e&o/d&o coverages and trends webb hubbell,crm,cwca vice-president and counsel the mclaughlin...
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E&O/D&O COVERAGES AND TRENDS
WEBB HUBBELL,CRM,CWCA
VICE-PRESIDENT AND COUNSEL
THE MCLAUGHLIN COMPANY
WASHINGTON,DC
202-293-5566
WHUBBELL@MCLAUGHLIN-ONLINE.COM
THIS BUSINESS IS CYCLICAL
UNDERWRITING -- SOFT MARKET
• 1991-EARLY 2001
• 2004 -- PRESENT
• LOTS OF CAPACITY
THIS BUSINESS IS CYCLICAL
UNDERWRTING -- HARD MARKET
• 1986-1991
• 2001-2004
• ?
WHAT HAS UNDERWRITERS NERVOUS?
• GLOBAL WARMING
• PROPERTY LOSSES
• CLAIMS AGAINST CONTRIBUTORS
• CONGRESSIONAL ACTIONS
• INVESTOR CLAIMS
WHAT HAS UNDERWRITERS NERVOUS?
SUBPRIME CRISIS
• RISING DELINQUENCIES
• MORE THAN 50 MORTGAGE LENDERS BANKRUPT
• INSURANCE COMPANY AND PENSION PLAN EXPOSURE
• LAWSUITS AGAINST COMPANIES THAT INVESTED
• LAWSUITS AGAINST ORIGINATORS
WHAT SHOULD MAKE YOU NERVOUS
CYBERISK
• Failure of your network security • Failure to protect or wrongful disclosure of private or confidential
information • Failure to protect Personally Identifiable Information from
misappropriation • Violation of any federal, state or local privacy statute alleged in
connection with failure to protect private information.
WHAT SHOULD MAKE YOU NERVOUS
FIDUCIARY LIABILITY
• Ohio WC Fund Problems
• San Diego
• By one estimate, state and local governments owe their current and future retirees roughly $375 billion more than they have
committed to their pension funds.
• Barclays Global Investments has calculated that if America’s state pension plans were required to use the same methods as
corporations, the total value of the benefits they have promised would grow 22 percent, to $2.5 trillion. Only $1.7 trillion has been
set aside to pay those
WHAT SHOULD MAKE YOU NERVOUS
IMMUNITY
• Emergency Immunity
WHAT SHOULD MAKE YOU NERVOUS
THIRD PARTY CONTRACTORS
WHAT SHOULD MAKE YOU NERVOUS
EMPLOYMENT RELATED PRACTICES
Three of five businesses will be sued this year by an employee or a former employee over an employment practice
Employment practices suits account for 20% of all Federal Court filings
56% of all employment practice filings going to trial result in a verdict for the plaintiff employee
The average jury award is S250.000, with 15% exceeding $1 million
33% of wrongful termination verdicts have punitive damages equal to or exceeding compensatory damage.
WHAT SHOULD MAKE YOU NERVOUS
MEDIA LIABILITY
• BLOGS
• Newsletters
• Websites
• Trademark and Copyright
WHAT SHOULD MAKE YOU NERVOUS
KIDNAP AND RANSOM
• Foreign Travel
• E-mail Attacks
AFFIRMATIVE STEPS
D&O COVERAGE ISSUES
Appendix
http://dandodiary.blogspot.com
http://webbsays.blogspot.com
AFFIRMATIVE STEPS
ERM/RM
CRM
RIMS
AFFIRMATIVE STEPS
CONTRACT REVIEW
Lawyers versus Insurance Consultants
APPENDIX
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