IRMI Update

Risk Management & Insurance Commentary, Tips, and Tactics
October 8, 2009 | Issue 215 | ISSN: 1530-7948


In This Issue


Colleague,

Congratulations to Kathryn A. "Kate" Westover for being named the recipient of the 2009 Captive Insurance Companies Association (CICA) Distinguished Service Award—the highest award possible in the captive insurance industry. CICA could not have picked a more appropriate person to recognize with this award when they presented it to her earlier this year. She is a true professional and a wonderful educator who wholeheartedly believes in the captive concept.

With over 20 years' experience in the captive insurance industry, Kate is a practitioner, author, and speaker on this topic. Her two companion books, Captives and the Management of Risk and Captive Practices and Procedures are published by IRMI, and she also contributes articles to both The Risk Report and Captive Insurance Company Reports.

She is vice president of Alternative Risk Financing Services for Innovative Captive Strategies, Inc., and serves as executive director for the Community Blood Centers' Exchange Risk Retention Group. Kate holds a B.A. and M.A. from Oxford University, England, as well as the CPCU designation.

Congratulations, Kate, on this well-deserved honor.

Lastly, I would be remiss if I didn't mention the upcoming IRMI Construction Risk Conference. It is shaping up to be one of our best conferences ever, and we still have room for you. All 50 states have approved it for insurance CE credit, and you can get as much as 27 hours credit in most states if you attend all the sessions. See the agenda and register on IRMI.com by October 16 to save $100.

All the best,

Jack

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


Risk Tip

Address the Electronic Data Liability Coverage Gap

A recent Risk Tip pointed out the importance of reading the policy. It used as an example the lack of coverage for electronic data claims. That's correct. The standard ISO CGL and most other CGL forms exclude liability coverage for damage to electronic data.

This gap can be partially closed with ISO Electronic Data Liability endorsement (CG 04 37 12 04). It does so by amending the definition of "property damage" to include loss of or damage to electronic data that results from damage to tangible property, such as a computer or server.

Many types of businesses face exposures that give rise to a need for this type of coverage. For example, the owner of a building might be sued based on its alleged negligence in maintaining plumbing when computers are destroyed by a water leak. A tenant might be sued based on its alleged negligence. An electrical contractor could cause a short-circuit that wipes out a firm's computer equipment. The list goes on and on. It's worth getting a quote and considering the coverage.

Unfortunately the CG 04 37 endorsement only partially plugs the liability coverage gap created by the exclusion. Note, for example, that the endorsement would still not provide coverage for liability arising from the transmission by the insured of malicious code, viruses, etc., since the loss does not result from damage to physical injury to tangible property. Specialized cyber liability policies are necessary for this broader scope of protection.

By: Jerry Trupin, CPCU, CLU, ChFC
Insurance Consultant/Expert Witness, Trupin Insurance
Services
Briarcliff Manor, NY

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 Jerry.
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What's New in Your IRMI Library

Managing "Distressed Project" Risks

As a result of the recession, both the residential and commercial real estate "roller coasters" have raced toward the bottom of this economic cycle in declining property values and sales/leasing activity. Lenders' balance sheets have ballooned with distressed and nonperforming assets.

Contractors and developers with patient capital and a long-term investment mindset have an opportunity to take over some assets at bargain prices, but these transactions present unique risks that must be addressed. An article included in the latest supplement to Construction Risk Management explores some of these risks as well as the options for evaluating the opportunities. If you subscribe to Construction Risk Management, read the article on your chosen platform:

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.


Recent Articles on IRMI.com

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.


IRMI Featured Publication

The Handbook for Risk Professionals

Designed to help risk management and financial executives start and maintain a risk management program, Practical Risk Management from IRMI discusses the entire process from exposure identification through implementation and monitoring of the program. You’ll get suggestions for risk management practices to implement, concise and understandable explanations of most types of insurance coverage, and tips on the best coverage options. See the table of contents and learn how you can become an even more valuable adviser.


Your View

2010 Market Predictions

IRMI Update 214 asked readers for their views on taking advantage of opportunities for lower cost construction and handling the risk with surety bonds. Below are some of the responses.

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