Archive for February, 2010

SEC focuses on disclosing climate change related issues

February 23, 2010 Leave a comment

Lawyers are reporting that the Securities and Exchange Commission (SEC) is increasing the expectations that publicly-traded companies should outline climate change related issues. As a sample description of this trend, see this Advisory to from Sullivan and Worcester.

Failure to notify shareholders of the impact of operations on climate change may leave management exposed to extensive securities litigation with little ability to offer a strong defense. Directors & Officers ( D & O) Liability Insurers are still studying these SEC developments but it would not be surprising to see more emphasis on these issues at upcoming renewals.

Texas plane crash: an act of domestic terrorism and would it be covered?

February 19, 2010 Leave a comment

Austin, Texas, Police Chief Art Acevedo stopped short of calling the crashing of a small plane into a commercial office building in northwest Austin on Feb. 18 a terrorist act, but U.S. Representative Mike McCaul said he wasn’t so sure it couldn’t be considered one.

The Piper Cherokee PA-28 piloted by Joseph Andrew Stack, 53, crashed into a multi-story office building that housed a U.S. Internal Revenue Services office with 190 employees shortly before 10 a.m. on Feb. 18.

While this may just seem a matter of semantics for journalists, but this is a critical question in insurance.

Read more…

Alarming findings on the cost of healthcare in Massachusetts

Hospital charges in Massachusetts are out of control. I have long argued that the health care reform debate should have been about actual cost of care and not a broad indictment on the insurance industry. Close to 90% of every dollar of medical premiums paid in Massachusetts go towards paying hospitals and doctors and, until now, little attention has been given to how those rates are established. A recently released report by the Massachusetts Attorney Generals office should be raising the ire of every company who purchases health insurance for their employees in Massachusetts. The findings are troubling. And the report is a must read for every employer who purchases healthcare for their employees. Read more…

IPOs are back

February 4, 2010 Leave a comment

WGA client, Ironwood Pharmaceuticals, completed their initial public offering of stock earlier this week.  Ironwood sold 16.7 million shares at $11.25 per share.  They ended up their first day of trading up by more than 3%.  The gross proceeds of over $187 MM were the most raised by a biotechnology R & D company since 2002.  Their post-IPO market capitalization is over $1B.

One significant new expense for a company going public is the greatly heightened cost of Directors & Officers Liability Insurance. This is due to the increase in risk exposures arising out of a plethora of new shareholders.  Securities litigation, in particular, becomes much more likely for publicly-traded companies.  Read more…

Costs are up for lost records

February 2, 2010 Leave a comment

The Ponemon Institute recently released its 2009 data breach figures. The average cost per customer record lost is up to $204, $2 higher than 2008, and the average total cost per company is now $6.75 million.  The sample size is relatively small – 45 companies.

It should be noted that many costs associated with a breach (i.e. notification costs, credit monitoring, investigative costs, etc.) are subject to sublimits under most, if not all, Privacy Liability policies.  The sublimit is typically equal to 10% to 20% of the limit of liability ($100,000 on a $1MM policy).  This is not much Read more…