As we go to press for our December issue, the news media is awash in stories involving Penn State, Jerry Sandusky and child molestation. Whatever your opinion of the guilt or innocence of the parties involved, a quick study of the timeline makes it clear that Penn State mishandled an already bad situation by failing to follow up on internal reports of suspected abuse.

Yet based on reader comments to an article I wrote for propertycasualty360.com ("Penn State Sex Abuse Scandal: From the Start, a Risk Management Nightmare") on the risk management aspects of the case, you would think I had tied Joe Paterno to the bumper of a Hummer and dragged him through a field of broken glass. Some readers posted outraged comments that writing about Penn State’s risk management situation was sensationalistic and that all parties were innocent until proven guilty.

To which I reply: Hey, chill. I’m on your side.

In our world of instantaneous access, nobody—least of all those who position themselves as trusted advisors—can afford to close their eyes and plug their ears to ugly news. We may not have broken the story of the Penn State scandal, but once it’s out there, we can’t ignore it. Agents and brokers must be able to counsel their customers on how to avoid similar situations in their own businesses.

Because believe it or not, there’s a good news angle to this horror story, an angle that makes insurance professionals look like geniuses. Basic risk management principles might not have prevented the Penn State fiasco but could very well have ameliorated it. More to the point, following basic risk management principles also is in line with something even more important: doing the right thing.

It’s been pointed out to me that Pennsylvania is not one of the 13 states that require reporting suspected sexual abuse to the police. That may be, but wouldn’t that have been the right thing to do—especially because the allegations involved a grown man sodomizing a grammar-school kid?

In its quest to protect the client from liability, risk management requirements often go above and beyond the letter of the law—and in the process, intersect with a higher ethical standard. And in a world where insurance too often suffers a less-than-positive image, the convergence between doing what’s smart and doing what’s right is a good thing.

This issue of AA&B includes our annual Review & Outlook coverage, more of which can be viewed online at propertycasualty360.com. As we do every year at this time, we spoke with agents and brokers, insurers, wholesalers, associations, consultants and young insurance professionals on the year just passed and the year ahead. As always, their comments provide an illuminating look at the state of the industry on the cusp of a new year.

Here’s hoping 2012 brings the best of everything to you and yours!

Special Reports /

What&rsquo;s Smart and What's Right

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