What is Total Cost of Risk and why should I care?

“What gets measured…gets managed!” This statement is the fundamental principle behind the concept of “Total Cost of Risk” (TCoR), and I’ve been saying this for years. The question that I am asked all the time is, “what is total cost of risk (TCoR) and why do I care about it?”

Are you an owner of an ATV, snowmobile, jet ski or RV? Then you know the value of a good time. What is not so easily known is where to find the best insurance protection for your toys. Homeowners and Auto policies rarely cover both property and liability adequately for these types of vehicles. Therefore, in most cases, it is a best practice to procure a stand alone policy. A stand alone policy has the best safeguards in place to ensure proper coverage is in full effect. At a minimum, liability insurance is required in most states and relying on a Homeowners or Auto policy to provide the necessary coverage is a risky assumption that can lead to gaps in coverage. ATVs, RVs, jet skis and others are generally seen as a carveback on most policies. However, when specifically scheduled on an auto policy, ATVs are only covered for liability, not medical payments or physical damage and restrictions exist on who and what is covered. Another downfall is the increase in overall deductibles and elimination of liability coverage for other people.

Many of the cyber risks discussed today revolve around outside intrusions such as data breaches, viruses, or reputational risks brought on by improper social media use. Another significant risk that must be considered is a major data loss event, whether caused by a technical malfunction or a non-technical property loss such as fire or water damage. While you cannot guarantee a data loss will not happen, there are ways to indemnify and protect yourself if you experience such a data loss.

Doing Business Abroad: What's Next?

As we have highlighted in Part 1 and Part 2 of Doing Business Abroad, a company's Directors and Officers can be exposed to a large number of risks overseas. One particular area that can often be overlooked is developing and implementing solid policies and procedures for protection from the Foreign Corrupt Practices Act as well as the UK Bribery Act. Directors & Officers Liability policy does provide some mitigation for this risk, however, the cost for violating these laws could cause irreparable harm to your company including paying fines well in excess of coverage that is available in the market place.

How to Design Directors & Officers Program That Protects Company’s Assets both in the United States and Abroad

As we highlighted in Part 1 of doing business abroad, understanding the personal exposures of Directors and Officers is a challenge for today’s multinational companies. This is particularly important when you begin to contemplate company employees’ individual duties, the probability of potential lawsuits and the regulatory landscapes that can vary widely from country to country.

“US Executive Working Abroad Faces Charges Related to Protection Scam and Bribery”

This headline means much more than embarrassment for the American company in its overseas operations. It means exposure to enormous financial liability if the foreign court finds the executive culpable, along with associated defense costs, even if the court finds the executive innocent of the charges.

Contracts, Insurance and Certificates…..the saga continues….

As a follow-up to my colleague’s recent post in Construction Executive, I wanted to emphasize the need for properly written contracts.  In construction projects, the contract documents form the basis of the agreement between the parties involved in the project. Written construction contracts impose many duties, obligations and liabilities on contractors. Although project owners pay great attention to the operational issues addressed in these contracts, many pay too little attention to the risk and insurance implications of various contract provisions.

Monitoring insurance compliance in contracts is an important, albeit challenging, risk mitigation strategy. Read Al Sica’s recent article on the subject posted on Construction Executive Magazine website.

Jury verdicts for premises liability against those who own or manage land, stores, taverns, shopping malls and apartment complexes just keep climbing. A few California verdicts include a $7.5 million judgment after a chiropractor slipped and fell in a Starbucks and a $55 million verdict for a gang-related shooting against a security company that oversaw on-site safety at an apartment complex.

Even when no injury occurs, after any workplace incident or accident, a written incident report allows a timely investigation. Some incidents are minor and need only slight fixes to prevent their recurrence. However, in more serious situations where a serious injury or property damage could have or did occur, a subsequent failure analysis allows management to determine how to best prevent similar occurrences.