE) credit
in the process. The CRIS program is quite affordable, and insurance
CE credit is also available in many states. The self-paced courses
and exams may be taken from any computer with Internet access.
Learn more.
In the
IRMI Update
110 Message from the Editor, Jack Gibson listed some of the
barriers to disaster planning and asked readers for their thoughts
on how to overcome them. Below are some of the responses, edited
for length and content.
-
One of the most effective and communicative languages
in corporate America is the profit and loss (P&L)
statement, return on investment (ROI) analysis,
and balance sheet integrity. A risk manager needs
to communicate to senior management—in their language—and
outline the benefits of a business continuity management
plan and the corresponding cost to implement. The
cost must be realistic and not be over the top by
"matching" the potential risk, not the absolute
worst-case scenario.
My advice to brokers/agents is to be proactive
in the suggestive, developmental, and implementation
process. A reactive broker will find himself/herself,
chasing an aggressive, proactive prospector who
is hungry for new clients. I would also recommend
that brokers create "off-the-shelf" products such
as business continuity management plans, return-to-work
programs, insurance audit procedures, etc., to immediately
respond to the clients' needs.
—Dwight Garner, VP Risk Management,
Setnor Byer Insurance & Risk, Plantation, FL
-
I read your comments and thought about our agency's
struggle through three hurricanes last fall and
the first tenet of emergency care—you can't help
someone if you are ill prepared ... When I first
read your commentary I thought not of helping our
clients prepare but of our industry (agents and
carriers) being prepared. We can't help our clients
if we aren't "up and running," and power is the
lynchpin. You can't even use the phone (most phone
systems use computers which require power to operate),
and how about that paperless office system? Need
a computer to look up the dates? Oh, I'll just use
my laptop. Oops, forgot about the network.
To prepare for the unknown disaster we must remember
the four "P's" in order of importance. First P is
PEOPLE—we need a system to able to contact through
cell phones and locations of our fellow staff members.
We must make sure their family members and homes
are taken care of. Once they are taken care of,
we can then help others and our clients. Next is
PLACE—our place of operations. If destroyed or damaged,
where will we work, and what will we need to do
our work? Third is POWER. So our office is intact,
but without power. How much locally generated power
we will need to run minimal operations to service
our clients (be sure to include the coffee maker
in the assessment and don't forget about Internet
access in case the telephone poles fly away)? And
the final "P" is PERFORMANCE—what must we do to
be able to perform for our clients who will be in
the "same boat."
The old axiom "charity begins at home" should
be changed to "disaster preparedness begins at home,"
for if we prepare ourselves and our businesses for
all contingencies, then we'll be better able to
help our clients with their disaster plans. But
try not to wait and learn these lessons firsthand.
I don't recommend it!
—Wesley Wurth, Director of
Underwriting,
CHAPP, Inc., Dundee, FL
-
"Speed"—one word says it all. In a disaster,
a firm needs to be prepared for speed—a speedy response!
In a manmade building construction disaster, you
need speed to
- Secure the site from any additional
loss
- Get your insurer and their professionals
on-site to assist with contingency
planning
- Get new space for the business/school
to continue their business mission
- Lock-in the best and most qualified
local and national design professionals
to assist in the post-disaster forensics
that will be required, before the
responsible party(ies) lock in these
professionals for their side
- Control the press and how the
story is reported
These statements come from firsthand recent experience
on a construction disaster, with potential claims
in the millions. Be prepared in your planning for
speed. Control the situation before it controls
you!
'
—Tim Trachsel, AIC, Principal/Manager,
The T2 Group, LLC, Cincinnati, OH
-
Here are some thoughts about the impediments
to disaster recovery preparedness you mentioned:
- Lack of a senior level business
continuity management (BCM) champion—usually
caused from incompetent senior level
executives.
- Reluctance of business units
to spend time and money—often used
as an excuse for not doing the job
properly. If business units had
no time or money to spend for BCM,
they would be ignoring their customers'
needs. These businesses probably
will not exist long.
- Resources are already constrained—this
is always the case when there are
a lot of resources. If you implement
BCM properly, you will find why
resources are constrained. Then
develop solutions.
- "It will never happen to us."—Every
ruined company thought this before
a surprise disaster occurred. Do
you really want to become that kind
of failed company?
—Susumu Ichinoseki, Independent,
Japan
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