Elmquist & Zitzloff Insurance Agency Blog

Elmquist & Zitzloff Insurance Agency Bloghttp://www.eandzagency.com/blog/View Elmquist & Zitzloff Insurance Agency's Website Blogen-uspostmaster@www.eandzagency.comInsurance Website Builder - www.insurancewebsitebuilder.comurn:uuid:032ce37c-5c82-488e-9e44-09a581e25560urn:uuid:287c96d3-1d1f-417d-8571-ebf3daa25f8bInternet Crime Complaint Center Reaches 2 Million EntriesInternet Crime Complaint Center Reaches 2 Million Entries Source: FBI 16 Nov 2010 A milestone entry in cyber crime was reached on November 9, 2010, when the Internet Crime Complaint Center (IC3) logged its 2 millionth consumer complaint alleging on...Wed, 17 Nov 2010 11:54:26 -0600Internet Crime Complaint Center Reaches 2 Million Entries Source: FBI 16 Nov 2010 A milestone entry in cyber crime was reached on November 9, 2010, when the Internet Crime Complaint Center (IC3) logged its 2 millionth consumer complaint alleging online criminal activity. The IC3, a partnership between the FBI and the National White Collar Crime Center, became operational in May 2000 and received its 1 millionth complaint seven years later, on June 11, 2007. It took half that time to receive the 2 millionth complaint, which illustrates the IC3’s increased visibility and the continued growth of cyber crime. The IC3 receives, develops, and refers cyber crime complaints to local, state, federal, and international law enforcement agencies. The IC3 gives cyber crime victims a convenient and easy-to-use reporting mechanism that alerts authorities of suspected criminal or civil violations. Since its inception, the IC3 has referred 757,016 criminal complaints to law enforcement around the globe. The majority of referrals involved fraud in which the complainant incurred a financial loss. The total reported loss from these referrals is approximately $1.7 billion, with a median reported loss of more than $500 per complaint.* Many complaints involved identity theft, such as loss of personally identifying data, and the unauthorized use of credit cards or bank accounts. The IC3 uses information from the complaints to detect emerging trends and proactively fight consumer victimization through educational efforts with project partners, various publications and the consumer education website, <a href="http://www.lookstoogoodtobetrue.com">www.lookstoogoodtobetrue.com</a>. urn:uuid:62873366-80bd-43ae-9344-19f70a600bffStudy Shows Dog Bite Claims Topped $400 Million in 2009; Payouts Have Grown 30% in Six YearsStudy Shows Dog Bite Claims Topped $400 Million in 2009; Payouts Have Grown 30% in Six Years Source: Insurance Information Institute 20 Aug 2010 Dog bites accounted for more than one-third of all homeowners insurance liability claims paid out in 20...Fri, 20 Aug 2010 11:48:56 -0500Study Shows Dog Bite Claims Topped $400 Million in 2009; Payouts Have Grown 30% in Six Years Source: Insurance Information Institute 20 Aug 2010 Dog bites accounted for more than one-third of all homeowners insurance liability claims paid out in 2009, costing $412 million and up 6.4 percent from 2008, according to the Insurance Information Institute (I.I.I.). An analysis of homeowners insurance data by the I.I.I. found that the average cost of dog bite claims was $24,840 in 2009, up slightly from $24,461 in 2008. In fact, over the six-year period since 2003, the cost of these claims has risen nearly 30 percent. Additionally, the number of claims increased by 4.8 percent to 16,586 in 2009 from 15,823 in 2008. "The rise in dog bite claims over the last seven years (2003-2009) can be attributed to increased medical costs as well as the size of settlements, judgments and jury awards given to plaintiffs, which have risen well above the rate of inflation in recent years," said Loretta Worters, vice president at the I.I.I. More than 4.7 million people in the United States are bitten by dogs annually, and nearly 900,000 of those, half of them children, require medical care, according to the Centers for Disease Control and Prevention (CDC).Of those injured, 386,000 require treatment in an emergency department and about 16 die. The rate of dog bite related injuries is highest for children aged five to nine years old; the rate decreases thereafter. Almost two-thirds of these injuries among children ages four years and younger are to the head or neck region. Injury rates in children are significantly higher for boys than for girls.With more than 50 percent of bites occurring on the dog owner’s property, the issue is a major source of concern for insurers. There are three kinds of law that impose liability on owners: - Dog-bite statute: The dog owner is automatically liable for any injury or property damage the dog causes, even without provocation. - “One-bite” rule: In some states, the owner is not held liable for the first bite the dog inflicts. Once an animal has demonstrated vicious behavior, such as biting or otherwise displaying a ‘vicious propensity’, the owner can be held liable. Some states have moved away from the one-bite rule and hold owners responsible for any injury, regardless of whether the animal has previously bitten someone. - Negligence laws: The dog owner is liable if the injury occurred because he or she was unreasonably careless (negligent) in controlling the dog. In most states, dog owners are not liable for losses incurred by trespassers who are injured by a dog. A dog owner who is legally responsible for an injury to a person or property may be responsible for reimbursing the injured person for medical bills, lost wages, pain and suffering and property damage. “Some people purchase dogs for the purpose of guarding their homes; however, deadbolt locks and home security systems are safe burglary deterrents, which will often earn you a discount on your insurance premium,” said Worters. Homeowners and renters insurance policies typically cover dog bite liability. Most standard homeowners policies provide policyholders with anywhere from $100,000 to $300,000 in liability coverage. If the claim exceeds those limits, the dog owner is personally responsible for all damages above that amount, including legal expenses. A liability policy also provides no-fault medical coverage in the event a dog bites a friend or neighbor. This enables them to submit their medical bills directly to the homeowner’s insurance company. Homeowners can generally get $1,000 to $5,000 worth of this coverage. Most insurance companies will insure homeowners with dogs. However, once a dog has bitten someone, the insurance company may charge a higher premium or exclude the dog from coverage. Some companies require dog owners to sign liability waivers for dog bites. Some will cover a pet only if the owner takes the dog to classes aimed at modifying its behavior. A single lawsuit—even if won by the dog owner who has been sued—can end up costing hundreds of thousands of dollars in legal fees and lost wages. The greater a person’s assets, the more potential there is for risk. The personal liability coverage available through a standard homeowners or automobile policy simply may not be enough. Therefore, the I.I.I. advises homeowners to consider purchasing a personal excess liability policy, which protects against personal liabilities, such as dog bites, that could impact a substantial portion of assets. Umbrella liability coverage usually ranges from $1 million to $10 million, and covers broad types of liability. Most insurance companies have required minimum amounts of underlying coverage—typically at least $250,000 of protection from an auto policy and $300,000 of protection from a homeowners policy. If you own a boat, you must also have boat insurance with a specified minimum amount of coverage.urn:uuid:145daa94-76d2-44fa-b6ff-95ae7cb84340A Rash of Bedbug Infestations May Take a Bite Out of InsurersA Rash of Bedbug Infestations May Take a Bite Out of Insurers Source: Business Insurance The pesky critters have been around for centuries and were the bane of American society in the 1700s. Their popularity may have waned since then, but bedbugs a...Wed, 18 Aug 2010 12:20:30 -0500A Rash of Bedbug Infestations May Take a Bite Out of Insurers Source: Business Insurance The pesky critters have been around for centuries and were the bane of American society in the 1700s. Their popularity may have waned since then, but bedbugs are back with a vengeance, prompting insurance for business interruption, third-party liability claims, and reputation risks as hotels and even retail stores face infestations of the bloodsucking pests. New York has the dubious distinction of being a focal point for bedbug problems, with a recent survey revealing that one of every 15 New Yorkers has dealt with an infestation. Throughout the Big Apple, bedbugs have been found in locations ranging from hotels and theaters to high-end retail stores and the public library. They are becoming a more widespread concern as the number of infestations increases, said Mac D. Nadel, Norwalk, Conn.-based U.S. practice leader for Marsh Inc.'s retail and wholesale food and beverage practice group. The latest reports have put some focus on retailers, which shows it's not only just a hospitality business problem, but a property, real estate and general problem. New York Mayor Michael Bloomberg's administration reportedly fielded 11,000 complaints about the pests in 2009 compared with just 537 in 2004. As a result, $500,000 has been committed to deal with the infestation. However, reports have sprung up in Ohio and Los Angeles as well. Bedbugs-which are not known to spread disease but bite and leave itchy red welts-are more of a nuisance than anything else, but the problem they create is being taken seriously. More importantly, it's no longer just a hospitality industry problem and the battle against bedbugs is expected to continue. You really have to take the blinders off on this issue because they're starting to get into places that are not normally exposed to bedbugs, said Tracy Knippenburg Gillis, New York-based crisis management practice leader for Marsh Risk Consulting. It makes it more important for retailers, hotels and other commercial businesses to have a process in place to mitigate the spread and to prevent further occurrences. Most standard commercial property policies either have specific vermin exclusions for infestation or loss due to insects or have other broad contamination exclusions, insurance brokers and insurers said, adding that the policyholder has to prove actual damage of items that were infested if exclusions aren't present in the policy. David Kroeger, Chicago-based attorney within Jenner & Block L.L.P.'s insurance and reinsurance group, said policyholders should look closely at what the vermin exclusion says and how it categorizes and defines vermin. I wouldn't give up on the property policy immediately, Kroeger said. Vermin exclusions may not focus on bedbugs, but may focus on insects like termites. This is important, Kroeger said, because if a store or hotel is forced to shut down due to bedbug infestation and cannot reopen until after fumigation, business interruption coverage could be triggered. For hotels, loss-of-attraction coverage could be applied for actual losses sustained due to cancellations or the inability to accept bookings for rooms due to murder and suicide, and also may apply to vermin, said Nancy Green, Chicago-based executive vp at Aon Risk Solutions, a division of Aon Corp. She also said that type of coverage is an extension of a typical property policy and can provide some relief, typically up to $1 million or higher, depending on the limits purchased.urn:uuid:27e17e81-9820-4d2e-a815-84983a26df15Vacant Homes Pose Insurance RisksSource: National Association of Insurance Commissioners (NAIC) 10 Aug 2010 As the U.S. housing market struggles to rebound, many homeowners are stuck with hard-to-sell properties longer than expected. Some frustrated home sellers who must relocate fo...Tue, 10 Aug 2010 13:27:29 -0500Source: National Association of Insurance Commissioners (NAIC) 10 Aug 2010 As the U.S. housing market struggles to rebound, many homeowners are stuck with hard-to-sell properties longer than expected. Some frustrated home sellers who must relocate for a new job opportunity, want to downsize or simply want to buy a new place have left homes empty. Vacant or unoccupied homes can leave the homeowner exposed to loss and liability that may not be covered by their insurance, according to the National Association of Insurance Commissioners (NAIC). The Pending Home Sales Index, released yesterday by the National Association of Realtors, dropped 2.6 percent to 75.7 based on contracts signed in June from 77.7 in May, and is 18.6 percent below June 2009 – another sign of the stagnant housing market. “In many cases, people who have been trying to sell their homes for awhile have moved forward with their plans regardless, leaving a vacant home on the market,” said NAIC President and West Virginia Insurance Commissioner Jane L. Cline. “Having an unoccupied home can create several insurance implications that typically are not covered under a standard homeowners policy.” The Added Risks of Vacant Homes Homeowners policies are meant to insure homes that are occupied, so they generally include exclusions for neglect or property abandonment on a home left vacant or unoccupied for a specified number of consecutive days. In insurance terms, a vacant home is one the resident has moved out of and taken his/her belongings with him/her. An unoccupied home is one where the resident is not staying at the home, but the furniture and other belongings remain. Because vacant and unoccupied homes pose a higher risk for damage than occupied homes, insurance companies insure these properties differently and usually at a higher price. These risks include: • Break-ins: When a home has been unoccupied for awhile, it can show signs that nobody is around – unkempt lawn, full mailbox, no lights on – that can tip off burglars to an easy target. • No emergency response: Without anyone home to call 911 or respond to emergencies, a manageable problem – such as a small electrical fire – can turn into a much larger, more costly disaster. • Property liability: There is no one present to prevent others from entering the property or to supervise activity, which could increase the likeliness of an accident on the premises or property damage when the owner is not there. Keeping Vacant Homes Properly Insured The definition of vacancy and unoccupancy can vary from policy to policy. Some insurers may not pay claims if a home is vacant for 60 days or more. Some policies might automatically shift to a different amount of coverage (e.g. liability insurance only) after a specific number of days unoccupied. Many homeowners policies have a “vacancy clause” that can be triggered if the homeowner is gone for an extended period of time. If this happens, the homeowner could violate the terms of their contract and some or all of their coverage may not apply in the event of a loss. Many insurance companies offer an endorsement that will provide coverage for a dwelling that is unoccupied for an extended period of time. Vacancy policies can also be purchased for different term lengths to cover a few months to a year, depending on the need. The cost of vacancy coverage depends on the company and state in which the property is located, but costs usually are higher than a typical homeowners policy due to the overall increase in risk.urn:uuid:4f58143e-f272-40d6-bd02-69e1d795c781Driver Distractions Include Texting, Eating, Grooming and MoreSource: Insurance Information Institute Driver distractions or inattentive driving play a part in one out of every four motor vehicle crashes. That is more than 1.5 million collisions a year and 4,300 crashes daily, according to the National Highway ...Mon, 02 Aug 2010 14:55:13 -0500Source: Insurance Information Institute Driver distractions or inattentive driving play a part in one out of every four motor vehicle crashes. That is more than 1.5 million collisions a year and 4,300 crashes daily, according to the National Highway Traffic Safety Administration. Text messaging, changing radio stations, even turning around to talk to passengers can prove deadly, according to the Insurance Information Institute (I.I.I.). While cellphones and text messaging cause the most accidents, drivers are also distracted by using PDAs, laptops and navigational aids while driving. Other drivers create a potential hazard because they eat, drink, read, write or groom themselves when their full attention should be on the road in front of them. “A car is not your living room, office or kitchen. It is a means of getting from one point to another and must be used judiciously,” said Loretta Worters, vice president with the I.I.I. “People can become so absorbed in their conversations or activities that their ability to concentrate on the crucial act of driving is severely impaired, jeopardizing the safety of vehicle occupants and pedestrians.” In January 2010, the National Safety Council (NSC) released a report estimating that at least 1.6 million crashes (28 percent of all crashes) are caused each year in the U.S. by drivers talking on cellphones (1.4 million crashes) and texting (200,000 crashes). The estimate is based on data of driver cellphone use from the National Highway Traffic Safety Administration and research that quantifies the risks using cellphones and texting while driving. A July 2009 Virginia Tech Transportation Institute study found that texting while driving is far more dangerous than previously estimated. The collision risk became 23 times higher when motorists were texting while driving. On July 21, Kentucky's new ban-on-texting-while-driving law goes into effect making it the 30th state, (including the District of Columbia and Guam), to ban texting while driving. Eleven such laws were enacted in 2010 to help stem the growing problem. The Utah texting while driving law ban, passed in May 2009, is the toughest in the nation. Offenders convicted of causing an accident that injures or kills someone while texting behind the wheel face up to 15 years in prison. The law does not consider a crash caused by a multitasking driver as an accident, but rather as an inherently reckless act, like drunk driving. In addition, as of June 2010 eight states (California, Connecticut, Maryland, New Jersey, New York, Oregon, Utah and Washington State) plus the District of Columbia, ban the use of hand-held cellphones while driving. Employers May Be Held Liable Employers are now concerned that they may be held liable for accidents caused by their employees while driving and conducting work-related conversations on cellphones, according to the I.I.I. Under the doctrine of vicarious responsibility, employers may be held legally accountable for the negligent acts of employees committed in the course of employment. Employers may also be found negligent if they fail to put in place a policy for the safe use of cellphones. “In response, many companies have established cellphone usage policies,” said Worters. “Some allow employees to conduct business over the phone as long as they pull over to the side of the road or into a parking lot. Others have completely banned the use of all wireless devices in the car.”urn:uuid:a4b20792-e7a8-4597-9bf8-0ba144c37a18Survey Reveals the Majority of Apartment Dwellers Are Living without Renters InsuranceSource: Apartment.com   27 Jul 2010 Renters are 50 percent more likely to experience theft than those who own homes, according to the Bureau of Justice Statistics. Despite these risks, most apartment dwellers are still living without renters in...Tue, 27 Jul 2010 16:14:05 -0500Source: Apartment.com   27 Jul 2010 Renters are 50 percent more likely to experience theft than those who own homes, according to the Bureau of Justice Statistics. Despite these risks, most apartment dwellers are still living without renters insurance. According to a recent Apartments.com survey of nearly 1,400 apartment hunters around the country, 67 percent said they do not have renters insurance. The top reason survey respondents gave for not being covered is that they cannot afford it, followed closely by many who claim they did not know this type of insurance existed. Other respondents believe they do not need renters insurance because their possessions are not valuable enough to make the investment worthwhile and nothing bad has ever happened to them. Nearly a quarter of apartment seekers surveyed are under the assumption that renters insurance is too rich for their blood, yet the average premium is under $200 a year, according to the National Association of Insurance Commissioners. The majority of Apartments.com survey respondents who choose to protect themselves with renters insurance said they pay on average $12.50 a month or less and one out of 10 renters said they have had to use their insurance at one time or another. The two most common components of renters insurance include protection against theft and destruction to personal belongings, including televisions and computers, and liability, which defends renters from judgments that go against them in the event that someone is injured on their property. While a large percentage of apartment dwellers are not carrying renters insurance, 33 percent of survey respondents said they are covered and list the most compelling reasons for purchasing renters insurance as protection against: Theft (79%) Fire/Lightning (70.7%) Water Damage (52.3%) Weather (e.g. Hail, Windstorm) (40.5%) Smoke Damage (40.6%)  urn:uuid:50d97d12-8415-4eef-9578-cd958de2257fPresident Signs National Flood Insurance Program Extension to September 30President Signs National Flood Insurance Program Extension to September 30 President Barak Obama today signed an extension to the National Flood Insurance Program, extending the lifeline to owners of properties in flood-prone areas to Sept. 30. The e...Tue, 06 Jul 2010 12:08:24 -0500President Signs National Flood Insurance Program Extension to September 30 President Barak Obama today signed an extension to the National Flood Insurance Program, extending the lifeline to owners of properties in flood-prone areas to Sept. 30. The extension allows people with properties in flood areas and those seeking to close on properties in flood-prone areas to transact sales on those properties. No claims could be filed against NFIP policies and no new NFIP policies could be written since the program’s expiration May 31. The program, which serves about 5.5 million property owners in the U.S., received a retroactive extension, meaning any claims filed after May 31 for flood damage will be honored. During the lapse, some property buyers in flood areas who had locked in interest rates or were taking advantage of federal closing cost rebates found themselves unable to close, meaning they may have lost the locked in interest rate and the rebate opportunity. The lapse, one of several in the last year, came as the hurricane season began in the U.S. That season runs from June 1 to Nov. 30. The insurance industry continues to voice its frustration at short-term extensions and the lapses, saying it creates uncertainty about the program. A bill to extend the program for five years is before Congress, but has not been acted on.urn:uuid:acd70ee6-6fd2-4da5-932a-425a7af0fc50Employment Practices Liability (EPLI)The workplace is changing—and so are the risks. Claims of employment discrimination, sexual harassment and wrongful termination are common, but it can be difficult for small and midsize businesses to find affordable insurance protection. That&r...Wed, 30 Jun 2010 11:00:10 -0500The workplace is changing—and so are the risks. Claims of employment discrimination, sexual harassment and wrongful termination are common, but it can be difficult for small and midsize businesses to find affordable insurance protection. That’s why EMC is expanding the Employment Practices Liability coverage available under our EMC Choice Businessowners program and introducing Employment Practices Liability to commercial general liability and commercial garage liability. This specialty coverage helps eliminate coverage gaps and provides broad Employment Practices Liability protection for Main Street businesses. Our Employment Practices Liability coverage can help your business defend themselves against employment claims that can be expensive and distracting. The coverage is designed for businesses with up to 50 employees; however, a referral option is available for risks with up to 250 employees. Key benefits include: Meaningful coverage that responds to a real exposure. Broad coverage with substantial limits at a fraction of the cost of other Employment Practices Liability products. Under our Portfolio Employment Practices Liability option, there is no separate underwriting process or application required. Optional limits (up to $250,000 under Portfolio Employment Practices Liability and $1,000,000 under Transactional Employment Practices Liability) are available with various deductibles. A third party coverage option is available (for an additional charge) that covers the alleged discrimination or sexual harassment claims brought by (nonemployee) customers, vendors, tenants or clients. Specialized claim services, including experienced Employment Practices Liability law firms to defend employers in the event of a claim. Our Employment Practices Liability coverage available by endorsement to commercial general liability, commercial garage liability and businessowners lines of business is a simple, integrated solution for small and midsize businesses. The coverage is backed by loss prevention service and an experienced group of claim specialists—all very important as Employment Practices Liability cases can be difficult, emotional and timely.urn:uuid:a9df4ea1-0530-4fc6-8138-b04c45376fa3Getting Back To Work Is Good BusinessWhen a school cafeteria worker suffered a fractured hip at work, school administrators were expecting the worst—the loss of a valued employee, ongoing disability payments, the cost of hiring and training a replacement worker, and a potential ch...Mon, 28 Jun 2010 14:35:36 -0500When a school cafeteria worker suffered a fractured hip at work, school administrators were expecting the worst—the loss of a valued employee, ongoing disability payments, the cost of hiring and training a replacement worker, and a potential change in workers’ compensation premiums and experience modification factors. That was not the case, however. Thanks to a well-designed return to work (RTW) program, the employee received the physical therapy and support necessary to return to the cafeteria and, after several transitional work assignments, signed a contract to resume her previous responsibilities for another year. “This is how things should work,” explains EMC Occupational Consultant Kate Benson Larson, who is part of a team of case managers who bring injured or disabled employees safely back to work as soon as they are able. Good For Employers. Good For Employees. A New York State Department of Labor report noted that programs that steer employees back to work may reduce workers’ compensation costs, litigation, wage and worker replacement costs, productivity losses, medical and indemnity costs, and utilization of short- and long-term disability benefits.   According to Larson, the benefits of a RTW program are more than monetary. “Experience indicates that employees participating in the program continue to live a productive lifestyle during their recovery period,” comments Larson. “In addition, an effective RTW program facilitates immediate and informative communication between employee and employer.” Job Descriptions Are The Cornerstone Of RTW Programs The first step in the process of implementing a RTW program is to complete a functional analysis, written description and possible transitional duties for all regular positions. “That was a crucial component of getting the school cafeteria worker back to work,” explains Larson. “We were able to provide valuable job description information to therapists, who adapted their treatment regimen to match the needs of transitional jobs as well as her original responsibilities.” Want To Learn More About RTW Programs? “Having a return to work program is a win-win situation,” concludes Larson. “Employers typically minimize costs while retaining the use of a trained employee. Employees come back to work and avoid lost wages and a long-term absence.” Larson encourages policyholders to review the many online resources at <a href="http://www.emcins.com">www.emcins.com</a> for additional information about the steps in developing, implementing and monitoring a RTW program. Thanks to an effective return to work program, a school cafeteria worker returned to productive work after suffering a hip fracture.urn:uuid:77f5bb23-f031-4de7-aa9a-499cc56781b8BP's Gulf Oil Spill A Game Changer for Offshore Drilling Insurance25 Jun 2010 As a result of BP's rig explosion which caused the worst oil spill in U.S. history, insurance coverage for offshore drilling will be curtailed, forcing companies to self-insure or exit deepwater fields. BP's leak in the Gulf of Mexico is...Fri, 25 Jun 2010 13:04:28 -050025 Jun 2010 As a result of BP's rig explosion which caused the worst oil spill in U.S. history, insurance coverage for offshore drilling will be curtailed, forcing companies to self-insure or exit deepwater fields. BP's leak in the Gulf of Mexico is "a market-changing event," said Dieter Berg, senior executive manager marine at Munich Re, the world’s biggest reinsurer and among those exposed to losses. "Buyers and sellers of coverage will be reevaluating their appetites for offshore energy risk," said Berg in a June 11 e-mail response to questions. Proposals in Congress to raise U.S. liability costs to $10 billion to drill for oil in the Gulf could leave just three companies -- BP, Exxon Mobil Corp. and Royal Dutch Shell Plc -- with the finances to self-insure, energy consultant PFC Energy said June 15 in a memo to clients. Insurance coverage available may decline as much as 30 percent, John Lloyd, chief executive of Lloyd & Partners, said in written testimony to the U.S. Senate on May 11. His company is a unit of Jardine Lloyd Thompson Group Plc, the U.K.’s biggest publicly traded broker. BP was drilling into its Macondo well in the Gulf when the Deepwater Horizon rig exploded April 20, killing 11 people. The well has since spewed tens of millions of gallons of crude into the Gulf, forcing BP to set up a $20 billion fund to compensate victims of the spill. The U.S. appealed yesterday a federal judge’s June 22 order lifting a moratorium on deepwater oil drilling imposed after the spill. Three Times More Insurers are reassessing how much they can afford to underwrite as the incident exposes higher liabilities than previously thought, said Gregory Thomas, head of offshore activities at Assuranceforeningen Skuld, an Oslo-based underwriter for deepwater contractors. Insurers are charging 50 percent more for policies covering oil rigs in deep waters since the BP leak, Moody’s Investors Service said on June 3. R.S. Sharma, chairman of India’s biggest explorer Oil & Natural Gas Corp., said June 9 it would have cost the state-owned company three times as much if it had renewed its offshore policy after the disaster. The BP oil spill will “significantly” push up the price of insurance on offshore drilling, said Lloyd’s of London Chief Executive Officer Richard Ward in an interview with Bloomberg Television on June 22. The BP disaster is likely to be the second-biggest energy insurance loss based on current estimates, said the Insurance Information Institute. The most expensive property loss for energy insurers was a July 1988 explosion aboard the Piper Alpha oil platform in the North Sea, which killed 167 people and cost insurers $3.6 billion in 2009 dollars. Self Insurance Prohibitive premiums and the impracticality of insuring one-time, catastrophic events could mean deepwater operators will need to be self-insured, said James Eck, vice president senior credit officer at Moody’s in New York. “What insurer is going to want to put out $1 billion worth of deepwater insurance and only get paid $5 to $10 million after this? They may as well write a few more hurricane-insurance contracts,” Eck said. BP, Exxon Mobil and Shell, the world’s three largest non- state oil companies, are at least partially self-insured through wholly owned units, according to company filings. BP, which owns Guernsey-based Jupiter Insurance, said in a March regulatory filing that it was more economic for it to bear losses as they arose rather than to buy external policies. Insufficient Capacity More companies may have to cover themselves if the U.S. decides to raise the cap on liability for economic damages from deepwater drilling to $10 billion from $75 million, said Robert Hartwig, president of the Insurance Information Institute, a New York-based trade group. There isn’t enough capacity to provide that level of protection in the global energy insurance market, which currently collects $3 billion in annual premiums, he said. BP, as owner of the underwater lease, has primary liability for damages caused by the pollution and damages by the leak from its Gulf well. Lawsuits are pursuing a broadening circle of contractors that provide equipment and drilling services. “Our biggest fear at the moment is that there will be a change in the contracting dynamic and operators suddenly start to shift pollution and other liabilities over to the contractor,” said Skuld’s Thomas. A contractor like Transocean Ltd., owner of the rig that exploded in the Gulf in April, wouldn’t have entered into an agreement with BP if it expected to be responsible for pollution from the wells, he said. Legal Action Lawsuits filed as of June 16 name Transocean, Cameron International Corp., which supplies blowout-prevention equipment, and drilling services provider Halliburton Energy Services Inc. Anadarko Petroleum Corp. has a 25 percent stake in BP’s Macondo well, while Mitsui Oil & Exploration Co. owns 10 percent. The real impact on energy insurance prices hasn’t emerged yet because this year’s contract terms were set before the BP- leased rig exploded, Hartwig said. If the Atlantic hurricane season, which started on June 1 and is expected to be twice as active as normal, causes more damage, premiums may rise as much as 100 percent by the end of the year, Hartwig said.urn:uuid:5a88657c-f59f-45f6-8633-02f1ea69c1faSurvey Shows Insurance Execs Fear Inflation, Debt, Regulation ImpactSource: Wall Street Journal 04 Jun 2010 Insurance industry executives consider inflation, the sovereign debt crisis and regulation to be the most immediate threats to their business, a survey by an industry think tank published Thursday showed. Ove...Fri, 04 Jun 2010 13:54:21 -0500Source: Wall Street Journal 04 Jun 2010 <p style="padding-bottom: 8px; padding-left: 8px; padding-right: 8px; margin-bottom: 1.5em; background: #fff; letter-spacing: 0px; padding-top: 8px;border: #ddd 1px dashed;" id="ctl00_contentplaceholder1_tdNewsBody" class="textBigger">Insurance industry executives consider inflation, the sovereign debt crisis and regulation to be the most immediate threats to their business, a survey by an industry think tank published Thursday showed. Over the past two years, central banks have pumped massive liquidity into financial markets to help them cope with the fallout from the financial crisis, but now executives are worried this will "inevitably lead to a surge of inflation," according to the survey by the Geneva Association, a think tank that includes around 80 executives from the world's top insurance companies. Some 79% of the executives who participated in the survey listed macroeconomic factors as the biggest threat to insurers. Beyond inflation or deflation, they are also worried about the impact on their business from the European sovereign debt crisis. The executives are also concerned about the implementation of regulatory reforms intended to address systemic risk in the wake of the financial crisis. In particular, they fear that regulators aren't distinguishing enough between banks and insurers when setting up measures to cope with systemic risk, or the risk that the failure of one institution would trigger the collapse of the whole market. Compared with banks, most insurers coped relatively well with the financial crisis. The few companies that suffered big losses, such as American International Group Inc. (AIG) in the U.S. or Swiss Re in Europe, did so through their banking activities, insurance executives who presented the survey said. Any new regulation for systemic risk therefore needs to take into account the sort of activities insurers have that pose such risk, and avoid treating all institutions in the same way, they say. The fact that "regulation is listed as a key threat is a demonstration of how seriously potentially mistaken regulation could affect our industry," said Nikolaus von Bomhard, chairman of the Geneva Association. He is also chief executive officer at Munich Re, the world's largest reinsurance company.urn:uuid:84b8dd92-54fd-42e9-b6fe-6071bfc9c86bGulf Oil Spill Now Nation's WorstSource:  Washing Post As crews pumped mud at a furious rate into the damaged blowout preventer that sits on the uncapped well at the bottom of the Gulf of Mexico, a group of scientists said the amount of oil spewing into the ocean is much great...Thu, 27 May 2010 12:39:03 -0500Source:  Washing Post As crews pumped mud at a furious rate into the damaged blowout preventer that sits on the uncapped well at the bottom of the Gulf of Mexico, a group of scientists said the amount of oil spewing into the ocean is much greater than originally believed. Also Thursday, a U.S. government source said the director of the federal agency charged with overseeing off-shore drilling had left her job in the wake of the April 20 spill, which appears to be the worst in the nation's history -- far bigger than the 11 million gallons that spilled in the Exxon Valdez disaster. Elizabeth Birnbaum resigned "effective immediately" from the U.S. Minerals Management Service, the Interior Department agency that has been faulted for lax oversight in the wake of the mammoth spill, the government source said. It was not immediately known whether Birnbaum, who had been slated to testify on Capitol Hill today, had resigned of her own volition or been forced out. What was clear was that the magnitude of the spill resulting from the explosion of a BP oil rig continues to grow, with potentially disastrous consequences. U.S. Geological Survey Director Dr. Marcia McNutt said at a news conference Thursday that two teams of scientists, using different methods, have preliminarily determined that between 17 and 39 million gallons of oil have gushed into the ocean so far. Desperate to stop the flow, BP engineers on Thursday launched an effort known as "top kill," pumping mud into the damaged blowout preventer in an effort to plug the leak. The hazardous-but-high-reward maneuver comes five weeks into the oil spill crisis amid an intensifying atmosphere of political recrimination that has spread from the Gulf Coast to the White House and Congress. Early bulletins on the maneuver were encouraging. "The top kill procedure is going as planned, and it is moving along as everyone had hoped," Coast Guard Adm. Thad Allen, who has been leading the government's effort to end the leak, told CNN Thursday morning. BP officials said that they hoped to know if the well was dead by Thursday evening, and Coast Guard Rear Admiral Mary Landry, the federal on-scene coordinator, said she was encouraged but reluctant to express optimism "until I know for sure that we've secured the well and the leak has stopped." The billowing plumes of effluent from cracks in the top of the riser pipe no longer look like oil and gas but have a distinctly muddy appearance. "What you've been observing out of the top of that riser is most likely mud. We can't fully confirm that because we can't sample it," BP Chief Operating Officer Doug Suttles said at a news conference Wednesday night. "It is a little like arm wrestling," BP managing director Bob Dudley told ABC's "Good Morning America," adding that the effort could last until Friday morning. "It is quite a titanic struggle of forces, and it's going to go slow." On another front in the battle against the oil spill, the Coast Guard pulled 125 fishing vessels off the water in Breton Sound after fishermen who had been hired by BP to clean up the slick complained of nausea and chest pains, the Associated Press reported. This is the latest in a series of reports in recent weeks of fishermen feeling sick while trying to skim the oil. President Obama, in a news conference Thursday, will outline tougher rules and regulations of the oil drilling industry and suspend exploratory drilling in the Arctic until at least next year, according to an administration official who spoke on condition of anonymity because the announcement had not been made. This will delay a controversial drilling effort by Shell this summer in the seas off northern Alaska. The moves come after a 30-day review of oil drilling that Obama ordered when the crisis began.urn:uuid:e94ea9ee-8d73-4fb0-a825-0d5baa9fd73eThe Hartford Introduces Affordable Professional Liability Protection for Consultants  An unintended benefit of a rocky economy is the opportunity for displaced professionals to create their own consulting firms. But without the safety net of an employer, consultants need to consider what happens if they face a lawsuit related ...Wed, 26 May 2010 15:41:16 -0500  <div style="padding-bottom: 7pt; padding-left: 7pt; padding-right: 7pt; background: white; margin-left: 11.45pt; margin-right: 11.45pt; padding-top: 7pt;border: #dddddd 1pt dashed;"> An unintended benefit of a rocky economy is the opportunity for displaced professionals to create their own consulting firms. But without the safety net of an employer, consultants need to consider what happens if they face a lawsuit related to their advice. To address the needs of this growing segment of self-employed professionals, The Hartford Financial Services Group, Inc. now offers a miscellaneous professional liability policy with premiums beginning at less than $1,000. "In an era of expanding risk for service-providers of all kinds, this affordable professional liability protection addresses an increasingly important need for our customers and their agents and brokers," said Sean Fitzpatrick, senior vice president of The Hartford's Middle Market and Specialty Financial businesses and a former president of the Professional Liability Underwriting Society (PLUS). "As part of our broad array of standard and specialty products for businesses of all sizes, this coverage can enhance the security of consultants and small firms - helping them achieve what's ahead." The Hartford offers miscellaneous professional liability coverage through its Hartford Financial Products (HFP) unit, one of the nation's largest underwriters of professional and management liability insurance. The coverage is available as a stand-alone policy or as part of the company's Private Choice Encore!!(R) Policy. "With the exodus of professionals from the traditional workplace, we expect the business services industry to grow much faster than other sectors," said Stephen Prymas, vice president of financial products underwriting at The Hartford. The miscellaneous professional liability policy is designed for small firms that provide advice or services requiring specialized knowledge. Generally, these firms generate less than $1 million in revenue and have fewer than 10 employees. They represent a range of industries, including marketing or management consultants, executive coaches, career counselors, travel agents and event planners. For example, a management consultant might be hired by a company's president to help the organization with strategic planning and lowering its cost structure. The consultant may provide advice on a strategy that redefines management roles and delegation, initiates spending controls, and uses a new staffing model to address the organization's needs. If the client experiences a negative impact to its bottom line after implementing the consultant's advice, the client may sue the consultant for negligence in rendering advice. Similar cases have resulted in more than $200,000 in settlement and defense costs. Or, a self-employed market researcher might provide advice to a client on whether to establish a new product line. If the new line is introduced - and fails - the client might sue the market researcher, claiming the failure was a result of faulty research. "Even if the lawsuit is not successful, the consultant can incur some hefty defense costs in fighting the suit," said Prymas. "For many small firms, that could mean the end of their business." Prymas pointed out that a general liability or personal umbrella policy typically does not cover liability exposures related to business services. Sometimes, a professional services contract will require a consultant to carry professional liability coverage, but too often this protection slips through the cracks. "It's a gap that both agents and policyholders need to be aware of," Prymas said. "With this policy, we've made it easy and affordable for consultants and advisors to obtain this needed protection." Key features of The Hartford's miscellaneous professional liability policy include: * A tailored definition of professional services to meet the needs of a broad range of companies; * Coverage for personal injury, such as libel and slander, arising from the professional services; * Coverage for punitive damages, where allowed by law; * Liability coverage for erroneous work performed by a subcontractor; * Coverage extension for expenses related to disciplinary proceedings in which a professional is brought before a regulatory body or association. </div>