Advisory

This is a trick question. Investigative costs that are a necessary part of defending an officer, director or the Company that has been sued, are generally insured under Directors and Officers (D&O) policies, subject of course to the insurer’s agreement that such costs are reasonable and necessary for a proper defense of covered allegations.  However, when you are referring to internal investigations or governmental or regulatory investigations that occur prior to any charges being levied—the answer is less clear, and sometimes “no”.

After years of declining cost, Workers’ Compensation expense is poised for a jump.  As a result of escalating claims costs, fueled by medical inflation and rising wage replacement costs, Workers’ Compensation insurance rates are increasing.

We live in a world where leading U.S. manufacturers often manufacture very little. They remain masters of design, quality control and distribution.  However, to remain competitive, the actual manufacturing process is outsourced to offshore companies that can deliver at lower costs.

The policies and procedures used in the administration of lenders’ forced placed insurance have recently received increased scrutiny by regulators. While most of the attention thus far has been focused on lenders that have subsidiaries that actually underwrite the forced placed coverage, many of the issues (e.g. unreasonably high rates, communication breakdowns with the borrower and incorrect placement issues) could also give rise to additional regulation and lawsuits against lenders that outsource forced placed services.

Many educators’ legal liability (ELL) insurance carriers are amending their policy to specifically exclude acts of sexual/physical abuse and molestation. Underwriters contend that the ELL policy form was never designed to cover claims alleging bodily injury, and that the additional exclusion merely clarifies the policy’s intent that such events are more appropriately covered by a school’s general liability policy. However, such exclusionary wording could have unintended consequences for your ELL policy.

I’m sure you have seen and heard the many stories of business owners who suffered uninsured losses due to the power outages caused by the recent storms in the Northeast. Downed trees and limbs were the primary cause of failed power lines for millions.

As you may be aware, a recent news article noted that a large multi-national bank is being sued for $15 million for negligence following a robbery and homicide at a vacant building owned by the bank through foreclosure. Liability coverage for bank owned/foreclosed properties is handled quite differently from bank to bank, and coverage limits available may be insufficient to cover this type of catastrophic liability claim.

Financial institution bonds are, in contrast to management liability policies (such as D&O and employment practices), written on standardized coverage forms. Although this provides buyers with a more clear understanding of the protection afforded, unfavorable terms and conditions are often accepted when more favorable language may be available. Below are several examples of common bond provisions that can often be amended to broaden your protection...

In my day to day risk management consulting work I am frequently asked to review contract language, with emphasis on the insurance requirements...

If your school uses social networking to communicate, you may be exposed to risks that are not covered by your current insurance program. While much of the case law concerning vicarious liability of personal injuries perpetrated on the internet is still being written, even a school that is ultimately acquitted of damages could suffer significant defense costs...