IRMI Update

Risk Management & Insurance Commentary, Tips, and Tactics
August 5, 2009 | Issue 211 | ISSN: 1530-7948

In This Issue

"Effective Contractual Risk Transfer in Construction"
Fine-Tune Your Crime Insurance Coverage
Is Pollution Personal Injury?
New Expert Commentary
Prevent Coverage Gaps

Colleague,

As part of the upcoming 29th IRMI Construction Risk Conference, five experienced risk management practitioners will provide what they consider to be the best practices for ensuring a successful wrap-up. As moderator of the panel for "Wrap-up Do's and Don'ts," I would like your help in developing the topics to be covered. Specifically, I'm looking for the "worst practices" of wrap-up sponsors and participants.

For example, perhaps you've witnessed a sponsor trying to cram too large a deductible down a small contractor's throat, or owners not revealing that a wrap-up would be used until after the contractors bid the job, or forcing contractors to deduct premium that their insurers would not be willing to give back. From the sponsor's perspective, maybe you've seen contractors submit claims from other projects, fail to follow safety requirements, or refuse to provide legitimate insurance premium deductions.

So, tell us your horror stories. What is the worst practice you've seen on a wrap-up? Provide a brief description, and explain the trouble it caused. We'll publish the "worst" stories in the next IRMI Update and use them to develop a superior conference panel discussion. [See reader responses].

This will be an interesting and lively panel discussion, and I hope to see you there. Early-bird registration will end shortly, on August 31, and you can save $100 by registering now. Check out the agenda, see all the benefits of attending, and register on IRMI.com. I look forward to seeing you on the Potomac.

All the best,

Jack

Jack P. Gibson, CPCU, CRIS, ARM
President
International Risk Management Institute, Inc.

New from IRMI

White Paper: "Effective Contractual Risk Transfer in Construction"

Get this valuable white paper from IRMI at no charge when you sign up for IRMI Construction Risk Manager—a new, free monthly e-mail newsletter with the same integrity and quality you've come to expect from IRMI Update. If you buy, sell, underwrite, or litigate construction insurance or manage construction risks, this newsletter will become an essential part of your tool belt. Learn more.

Risk Tip

Fine-Tune Your Crime Insurance Coverage

Employee dishonesty coverage usually has two features that can affect recovery. One is that property usually is valued at its actual cash value, not replacement cost, and the other is that knowledge of a prior act of dishonesty by an employee terminates all future coverage for that employee.

Some insurers will provide replacement cost valuation, but often, it is not offered unless requested. This option should always be requested to cover property taken by an employee on the same recovery basis as if it were taken by a non-employee.

Most employee dishonesty forms have an individual employee cancellation condition which applies if the employer knows that the employee has previously committed a dishonest act. Some insurers, if asked, will grant a threshold that must be exceeded before an act of dishonesty will terminate coverage. For example, some insurers will place the threshold at $1,000 or so upon request.

These are two important improvements that can be made to virtually any crime insurance program which will result in little to no additional premium.

By: Kenneth Bush, Executive Vice President
Insurance Audit & Inspection Co.
Indianapolis, IN

GET PUBLISHED IN IRMI UPDATE: 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 acknowledge your contribution as we did for Kenneth.
Submit an IRMI Update risk tip.

What's New in Your IRMI Library

Is Pollution Personal Injury?

For long-tail claims involving pollution occurring before 1996, one of the commercial general liability (CGL) insurance coverage issues that can arise is whether allegations of trespass, nuisance, or interference with the use and quiet enjoyment of property qualifies as "wrongful entry" or "invasion of the right of private occupancy" under the definition of "personal injury." A handful of courts accepted such arguments and found coverage. Most courts, however, rejected such arguments, holding that pollution losses couched in terms of trespass or nuisance were not covered.

In 1996, a total pollution exclusion was included in the personal injury section of the CGL policy, effectively ending the debate. However, claims still arise involving pollution released (and triggering policies written) prior to the revision. The latest supplement of Pollution Coverage Issues explains the nuances and enumerates the states with pro-policyholder and pro-insurer legal precedent. You can expand your knowledge of this topic by reading the new section in the platform to which you subscribe:

For summaries of other new and updated information in your IRMI library, go to What's New on IRMI Online or What's New in SilverPlume.

New Expert Commentary

There are over 1,100 risk management and insurance articles on IRMI.com. Below you'll find summaries of some recent additions with links to the articles.

Questions and Answers on Additional Insured Issues—Part 2—More questions dealing with other insurance, certificates, and miscellaneous issues are tackled.
Cyber Risk—Data Damage and Destruction beyond the Naked Eye—William Austin asks, "How prepared is your organization for a cyber peril?"
Managing the Risks of a Vacant Home—Jack Hungelmann urges those with empty homes to consider risk management/insurance implications.
ERM: Add Spreadsheets to Your Risk Inventory—Chris Duncan explains how our ability to achieve ERM success can be limited by the tools we use.
Claims Adjusting and the Laws of Immunity—Claim representatives must fully investigate claims against family members. Elise Farnham explains.
Insurer and Environmental Consultant Have No Duty To Warn of Mold—Kent Holland describes a case limiting premises liability.
Thwarting Piracy and Terror on the High Seas—David Nicastro says we need a real-world, cost-effective approach to protect crews and vessels.
Recession Keeps Commercial Insurance Premiums under Pressure—RIMS Benchmark Survey™ shows continued competition but says depletion of insurance capacity signals rising rates.

IRMI Featured Publication

Prevent Coverage Gaps

You're just a few clicks away from having an expert at your fingertips. Commercial Liability Insurance from IRMI can help you quickly identify and prevent coverage gaps between primary, umbrella, and excess liability forms. With help from its practical discussions of coverage alternatives, you can prepare superior specifications, submissions, and proposals. You also get a "two-for-one" deal because Commercial Liability Insurance provides analysis of both CGL and umbrella policies, rather than paying a separate fee for each. Plus, the related discussion of supportive court cases is extensive and up to date. See a detailed table of contents or request a free demo.