Archive for January, 2013

When it comes to Professional Services Liability – the devil is in the details

When purchasing insurance for exposure to professional liability, the expectation of the buyer is that risk will be transferred from the firm to the insurer in exchange for the premium paid. However, insurers do not necessarily accept all risks, so it’s important to read the policy closely to be sure you understand the nuances of cover and are aware of any exclusions. One of the first places to look for exception to coverage is within the exclusion section. Exclusions are a common place for insurance companies to carve out coverage for very specific uninsurable losses.

Be aware of the exclusions listed in professional liability policies, as they are often the reason that a claim is denied. The following are a few examples of common Read more…

Chilly weather warning: watch out for ice dams

ice_damWinter 2013 has officially arrived with this latest cold snap, and when the temperature drops, weather-related problems can be on the rise. This is especially true for homeowners, who may experience electrical and insulation problems as a result of heavy snow and ice. Among the greatest risks to homeowners during winter is ice dams. These thick ridges of solid ice build up along the eaves of roofs and tear off gutters and shingles, trapping water that can cause serious damage for homeowners. The dams cause water to back up and pour into the house, frequently causing ceilings to collapse, paint to peel and flooding. This often leads lead to mold and mildew.

Ice dams first form when heat from the attic warms the roof’s surface, except at the eaves. Snow then begins to melt along the warmer areas of the roof before freezing again on the cold eaves. Read more…

Dodd-Frank Act rolls out new energy compliance standards

January 22, 2013 Leave a comment

US-GreatSealThe Dodd-Frank Act will bring greater and more stringent regulation to the energy industry through tighter requirements for swaps and physical options in the energy trading markets. Until recently, energy market participants could trade over-the-counter market swaps without strict oversight from the Commodity Futures Trading Commission (CFTC). Dodd-Frank intends to reduce systemic risk, add transparency to the swaps industry and prevent the abuse of smaller market participants by large trading firms.

With the enactment of the Dodd-Frank Act, the energy trading world will be split into Swap Dealers and End Users. Swap Dealers enter into bilateral swaps for purposes other than hedging. End Users use swaps to hedge their portfolios. Both Swap Dealers and End Users will now have to register with the National Futures Association (NFA), which will act as Read more…

Stricter standards for India’s clinical drug trials

January 16, 2013 1 comment

supreme court of india_5Following allegations against pharmaceutical multinational companies (MNC’s) for using humans as guinea pigs to conduct illegal clinical trials, India’s Supreme Court has ordered that all clinical drug trials be performed under the Centre Health Secretary. Earlier this month, the apex court accused the Health Ministry of ignoring the issue and failing to put proper mechanisms in place to control illegal trials that have caused the deaths of more than 2,242 deaths in the last five years. The court slammed the government’s past attempts to crack down on the various pharmaceutical companies, saying little had been done to remedy the problem, and gave the Ministry four weeks to address to the matter. The bench did, however, refrained from passing any blanket ban on the trials and, instead, sought a comprehensive reply from the Centre on various issues.

In response, the government said it plans to regulate the $500 million sector by amending drug laws to include stricter guidelines for pharma MNC’s and increasing compensation payments Read more…

Indemnification – be careful what you sign for

January 14, 2013 1 comment

Man's Hands Signing DocumentThese days, legal waivers and release forms are a part of modern (and for some of us, daily) life. Whether renting a car, using a credit card or accessing information from the Web, there’s a good chance you’ll be asked to sign some sort of agreement. Many of us barely read most of it. While they may seem long and tedious, the reality is that indemnities transfer significant risk to consumers and in many cases end up costing money. While your homeowner’s policy and umbrella liability will cover direct costs for legal fees and judgment, these policies will not pay to defend a Hertz or Amazon because you signed their agreement.

If you will permit an editorial note – these one-sided indemnities are, while not illegal, push the outer limits of commercial balance and fairness. Furthermore, without realizing it, signing these forms Read more…

Aiding and abetting – implications for directors and officers

January 7, 2013 1 comment

mousetrapDiscussion surrounding Scheme Liability, or “aiding and abetting,” continues to filter throughout the Directors’ and Officers’ Liability (D&O) world, particularly among publicly traded companies and those considering public offerings. The issue has caused debate for decades, but recent challenges to current securities law, from proposed amendments to shareholders class action suits, indicate an increased awareness about the risks of fiduciary, aiding and abetting claims throughout the D&O insurance community.

In 1994, the U.S. Supreme Court ‘s landmark opinion, Central Bank of Denver vs. First Interstate Bank, abolished secondary actor liability in civil litigation brought under Rule 10b-5(b), meaning private litigants may not bring aiding and abetting claims under the federal securities laws. The Court declared that only primary violators — those who actually Read more…

Flood insurance and understanding your risk

January 2, 2013 Leave a comment

NFIPFollowing the widespread flood damage left behind after Hurricane Sandy, more businesses are looking to purchase government flood insurance through the National Flood Insurance Program. According to industry experts, many companies rely solely on the commercial market to buy insurance and don’t realize the benefits of participating in the program. Those who do purchase additional NFIP coverage, however, can use it to help reduce large deductibles associated with commercial flood policies.

NFIP Protection
The NFIP allows non-residential businesses to purchase up to $500,000 in building and $500,000 in contents coverage, while residential businesses can purchase up to $250,000 in building and $100,000 in contents coverage. According to the agency, the average commercial flood claim over the past 5 years has been close to $75,000. Out of the 5.5 million policies Read more…