COMP COSTS CLIMB HIGHER - SPECIAL REPORT CLAIMS MANAGEMENT - Business Insurance
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CYBER DISCLOSURES: Proposed SEC rules raise concerns - PAGE 4
MAY 2022
SPECIAL
REPORT
CLAIMS
MANAGEMENT
PAGE 22
COMP COSTS
CLIMB HIGHER
Aging workforce,
medical inflation, rising wages
drive up claims severity
PAGE 18
With an experienced global claims team and a large, stable balance sheet,
BHSI has the ways and the means to help customers successfully navigate
even the most complex claims. We also have a commitment to claims
excellence, and to doing the very best for each customer – so they can
face down the worst days with confidence and peace of mind.
Claim on.
www.bhspecialty.com
The information contained herein is for general informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any product or service.
Any description set forth herein does not include all policy terms, conditions and exclusions. Please refer to the actual policy for complete details of coverage and exclusions.
PRESIDENT
Steve Acunto
(Greenwich)
sa@businessinsurance.com
CHIEF OPERATING OFFICER
Stephen Acunto
(Princeton)
COVER STORY
stephen@businessinsurance.com The aging workforce, medical
PUBLISHER inflation and rising wages
Keith Kenner that boost indemnity costs
(Chicago)
are driving up workers
kkenner@businessinsurance.com
compensation claims severity.
EDITOR
Helping to offset these
Gavin Souter
(Chicago) trends is a decline in claims
gsouter@businessinsurance.com frequency due to the enhanced
DEPUTY EDITOR
focus on workplace safety
Claire Wilkinson in recent years. PAGE 18
(New York)
cwilkinson@businessinsurance.com
ASSISTANT EDITOR
Louise Esola
(New Orleans)
lesola@businessinsurance.com
NEWS EDITOR
INSIDE
John Obrecht
(Chicago)
jobrecht@businessinsurance.com
SENIOR REPORTER
SPECIAL REPORT: CLAIMS MANAGEMENT
Judy Greenwald Handling cyber claims demands an immediate, coordinated response by the
(San Jose)
policyholder, insurer and broker. In another commercial line, the workers compensation
jgreenwald@businessinsurance.com
sector is using predictive analytics to improve claims management. PAGE 22
REPORTER
Matthew Lerner
(New York)
mlerner@businessinsurance.com
NEWS ANALYSIS CYBER DISCLOSURE
It’s unclear what impact proposed SEC cybersecurity
REPORTER disclosure rules would have on D&O rates. PAGE 4
FOR BREAKING NEWS
Danielle Ling
(New York) COVERAGE, VISIT
dling@businessinsurance.com businessinsurance.com INTEREST RATE HIKES
COPY EDITOR
Rising interest rates could bring higher investment
Brian Gaynor income and changes in exposures. PAGE 6
(Portland)
bgaynor@businessinsurance.com
INTERNATIONAL
ART DIRECTOR The Barbados nonlife insurance market has proved
Jeremy Werling
resilient in terms of profitability. PAGE 14
(Cincinnati)
jwerling@businessinsurance.com
DIRECTOR OF RESEARCH,
PLANNING AND INSIGHTS
PERSPECTIVES
Andy Toh
(Chicago)
Applying an “all sums” allocation methodology
VIEW FROM
atoh@businessinsurance.com
MAJOR ACCOUNTS DIRECTOR -
to insolvent insurers can have unintended side THE TOP
effects, writes Andrew Costigan of Freeborn &
NORTHEASTERN U.S. & INTERNATIONAL
Ron Kolgraf Peters LLP. PAGE 31
(Boston)
rkolgraf@businessinsurance.com LISA DAVIS
HEAD OF SALES, EVENTS OFF BEAT Lisa Davis joined
Colorado knocks out Canopius USA, a unit
& REPRINT SALES MANAGER
Susan Stilwill
LEGAL BRIEFS of Lloyd’s insurer
Mike Tyson’s plan
(Nashville) Recent court opinions PAGE 15
to sell ear-shaped Canopius Group Ltd.,
sstilwill@businessinsurance.com
cannabis gummies. as president and chief
VICE PRESIDENT OF MARKETING OPINIONS
PAGE 34 underwriting officer
Brian McGann The cyber liability market has evolved
in September 2020.
(Buffalo) amid the surge in losses. PAGE 30
bmcgann@businessinsurance.com Ms. Davis became
CEO, U.S. & Bermuda,
DIGITAL AD OPERATIONS MANAGER MARKET PULSE
Jordan Kilty in February and is based in Charlotte, North Carolina.
Products, deals and more PAGE 32
(Raleigh) She discusses the specialty insurer’s growth plans, its
jkilty@businessinsurance.com strategy to create a strong, multiplatform approach to
PEOPLE
DIGITAL MARKETING MANAGER serving the U.S. market, and its management of its cyber
Insurance industry moves PAGE 33
Jen Jonasson exposure. PAGE 16
(Chicago)
jjonasson@businessinsurance.com
BUSINESS INSURANCE (ISSN 0007-6864) Vol. 56, No. 6, Copyright © 2022 by Business Insurance Holdings, Inc. is published monthly by Business Insurance Holdings, Inc., 1030 Lake Avenue,
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BUSINESS INSURANCE MAY 2022 3
NEWS ANALYSIS AMBIGUITY
IN PROPOSED
RULES RAISES
Feds outline broad cyber disclosures
CONCERNS
BY JUDY GREENWALD
jgreenwald@businessinsurance.com
A lthough the final wording
of the U.S. Securities and
Exchange Commission’s
proposed cybersecurity rules
has not been determined, a
provision that would require
P
roposed U.S. Securities and Exchange publicly traded companies to
Commission cybersecurity rules would disclose information about
provide some much-needed standard- “material” cybersecurity
ization for companies seeking to determine incidents within four business
how much and when to reveal cyber-related days has some experts worried.
intrusions to their investors, experts say. For starters, the term “mate-
It is unclear what impact the rules would rial” is ambiguous, they say.
have on cyber or directors and officers lia- “It’s not really clear what
bility rates. is definitively material versus
Also, some contend that a provision in the what is not,” aside from situ-
proposed rules that states companies must ations such as when ransom-
reveal cyber events within four business days ware shuts a company down
of learning of a “material” incident is unduly and its data is exfiltrated, said
vague and as it stands would be difficult to Tara Bodden, general counsel
comply with (see related story). and head of claims at insurtech
In addition to reporting incidents, the pro- At-Bay Inc. in San Francisco.
posal would require publicly held companies “There’s not a lot of runway
to disclose their cybersecurity policies and “investing in cyber security for a long time,”
report on their board’s cybersecurity exper- “It puts this issue, certainly, closer and large financial institutions are likely to
when you demand an organiza-
tion tell you whether or not an
tise, among other provisions.
In issuing the proposal, SEC Chair Gary
to the top of the risk issues for all be ready as well as other large, publicly held
companies, said Joshua Gold, a shareholder
incident was material,” which
can take several weeks or even
Gensler said in a statement that companies
and investors would benefit if cybersecurity
public companies, not just technology with Anderson Kill P.C. in New York.
But other companies might not “fully
months to determine, said
John Farley, New York-based
information “were required in a consistent, companies or financial institutions, which appreciate how bad the risk environment is managing director of Arthur J.
comparable, and decision-useful manner.” right now” and have not made it a top pri- Gallagher & Co.’s cyber liability
The proposed cybersecurity rules join other probably have the most exposures.” ority, he said. practice. “This is a really tough
recent SEC proposals focusing on special Andrew Doherty,
Observers say the regulation could have mandate to meet,” he said.
purpose acquisition companies and disclo- USI Insurance Services LLC
implications for both cyber and D&O poli-
sure of climate-related risks, among others. cies, although these are difficult to determine
“There was a certain air of inevitability” at this point.
to the cyber proposal, said Kevin LaCroix, “Cyber insurance in particular is in a con-
executive vice president in Beachwood, Ohio, prescriptive guidance” as to what companies stant state of evolution, so it’ll be interesting
for RT ProExec, a division of R-T Specialty should be disclosing. to see how insurers adjust their language” in
LLC. It had been more than 10 years since Compliance with the proposal would be response to the proposed rules, said policy-
the agency first addressed the issue, he said. somewhat onerous, however, said Andrew holder attorney James S. Carter, a partner
The SEC’s Division of Corporation Doherty, New York-based national executive with BlankRome LLP in Washington. Robert Rosenzweig, New
Finance issued interpretive guidance con- and professional risk solutions practice Its effect on the cyber market remains to be York-based national cyber risk
cerning cybersecurity obligations in 2011, leader for USI Insurance Services LLC. seen, as the proposal adds more complexity practice leader and commercial
then issued additional guidance to reinforce “Companies will have to revisit their rules to information sharing, Ms. Groeber said. New York metro regional leader
and expand upon it in 2018. and governance structure” and look at their “If we discover large numbers of companies at Risk Strategies Co., said,
Shannon Groeber, New York-based exec- board’s cybersecurity experience, he said. “It are not complying, it puts them at risk of “Beyond the ability to respond
utive vice president of CFC Underwriting puts this issue, certainly, closer to the top being subject to further restrictions of capac- in that timely a fashion, there
Ltd., said, “We like to see a step toward more of the risk issues for all public companies, ity or coverage terms, but it also provides a certainly is an argument for
not just technology companies or financial baseline measure to make sure they’re being many reasons as to why going
PROPOSED SEC institutions, which probably have the most protected,” she said. public with something that
CYBERSECURITY RULES exposures.” Ms. Groeber added that “there could be a quickly could have ramifica-
Ms. Groeber described the proposed very short knee-jerk reaction” in the market tions” on the business and the
The proposed U.S. Securities and requirement to report the board’s cyberse- while the proposed controls are implemented. investigation, particularly if the
Exchange Commission cybersecurity
rules would require companies to report
curity expertise as positive. It elevates recog- D&O insurers have concerns about cover- attack is still ongoing.
material incidents on a Form 8-K and provide nition of the issue to the board level, a direc- ing cyber claims, particularly regarding their Mr. Farley said the proposal
periodic disclosure on issues including: tion in which some companies have already obligation to provide coverage for investiga- would also require reporting
moved, she said. tory and regulatory expenses, Mr. Gold said. if there were a series of
olicies and procedures to identify
P Experts say publicly held companies’ read- “I think we’ll see more fights, and probably undisclosed incidents that
and manage cybersecurity risks. iness for the proposal varies. tougher fights,” on this issue. were not necessarily material
anagement’s role in implementing
M Some companies are probably making Meanwhile, there is a fear that the pro- individually but become so in
cybersecurity policies and procedures. these disclosures already, even if they are posed rules would “create sort of a roadmap” the aggregate. How does a
he board of directors’ cybersecurity
T
not necessarily doing so in their SEC for plaintiffs attorneys, who will look at what company determine when that
expertise and oversight. filings or in the exact form the agency may companies have said about board oversight, is the case? he asked.
ultimately require, said Matthew McLellan, seize on subsequent incidents and charge “There will be those gray
pdates on previously reported
U Washington-based managing director and that the board either made misrepresenta- areas that need to be sorted
material cybersecurity incidents.
D&O product leader for Marsh LLC. tions or was not fulfilling its oversight obli- out,” he said.
Source: U.S. Securities and Exchange Commission There are companies that have been gations, Mr. LaCroix said. Judy Greenwald
4 MAY 2022 BUSINESS INSURANCE
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NEWS ANALYSIS
Rising interest rates could boost insurers
MATTHEW LERNER banks raising interest rates faster and
federalreserve.gov
mlerner@businessinsurance.com more forcefully,” the reinsurer said in
revising its forecast.
C
ommercial insurers could see higher Michel Léonard, chief economist for the
investment income and changes in Insurance Information Institute in New
exposures because of recent and pro- York, said the Fed is looking to end the
jected U.S. interest rate hikes aimed at year at about 4.3% inflation, down from
curbing inflation. current levels nearer to 8%. “We have a
Whether the monetary policies have very clear direction. We know inflation will
the desired effect on the economy also come down and growth will come down.
remains to be seen as policymakers move That’s very clear and useful,” he said.
forward with plans that appear direction- Indicators such as the futures markets for
ally in sync but indicate some differences. shipping containers show slowing demand,
The U.S Federal Reserve Bank’s Federal Mr. Léonard said. Trading in these futures
Open Market Committee on March 16 markets “gives us a sense of where it’s
increased the target range for the federal going to be and there is light at the end of
funds rate by a quarter percentage point the tunnel when looking at futures for con-
Federal Reserve Chairman Jerome Powell spoke in March after the conclusion of a
to 0.25% to 0.5% and said it “anticipates tainer rates, and the worst is behind us.”
two-day meeting of the policy-setting Federal Open Market Committee in Washington.
that ongoing increases in the target range Although the III sees the U.S inflation
The Fed is expected to increase interest rates multiple times this year.
will be appropriate,” with one committee rate reaching Fed targets, Mr. Léonard
member dissenting and supporting a half- Allianz SE in Munich, sees potential inflation, he said. said it may take into the first or second
point rise. opportunity for insurers in the interest The Allianz “base scenario” includes quarter of next year rather than by year’s
rate hikes. six rate hikes this year, the first of which end. “Our view is Fed numbers are feasi-
“Rate hikes mean profitability will The rising rates might present “good
opportunity to reinvest portions of port-
has taken place, and three next year, Mr.
Subran said.
ble, but quite fast and steep. The question
is how fast this happens.”
increase on the asset side because folios” at higher yields, he said. Swiss Reinsurance Co. Ltd. in April Federal Reserve Bank of New York
“This is quite positive, as rate hikes raised its Fed Funds forecast to six rate President John C. Williams, who also
we are mostly invested in bonds.” mean profitability will increase on the hikes this year from four, for a total of 200 serves as the vice chairman and a per-
asset side because we are mostly invested basis points, implying potential 50 basis- manent member of the Federal Open
Ludovic Subran, Allianz SE
in bonds,” Mr. Subran said of commercial point hikes at some of the Fed’s meetings. Market Committee, said in recent public
insurers. In addition, Swiss Re expects the Bank comments that faced with rising inflation
Raising interest rates to curb infla- of England to hike rates five times rather but otherwise strong economies, the Fed
Roland Eisenhuth, economist and assis- tion also benefits insurers chafing under than four and for the European Central and other central banks have been moving
tant vice president of policy, research and claims inflation, driven by elements such Bank “to likely exit from negative interest away from the “extraordinarily accommo-
international in Chicago for the American as higher building material costs, he said. rates by the year end.” dative” stances they took in early 2020.
Property Casualty Insurance Association, The property/casualty industry will “wel- “Inflation rising further from already The Bank of England began raising rates
said higher interest rates will have a pro- come” the rate hikes to help curb claims high levels will likely see major central in December, followed by the Bank of
found impact on the overall economy, “and Canada in March.
this action could also impact the property/ INFLATION EXPECTATIONS Median one-year-ahead expected inflation rate Other Federal Reserve officials have
Median three-year-ahead expected inflation rate
casualty insurance industry wherever it is advocated a range of policy alternatives
10%
linked to the broader economy.” differing slightly along the way. On
Potential increases in investment yields 8% March 18, two days after the Fed’s initial
from higher interest rates could help off- quarter-point hike, Federal Reserve Bank
set any downward pressure on stock valu- 6% of St. Louis President Jim Bullard issued
ations, Mr. Eisenhuth said. a statement explaining his dissenting vote
Higher interest rates, however, could 4% in which he called for a half-point hike.
also reduce demand, leading people to “In my view, raising the target range to
2%
buy fewer cars or homes, which could 0.5% to 0.75% and implementing a plan
slow the growth of exposures for proper- 0% for reducing the size of the Fed’s balance
ty/casualty insurers. 2014 2015 2016 2017 2018 2019 2020 2021 2022 sheet would have been more appropriate
Ludovic Subran, chief economist for Source: Federal Reserve Bank of New York Survey of Consumer Expectations actions,” the statement said.
SUPPLY CHAIN SHORTAGES, STRONG DEMAND DRIVE CURRENT INFLATION
W hile raising interest rates has long
been used as the remedy for rising
inflation, some experts warn that
policymakers must tread carefully.
The causes of today’s inflation are not
Information Institute in New York.
Today, U.S. inflation is driven by
supply chain shortages and very strong
demand in some sectors, such as pre-
owned autos. “It’s an inflation driven
rates going to do to supply chain delays?
Not much,” he said.
“If we believe that tightening monetary
policy could solve the supply chain crisis
in China, this is, of course, wrong,” said
The Federal Reserve’s desire to “come
out big” and control the political narrative
of the situation, must also be carefully
managed, Mr. Subran said. Taking too heavy
a hand could risk recessionary conditions.
the same as those from the past, they say. by an economy that’s recovering and Ludovic Subran, chief economist for “The Fed as the lender of last resort for
“The inflation we have now is different. that’s doing well,” Mr. Léonard said. Allianz SE in Munich. He also sees some the U.S. and the world” has increased its
It’s not driven by the same drivers,” “Will increasing intertest rates have the strength in the U.S economy, partially prominence and makes crafting monetary
like oil prices in the 1970s, said Michel desired impact on the scale desired?” because of the stimulus payments policy more complicated, he said.
Léonard, chief economist for the Insurance For instance, “what’s raising interest during the COVID-19 pandemic. Matthew Lerner
6 MAY 2022 BUSINESS INSURANCE
NEWS ANALYSIS INSURERS
LIMITING
EXPOSURES
War in Ukraine prompts exclusions E xclusions added to
representations and
warranties insurance
policies will limit insurers’
in European M&A insurance market
exposure to the Russia-
Ukraine conflict, experts say.
If a target being acquired
has exposure to the conflict
— a known political exposure
— transactional risk insurers
BY CLAIRE WILKINSON will exclude it, said Larry
cwilkinson@businessinsurance.com Shapiro, San Francisco-
based managing director and
M
ergers and acquisitions insurance buyers representations and warranties
have seen exclusions added on policies insurance team leader at
since the invasion of Ukraine and the Alliant Insurance Services Inc.
imposition of international sanctions on Insurers have responded
Russia and Belarus, but whether the conflict with either a broad exclusion
will affect insurance prices remains unclear. of any exposure related to
Pricing, which jumped due to a surge of Russia, Ukraine or Belarus,
M&A deals in the fourth quarter of 2021, or with a more tailored
was up in the first quarter of this year from response in which they
the year-earlier period but down from the would still expect to exclude
fourth-quarter high, experts said. a related exposure but only
Issues like the war tend to affect coverage if it’s applicable, he said.
rather than price, said Emily Maier, partner William Monat, Chicago-
and senior vice president, national group lead- based global head of
er of M&A insurance, at Woodruff Sawyer & transactional liability
Co., who is based in Austin, Texas. at Mosaic Insurance
“The issue is always the precise nature Holdings Ltd., said insurers
of coverage that is or isn’t provided” under are concerned about
representations and warranties policies, Ms. insurer Liberty Mutual Insurance Co. to be strong, experts said. underwriting to the exposure
Maier said. “We’ve seen some capital constraints caused William Monat, Chicago-based global head and underwriting to make
In the fourth quarter of last year, insurers by the rapid growth last year of the class. of transactional liability at Mosaic Insurance sure they are not covering
didn’t have the resources to deal with the Certain reinsurers got concerned about over- Holdings Ltd., said U.S. deals are still moving any known exposure.
increased demand for coverage, said Craig aggregation and told insurers and MGAs to forward and getting done. Jay Rittberg, managing
Schioppo, Melville, New York-based global control their line usage better and write less “There is more impact on the international principal at Euclid
head of transactional risk at Marsh Specialty. business,” he said. cross-border deals. When you look at U.S. Transactional LLC in New
“Since then, prices have peeled back a domestic deals it depends on whether that York, said if there is any
bit, by 10% or 20% since December,” Mr.
Schioppo said.
“Sometimes there are indirect impacts business has international touch points, such
as on the supply chain, operations, counterpar-
Russia-Ukraine exposure
at the submissions stage
If there’s tangential exposure on a deal that
makes the risk of loss higher, it may affect
of war that might increase the loss profile ty credit risk,” Mr. Monat said.
There is no material effect on U.S. deals with
the insurer would “broadly
exclude operations, sales or
pricing or terms, said Jay Rittberg, manag- of a business, and we might use terms, a fully domestic supply chain, operations and dealings with counterparties
ing principal at Euclid Transactional LLC sales, he said. in those countries.”
in New York. conditions, retentions and other things.” Euclid is seeing “minimal impact” so far If there is no connection at
“Sometimes there are indirect impacts of Jay Rittberg,
on how much business it is signing up, Mr. the submissions stage, it will
war that might increase the loss profile of a Euclid Transactional LLC
Rittberg said. continue to evaluate the deal
business, and we might use terms, conditions, “There’s more of an impact on deal closings, during the diligence process
retentions and other things,” Mr. Rittberg said. but people are still agreeing to buy and sell and may exclude then if it
The conflict has probably added an ele- companies,” he said. sees something, he said.
ment of caution to the market, said Rowan A heightened level of claims activity in the Larry Shapiro, San Francisco-based manag- “We don’t have a blanket
Bamford, London-based president of Liberty last couple of years also lent support to last ing director and representations and warran- exclusion currently because if
Global Transaction Solutions, a unit of U.S. year’s pricing levels. “Carriers are making ties insurance team leader at Alliant Insurance you’re looking at a company
sure they’ve got rate adequacy on their book,” Services Inc., said deals involving targets with that grows grapes in the
he said. operations in the region or a connection to the Midwest, you probably don’t
On a global basis, marketwide pricing was conflict may be on hold. need an exclusion like
up 10% in the first quarter versus the first “We had one buyer that had operations and this,” Mr. Rittberg said.
quarter of 2021, Mr. Bamford said. employees in the region and they slowed the The situation is evolving
In the U.S. market, so far there doesn’t deal down just to evacuate their personnel. But and it’s important for buyers
appear to have been much of a pricing impact other than that, I haven’t seen a direct impact to do their diligence and
from the Russia-Ukraine conflict, said Scott on deal flow,” he said. understand what operations,
Pegram, head of Americas at Liberty Global It’s too early to tell whether there will be a sales, suppliers and other
Transaction Solutions in New York. significant effect on deal volume, said Randi relationships may exist
“Any changes that we have seen, it would be Mason, co-head of the corporate practice at in Russia, Ukraine and
hard for us as a market to understand if that is law firm Morrison Cohen LLP in New York. Belarus, said Randi Mason,
related to or impacted by the conflict,” he said. “Deal volume is still quite high. It’s not at co-head of the corporate
Meanwhile, deal volume has declined in the same pace that it was in the last quarter of practice at law firm Morrison
Europe in the wake of the conflict, but deal 2021, but the first quarter is never as busy as Cohen LLP in New York.
and submission flow in the U.S. still appears the fourth quarter,” Ms. Mason said. Claire Wilkinson
8 MAY 2022 BUSINESS INSURANCE
2022-2023
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sstilwill@businessinsurance.comNEWS ANALYSIS
Positive drug tests increase for drivers
BY DANIELLE LING impression that they are cleared to use it
dling@businessinsurance.com with a medical card, experts say.
“We are seeing the trend of some employ-
R
ising drug positivity rates among ers choosing to either take marijuana out of
truck drivers and other transportation their drug testing panel or not disqualifying
workers are raising safety concerns. individuals from having a positive marijua-
And while some other employers are na result from employment,” she said.
relaxing drug policies in response to the These practices outside of the safety-
shifting social and legal landscape on can- sensitive workforce could have implica-
nabis and a nationwide labor shortage, tions for federally mandated employers
the transportation industry can’t do that, in screening potential employees, Ms.
because the U.S. Department of Trans- Mueller said.
portation requires companies to test those “We definitely want to understand the
who drive for a living. risks that can be caused by not knowing
For those working in the transportation the background of an individual you may
industry, the 2021 drug positivity rate be putting into a safety-sensitive posi-
was 2.2%, higher than in 2017, and in tion,” she said.
line with an overall rise in positive drug Brian Hammer, Durant, Iowa-based
tests for all workers, according to data safety advisor to the American Society of
released in March by Quest Diagnostics DRUG VIOLATIONS REPORTED positive drug tests. Its monthly Drug and Safety Professionals and fleet consultant
Inc., which provides drug screening for TO CLEARINGHOUSE Alcohol Clearinghouse report from Febru- at N at io n wid e M ut ual I n s uran c e
employers nationwide. Actual knowledge of a drug violation ary documented a rise in truck driver vio- Company, said the FMCSA Drug and
For those in safety sensitive positions, Drug test refusal lations with CBD, marijuana and cocaine. Alcohol Clearinghouse rules that took
pre-employment positivity increased Positive drug test Since the Clearinghouse took effect in effect two years ago documenting positive
9.5% from 2017 to 2021, while post- 5,324 Jan. 2020, marijuana was increasingly the drug tests have contributed to hiring
4,861
accident positivity increased 41.9%. In 696 most prominently used substance, with challenges amid a major labor shortage in
2021,post-accident positivity was higher 693 3,896 58,904 positive results, FMCSA reported. the trucking industry.
when compared with pre-employment 628 The surprise second — increasing in Acceptance of marijuana use among
positivity, according to Barry Sample, 4,542 positivity in 2021 after five years of steady the general population makes it harder to
4,017
Seneca, South Carolina-based senior 3,184 declines — was cocaine, with 16,218 attract and retain workers in safety-sensi-
science consultant for Quest Diagnostics. positives. Meth accounted for the third tive functions, he said.
He called the findings “of concern” for highest cause of positive tests at 9,940. “With the Clearinghouse, it’s pretty hard
FEB 2020 FEB 2021 FEB 2022
a federally mandated, safety-sensitive Since 2017, 10 states have legalized the to hide a positive drug test — three years
Source: U.S. Department of Transportation
workforce, most of which he says are recreational use of marijuana, bringing ago, that wasn’t the case,” Mr. Hammer
those in the trucking industry. semi-synthetic opiates, Mr. Sample said. the total number to 18 states. said. “But today it is, and it makes it strict-
“What is a little bit novel is looking “By 2021, that difference increased “The increase in marijuana positivity is er for trucking companies to hire.”
at marijuana and cocaine,” he said, five-fold,” he said. “Correlation doesn’t a concern,” said National Safety Council’s On several fronts, the evolving methods,
stating that in the case of marijuana, the equal causation, but it certainly raises, at Katie Mueller, who is the Yukon, Okla- perceptions and rules on marijuana use and
positivity rates on post-accident versus least in my mind, a level of concern that homa-based senior program manager of drug testing can be understandably confus-
pre-employment was just under a 4% somebody who uses these drugs is more the organization’s impairment practice, ing for workers, Mr. Hammer concedes.
difference — meaning drivers are possibly likely to be involved in an accident and especially given recent renewed efforts in To advise employers on these issues,
testing negative in pre-employment but have higher positivity rates.” Congress on legalization. Ms. Mueller said NSC has gathered
positive post-accident. Overall, after five years of steady The U.S. House of Representatives has perceptions from companies and found
The difference between post-accident declines for drivers, marijuana increased passed a bill to federally legalize mari- employees need more clarity on their
positivity testing increasing at a greater 8.9%, amphetamines increased 7.8%, and juana, but the measure is expected to be company policy around marijuana use.
rate than pre-employment testing was cocaine increased 5.0%. challenged in the Senate. Medical mari- “We encourage employers to establish
driven by higher positivity on post- The Federal Motor Vehicle Carrier Safe- juana, legal in 39 states and D.C., is also those policies and communicate them
accident tests for marijuana, cocaine and ty Administration also reported a rise in problematic because it gives workers the clearly to their employees,” she said.
TRUCKING GROUPS, DRIVERS ASSOCIATION CLASH OVER PUSH TO ADD HAIR TESTING
A s employers grapple with the surge
in both regulatory drug testing
requirements and drug positivity rates
in the federally regulated safety-sensitive
workforce, there has been a push to expand
Department of Health and Human Services.
“Hair offers the advantage. While it may
not be good for post-accident or reasonable
suspicion tests, it is a very good test at
detecting a pattern of repetitive use,” said
what somebody has a pattern of doing.”
Some trucking companies have already
adopted this testing method, according to
Mr. Sample, who said companies believe
that testing detects and deters drug use by
testing programs, OOIDA opposed the
addition of hair testing.
Todd Spencer, president and CEO of
OOIDA said some of the key issues with
hair testing include false-positive results for
drug testing modalities for truck drivers. Barry Sample, Seneca, South Carolina- employees. certain drugs and compromised results due
The American Trucking Association, the based senior science consultant for Quest The Owner-Operator Independent Drivers to environmental conditions and variances
Alliance for Driver Safety & Security and Diagnostics Inc. Association, which represents small- in hair types.
other trucking groups have proposed adding “In many ways, it’s a lifestyle test,” he business truckers and professional truck Mr. Spencer said the addition of hair
hair testing to the Federal Motor Vehicle said, appropriate for pre-employment, drivers and has over 150,000 members, testing to the mandatory guidelines would
Carrier Safety Administration program, return-to-duty, follow-up or random types opposes the proposition. In its response also burden truckers already overwhelmed
aided by a proposed congressional mandate of tests. “It doesn’t tell you what you did to a notice from the FMCSA on proposed with “volumes of regulations.”
to “accelerate” this initiative within the U.S. recently, but it certainly can help inform guidelines for federal workplace drug Danielle Ling
BUSINESS INSURANCE MAY 2022 11APPEAL
OF GLOBAL
INSURANCE
PROGRAMS
GROWS
SAN FRANCISCO — Risk managers
need to keep track of an organization’s
international exposures as a growing
number of U.S.-based businesses Andy Zoller, Dallas-based head program sector is property risks and in
expand their facilities and operations of international programs for U.S. the last few years it has seen increasing
globally. national accounts and middle markets demand for casualty, financial lines,
Demand for global insurance pro- at Zurich North America. and directors and officers liability
grams is accelerating as a broad range A regional business in the U.S. could coverage, Mr. Porter said.
of businesses, from middle-market to have customers that are outside the Many multinationals use their
larger multinationals, turn to them to U.S. and “might need an exporters captive insurers alongside their global
manage their exposures across multiple policy, or they may travel for a seminar program, said Brian McNamara, Ber-
countries. and need a kidnap and ransom policy,” muda-based head of global fronting at
Multinational companies are Mr. Zoller said. Allianz Global Corporate & Specialty
navigating a complex global risk envi- “We’ve seen an increasing shift in SE, a unit of Allianz.
ronment coming out of the pandemic, the number of global cyber programs, “Captives have become increasingly
and for many a global program may D&O programs, the professional more popular simply because there is
make sense, said experts interviewed programs, where more local offices are a lack of capacity in certain areas and
at the Risk & Insurance Management being requested to have certificates for then the effective rate increases on
Society Inc.’s Riskworld conference in local insurance in those lines than they certain lines of business have driven
San Francisco last month. have in the past and more countries are more companies to either increase
Businesses are looking for every edge offering those coverages,” he said. utilization of the captive they’ve got
they can find to manage costs, create or form a new captive or cell captive to
efficiency and ensure consistency in deal with that,” Mr. McNamara said.
the way their operations are protected, “Think about what risk managers Financial lines, errors and omissions,
and a global program provides that
opportunity, said David Rahr, global
are facing today. (A few) years ago, directors and officers liability and
cyber liability have been among the
leader of multinational at Marsh LLC, COVID didn’t exist; now the political most popular lines of business for
A
who is based in Chicago. multinational captives, he said.
BOU T 8,500 people
“Think about what risk managers issues in Ukraine and Russia Risk managers should evaluate all
are facing today. (A few) years ago, the options when looking at how to
attended Riskworld, the COVID didn’t exist; now the political have presented themselves.” manage their international exposures,
Risk & Insurance Man- issues in Ukraine and Russia have said Lori Seidenberg, New York-based
David Rahr, Marsh LLC
presented themselves. The risk land- global director, real assets insurance
agement Society Inc.’s scape has changed dramatically,” Mr. risk management, at Blackrock Inc.
a nnu a l c o n f er en c e, Rahr said. “We looked at how we could consoli-
On top of this, risk managers are In the past year, Zurich has added date programs and leverage our market
in San Francisco last facing 17 straight quarters of rate around 10 to 15 local cyber coverage share and our spend. What we found
month. It was RIMS’ increases, he said. wordings globally in response to was the best step we could do and what
first live annual conference since A growing number of middle-market customer demand. “We’re up to 30 could benefit the individual countries
businesses have international activities countries now where we can offer local was to have more regional policies,”
2019. The 2020 conference, which and operations, said Alfred Bergbauer, cyber wordings,” Mr. Zoller said. Ms. Seidenberg said.
was to take place in Denver, was New York-based head of captives, William Porter, head of international Finding an insurer willing to do a
canceled due to the COVID-19 multinational, programs and TPA programs for the Americas at Swiss global program was hard because so
services at the Hartford Financial Re Corporate Solutions in New York, many countries have local require-
pandemic and the 2021 conference Services Group Inc. said most of its U.S.-based clients are ments, she said.
slated for Chicago was converted For example, a business defined as buying global programs in which all “We also found that from a premium
into a virtual meeting. Risk man- small in the U.S. that is buying a busi- their coverage needs throughout the perspective we weren’t doing any one
nessowners policy from The Hartford world are rolled up. specific region justice, so consolidating
agers and insurance professionals could have 30 manufacturing plants Such programs are typically structured from a regional perspective was very
attended sessions and held in- overseas, Mr. Bergbauer said. with a master policy issued in the U.S. beneficial for us,” Ms. Seidenberg said.
“As we work with producers to talk that sits over the worldwide risks for a As Blackrock’s renewals come up
person meetings to discuss topics with companies about their operations particular company, and individual local in countries outside the U.S., the
ranging from market conditions and how best to protect their income policies issued in the various countries markets, terms and conditions are
and political risk to cyber liability statement, cash flow and balance in which it does business. starting to look more like U.S.-based
sheet, we’re finding a large number are Laws and regulations vary by forms and the pricing is more like a
and climate change. Following underinsured or improperly insured country as to which exposures should hard U.S. market, she said.
is some of Business Insurance’s when it comes to foreign programs,” be covered by a local insurer licensed “The more my other regions come up
coverage of the conference. More he said. to conduct business in a particular for renewal, the more they are looking
More companies are going global country, as do tax requirements. like a challenging U.S. market,” Ms.
coverage from RIMS is available every year, which is increasing demand About 90% of Swiss Re Corporate Seidenberg said.
at businessinsurance.com. for different types of coverage, said Solutions’ portfolio in the international Claire Wilkinson
12 MAY 2022 BUSINESS INSURANCETECHNOLOGY
BUILDING DATA In addition, organizations should have
separate response plans for data breach- SOLUTIONS
BREACH RESPONSE es and ransomware attacks, to ensure CAN HELP CLOSE
PLANS REQUIRES the right response team is in place for
GAP ON RISK
each type of event. “You have to make
TEAMWORK sure you have the people in the room,”
Ms. Novoa said. SAN FRANCISCO — The laundry
SAN FRANCISCO — With the Gap does an annual table-top ransom- room in the home of Richard La Gala,
increase in cybercrime over the past two ware exercise with its senior executives vice president, risk control services inno-
years, risk managers should work with that is led by an outside consultant. It vation, for insurer Sompo International,
leaders throughout their organizations plays out scenarios in which executives flooded 12 times in 20 years — an issue
to develop breach response plans and have to make decisions on whether that was mitigated by installing leak
train all employees, a risk manager said. to pay a ransom demand. “It’s very detection sensors, he said.
Jenny Novoa
“As a risk manager, you have to part- important to have a specialized plan,” Two factors are driving innovation
ner with the right people in your orga- “My team has to have specialized Ms. Novoa said. in risk management in business: losses
nization,” said Jenny Novoa, senior training every year because they have To mitigate losses, organizations and the widespread personal adoption of
director of risk management and safety access to the HR database. You have to should also prioritize their IT systems technology to improve lives, according to
at Gap Inc. in San Francisco. have that process in place,” Ms. Novoa and decide which ones have to be Mr. La Gala, during a session on inno-
She was speaking last month during a said. replaced immediately and which ones vation in risk management at Riskworld,
session of Riskworld, the Risk & Insur- Training of all staff on data security do not. “Services to recover backups are the Risk & Insurance Management
ance Management Society Inc.’s annual issues is also important because any expensive, depending on the level of Society Inc.’s annual conference in San
conference in San Francisco. employee can allow criminals access to service you require,” Ms. Novoa said. Francisco last month.
Ms. Novoa said she works closely on a corporate system by clicking on a link In addition, organizations should “The reason we are seeing a lot of
cyber risk with Gap’s chief information in an email, she said. identify breach response vendors — applications in the commercial space
security officer and chief privacy officer, In addition, organizations should hold including law firms, credit-monitoring is because of what we are seeing in the
who do regular audits of the company’s regular events, such as a cybersecurity services, call centers, public relations personal space,” Mr. La Gala said.
vendors, including cloud data storage month, to maintain awareness of the and crisis management service provid- Emerging technologies can help com-
vendors, from a cybersecurity perspective. issue, Ms. Novoa said. ers, and ransomware negotiation firms panies mitigate both property and people
Internal access to data also needs to “Your employees can hurt you, so you — and have them pre-approved by risks. These include “smart buildings”
be carefully vetted, with restrictions want to make sure that it’s front of mind insurers, she said. that can detect water leaks, wearables
imposed at an individual level. For for them,” she said. And organizations should build a that can correct ergonomics, sensors that
example, Ms. Novoa has claims report- C-suite executives and their assistants relationship with their local FBI office. can detect dangerous chemical leaks, and
ing staff who need access to the compa- should have specialized training because “They are there to assist you,” Ms. applications to track fleet driver behaviors.
ny’s HR systems, but she does not need they are often the targets of attacks, Ms. Novoa said. “Look at your losses and see what’s
access to the system, she said. Novoa said. Gavin Souter there,” Mr. La Gala said.
Mr. La Gala said some issues, such
as proving return on investment to
company executives, can be managed by
due to soot and heat, Mr. Lubben said. partnering with insurers, who can help
It can be hard to get operations to buy vet programs and devices and create
into business continuity plans, but it “pays pilot and test programs to help gather
dividends for us,” he said. In addition to data that shows how losses are mitigated
having buffers, it’s important to ensure with technologies.
that facilities have a plan if the fire spreads, Angelica Caldevilla, risk manager for
such as proper storage of combustible and Kawasaki Motors Corp., U.S.A., said
inflammable materials, he said. a noticeable increase in frequency and
Climate change risk management is severity of vehicle accidents among trav-
increasingly becoming part of organiza- eling sales staff spurred the company to
tions’ enterprise risk management pro- pilot an application that tracked a driver’s
grams, Mr. Lubben said. Listing climate speed and road behaviors, which were
change on its risk register has brought then used to provide additional training
RISK MANAGERS San Francisco last month.
It sends engineers out regularly to test
visibility to the risk to Henry Crown’s
board and senior management, he said.
or, in some cases, rewards.
“We were trying to think of a way to
CAN HELP MITIGATE the construction of hotel properties to “When they’re making strategic deci- get ahead of these issues and be proac-
CLIMATE RISKS make sure they can withstand hurricanes
and floods, she said. “We don’t want
sions about acquisitions, for instance …
we can start to think about where a target
tive,” she said. “We wanted to reduce
distracted driving. People are talking and
SAN FRANCISCO — Business recovery guests worrying about the roof or walls company is located and how climate texting while driving.”
plans and enterprise risk management flying off,” she said. change will affect those facilities we are Some of the challenges in bringing the
programs are among the strategies that Ahead of hurricane season it also purchasing,” he said. app to drivers’ phones included privacy
can help risk managers tackle climate contacts its hotels to make sure they are When it comes to insurance, retaining issues, she said.
risks, experts say. ready and are testing their emergency a larger portion of the risk through Mr. La Gala said that’s where working
Retreating from climate risk isn’t an preparedness plans and conducting drills. self-insured retentions and using a captive with vetted technology companies can
option because “people are always going Businesses can mitigate the effects of insurer may help mitigate the impact of help — most have legal advice and
to vacation where the earth moves and wildfires by building defensible space climate risks, the risk managers said. guidelines for technology.
wind blows,” said Jennifer Pack, director around properties and having sound In Hurricane Maria, the retentions in Louise Esola
of risk management at Hyatt Hotels business continuity plans, said Michael Hyatt’s property insurance program were
Corp., which has a portfolio of more than Lubben, director, global risk manage- so high that there was no insurable loss
1,100 hotels and resorts in 70 countries. ment, at Henry Crown and Co./CCI. to the program for its Florida properties,
Hyatt’s risk management focus is on For example, designing a golf course Ms. Pack said.
making sure its hotels are protected prop- around a high-end resort helped mitigate “If you work with underwriters that
erly and they have sound business recovery the impact of the Thomas wildfire in 2018 don’t really like the risk the first thing is
plans, Ms. Pack said during a session at on one of the company’s properties in Cal- to take a higher retention,” Mr. Lubben
the Risk & Insurance Management ifornia. As a result, there was no direct fire said. “Sometimes that helps.”
Society Inc.’s Riskworld conference in loss to the resort, though it did suffer losses Claire Wilkinson
BUSINESS INSURANCE MAY 2022 13INTERNATIONAL
PROFILE: BARBADOS
MARKET
DEVELOPMENTS
Updated April 2022
■ Following a GDP contraction
of almost 18% in 2020, the
expected recovery in 2021 of
101
The Barbados insurance market in 2020 ranked 101st around 10% was affected by a
globally in property/casualty premiums, trailing surge in COVID-19 cases during
larger Caribbean island states Jamaica (83rd) and the the first quarter, then the onset
Bahamas (88th) but ahead of the U.S .Virgin Islands of the Delta variant of the
(107th) and Antigua and Barbuda (130th). Growth in virus. Continued restrictions on
2019 of 9.6% in premiums was the highest since 2013. global travel were a key factor
2020 saw a contraction in nonlife premiums of 6.97% in preventing an economic
to BBD 453.7 million ($248.4 million), but the market return to pre-pandemic levels.
proved resilient in terms of profitability despite the ■ Despite a contraction of 6.6% in
decline. Although there were claims in Barbados from premiums written by property/
the eruption of La Soufriere volcano in Saint Vincent casualty insurers in 2020, with
in April 2021 and the passage of Hurricane Elsa in the small marine aviation and
GLOBAL July 2021, neither event caused major market losses. transit sector the most seriously
P/C MARKET Mergers and acquisitions in recent years are expected affected in percentage terms —
RANKING to strengthen the market in Barbados. AREA showing a drop of 25.7% — the
166
market proved resilient in terms of
profitability. The absence of losses
from natural perils and the positive
MARKET SHARE effects on property and auto
PROPERTY loss ratios of reduced economic
MARINE, 36.8% square miles activity and traffic, respectively,
AVIATION & enabled the market to show an
TRANSIT underwriting profit for the first
1.2% time in at least five years, while
pre-tax profits were also at their
MISC.
2.0% POPULATION highest level over that period.
302,674
■ September 2021 saw the
PA & HEALTH announcement of Bermudian
CARE WRITTEN Coralisle Group’s acquisition
BY NONLIFE of Massy United, one of the
COMPANIES market leaders. Once known as
7.1% Colonial Group, CG was primarily
AUTO focused on personal insurance
LIABILITY 34.8% in the Eastern Caribbean.
18.1%
MARKET CONCENTRATION ■ In December 2019 the acquisition
of local insurer Trident by ANSA
55%+
McAL (Barbados) Ltd., part of
MARKET GROWTH the same Trinidadian parent
In millions, U.S. dollars group as the insurer Tatil, was
Life Nonlife PA & Health confirmed. Although somewhat
300 More than 55% (estimated) delayed by the pandemic, all
of the necessary regulatory
market share of top four insurers
250 approvals were completed
by May 2021. The Barbadian
200 company’s operations merged
with those of Brydens Insurance,
Tatil’s branch in Barbados,
150 2022 GDP CHANGE under the Trident brand.
(PROJECTED)
100
50
0
2016 2017 2018 2019
Source: Axco Global Statistics/Industry Associations and Regulatory Bodies
2020
8.5%
COMPULSORY INSURANCE NONADMITTED INTERMEDIARIES MARKET PRACTICE
■ Auto third-party bodily injury and property damage Nonadmitted insurance is not Local brokers or agents must be While some major projects and
permitted in Barbados because the registered to do insurance business. commercial organizations are
■ Workers compensation (state scheme)
law provides that insurance must be They are not permitted to place insured directly offshore, fronting is
■ Professional indemnity for insurance brokers purchased from locally registered business with nonadmitted insurers, a more common approach, though
■ Professional indemnity for companies that provide insurers, with the exception that use except where the regulator is insurers are increasingly reluctant
corporate services or trust services for profit of non-registered insurers may be satisfied that similar protection at to engage in this without taking a
permitted by the Financial Services comparable cost is not available retention for their own account.
■ Shipowners liability for marine oil pollution Commission if it is satisfied that through a registered insurer.
(financial guarantee or insurance) similar protection at comparable
■ Tour operators and travel agents — a bond, cost is not available through a
professional indemnity insurance or other registered insurer. Information provided by Axco.
financial guarantee For free trial access to
global insurance intelligence,
visit axcoinfo.com.
14 MAY 2022 BUSINESS INSURANCELEGAL BRIEFS
Court reverses,
rules for Target
Plaintiff Circus Circus LV LP, a 2.8
million-square-foot casino in Las Vegas,
unsuccessfully appealed a ruling by the
DOCKET
U.S. District Court in Las Vegas in busi-
n In an unusual move, a federal district ness interruption litigation filed against
court reversed its 2021 decision and AIG unit AIG Specialty Insurance Co.,
ruled that Target Corp. can recover from according to the ruling by the 9th U.S.
Chubb Ltd. units the settlements it paid Circuit Court of Appeals in San Francis-
to banks in connection with a 2013 data co in Circus Circus LV, LP v. AIG Specialty
breach under its general liability policy. Insurance Co. COURT GREENLIGHTS
The U.S. District Court in St. Paul said “The district court correctly held that BIOMETRIC LAWSUIT
it reconsidered its February 2021 ruling in Circus Circus does not plausibly allege A federal district court in Chicago
Target Corp. v. ACE American Insurance that it suffered direct physical damage to refused to dismiss a putative
Co. et al. after Target filed a motion to its property under terms of the Policy,” class-action lawsuit that charges
alter or amend the judgment. the ruling said. Ralph Lauren Corp. Inc. with
The Minneapolis-based retailer was the “Despite Circus Circus’s allegation that violating the Illinois Biometric
Lakers can proceed target of a computer breach that exposed
the payment card information of some
the COVID-19 virus was present on its
premises, it has not identified any direct
Information Privacy Act. Genesis
Martinez, who was an employee
with COVID suit 110 million customers in December 2013.
It filed suit against Chubb Ltd. units
physical damage to its property caused by
the virus which led to the casino’s clo-
of the Ralph Lauren facility in
Aurora, Illinois, from May 2018
n A federal district court has ruled that in federal district court in St. Paul in sure,” the ruling said. to August 2019, filed suit against
the Los Angeles Lakers can proceed with November 2019, charging they improp- The 4th U.S. Circuit Court of Appeals New York-based Ralph Lauren,
COVID-19-related property damage and erly refused to indemnify it for part of the in Richmond, Virginia, issued a one-para- charging it violated BIPA by
bad faith claims against a Chubb Ltd. costs it incurred in connection with the graph decision in upholding a ruling by scanning, collecting, storing and
unit, although it reiterated its earlier rul- data breach. the U.S. District Court in Baltimore in using employees’ fingerprints
ing dismissing the NBA team’s business The suit asked to recoup up to the $74 favor of FM Global unit Affiliated FM and biometric information for
interruption claim. million in costs that Target incurred, but Insurance Co. in litigation filed by Balti- its timekeeping system, without
In August, the U.S. District Court in the court found that the company could more-based Cordish Cos. Inc. in Cordish proper written consent or making
Los Angeles had dismissed the Lakers’ not demonstrate “loss of use” in connection Cos. Inc. v. Affiliated FM Insurance Co. the required disclosures, according
COVID-19-related business interrup- with the inoperability of the payment cards. “We have reviewed the record and find to the ruling in Genesis Martinez
tion litigation against Chubb unit Federal In its reversal, the court cited a 2010 no reversible error,” the ruling said. v. Ralph Lauren Corp. Inc.
Insurance Co., in which it alleged that the ruling by the 8th U.S. Circuit Court of
virus’ presence at the Staples Center and
the surrounding transportation stations
Appeals in St. Louis in Eyeblaster Inc.
v. Federal Insurance Co. that it found Brooklyn Nets settle SYNAGOGUE LOSES
COVID APPEAL
physically altered the property. The court
called these “merely legal conclusions
“factually analogous” to the Target case
and that the retailer had met the “loss of
discrimination suit The 8th U.S. Circuit Court of
Appeals in St. Louis affirmed
couched as factual allegations” and said use” requirement. It vacated its previous n A discrimination lawsuit filed against a lower court’s dismissal of
the team had failed to support its conclu- ruling, denied the insurers’ motion for the Brooklyn Nets basketball team by two a COVID-19-related business
sion that the virus’ presence constituted summary judgment, and ruled that Target former team attendants has been settled interruption lawsuit filed by a St.
“direct physical loss or damage.” has coverage under its policies. for an undisclosed amount. Louis synagogue. The appeals
The team had more success with a first Edward Bolden Jr. and Juwan Williams court’s two-page ruling in United
amended complaint, filed with the court sued the NBA team in U.S. District Court Hebrew Congregation of St.
in October, that alleged the same previ- in Brooklyn in November, according to the Louis v. Selective Insurance
ously dismissed claims but with additional complaint in Edward Bolden, Jr. and Juwan Co. of America, a New Jersey
factual allegations. Williams vs. Brooklyn Nets, LLC. Corp., cited its decision in Oral
The Lakers contended the virus caused In their lawsuit, the plaintiffs, who are Surgeons, PC v. Cincinnati
physical alterations to covered properties black, charged that despite “great efforts” Insurance Co. in affirming the
when it “landed on, and adhered to, sur- to secure full-time jobs with the Nets they dismissal of the litigation filed by
faces such as fabric seats, elevator but- were told by their white supervisor that the synagogue. In its complaint,
tons and air ducts, causing a physical and neither would progress beyond their team the synagogue had cited the loss
chemical reaction that transformed the attendant positions, although he had men- of “revenue gaining activities”
surfaces into vectors of viral spread called tored other, non-Black team attendants. due to the stay-at-home orders
fomites,” the March ruling said. They also said they expressed opinions issued by the St. Louis County
The ruling said that as a result, the team about police brutality, and the supervisor Director of Public Health.
upgraded its properties to include “new expressed his disagreement on the issue.
air filters; touchless light switches, toilets, The supervisor terminated them in SOLARWINDS CASE
and sinks; sleeves or coatings for high- November 2020 without providing a rea- MOVES FORWARD
touch surfaces; and plexiglass dividers,” son, according to the complaint. A team A Texas federal court largely
contending the properties were not usable official later told them that the supervisor refused to dismiss directors
until those upgrades were completed.
“The Lakers alleged both the Covered AIG, FM prevail had said they were “lazy” or unable to fol-
low directions, the complaint said.
and officers securities litigation
filed against SolarWinds Corp. in
Properties were physically altered, and that
those alterations caused detrimental eco-
in COVID cases Their lawsuit charged the team with
race discrimination and retaliation under
connection with a December 2020
cybersecurity breach. The lead
nomic impact. Accordingly, Lakers stated n Federal appeals courts affirmed lower federal, state and New York City law. plaintiff in the litigation is the
a claim, here, for declaratory judgment court rulings in favor of American Inter- The team denied the charges in a New York City District Council of
and breach of contract as to the Policy’s national Group Inc. and FM Global units response filed in February. Carpenters Pension Fund, which
Property Damage clause,” the court said in in COVID-19-related business interrup- In a letter to the court, plaintiff attorney filed suit against SolarWinds,
permitting the litigation to proceed. tion litigation filed by a Las Vegas casino Edward Cerasia II, of Cerasia Law LLC its officers and two securities
The court also ruled the Lakers can and a Baltimore real estate development in New York, said the parties had agreed companies, according to the ruling
proceed with their bad faith claim with and entertainment operating company, to settle the case and were “in the process by the U.S. District Court in Austin.
respect to the property damage. respectively. of finalizing the settlement papers.”
BUSINESS INSURANCE MAY 2022 15You can also read
