Industry IQ

Ringing Up NO SALE
Many businesses are skimping on the purchase of liability protection because company owners don't believe their risk exposure justifies the expense.

According to the 2008 Chubb Private Company Risk Survey of for-profit company risk managers, 37 percent of U.S. companies don't buy any type of management or professional liability coverage, 63 percent don't buy EPLI, 66 percent don't buy crime coverage, 63 percent don't buy D&O, and 91 percent don't have cyber liability coverage.

Business owners were also less concerned about financial damage caused by lawsuits. Compared with 2005 results, only 23 percent were concerned about the issue regarding lawsuits from wrongful termination, discrimination or sexual harassment as opposed to 43 percent in 2005.
Concern about lawsuits over employee/retiree benefits went from 18 percent in 2005 to 11 percent. D&O liability issues dropped from 9 percent in 2005 to 5 percent.
The irony: 62 percent of U.S. private companies have experienced some sort of management or professional liability event in the past five years, including workplace crime (32 percent),
EPL (24 percent), and D&O (22 percent).
31 percent of companies expect to experience a crime-related event, 26 percent a D&O incident, and 19 percent an EPL incident.
The average cost of an EPL-related event, including judgments, settlements,
fines and legal fees, is $63,114, according to the Chubb survey.

By the Numbers…AIG Meltdown
$85 Billion–Bailout amount
$18 Billion–AIG losses sustained over past three quarters
$30 Billion–Analysts' estimate of AIG's asset sales
$971.7 Billion–AIG liabilities at the end of June 2008
$110 Billion–Revenues generated by AIG's life and property/casualty units per year

Source: Reuters

Examining the Value of Your Health
To save money, many Americans are cutting back on medical care–potentially putting their health at risk–according to a study by the National Association of Insurance Commissioners (NAIC).
o The study of 686 U.S. consumers found that 22 percent have reduced the number of times they see the doctor to save money, and 11 percent have cut back on the number or dosage of prescription drugs.
The survey also discovered that despite these cutbacks, the majority has not reduced, cancelled or changed their life, automobile and homeowners insurance policies.
o For Auto: 80 percent have not changed their auto coverage, 7 percent reported changes; of these, 4 percent reduced coverage, 2 percent fell behind on payments and 1 percent cancelled their policy.
o For Homeowners: 74 percent have not made changes to their homeowners insurance policy; 5 percent reported changes; of those, 2 percent reduced coverage, less than 1 percent fell behind on payments and 3 percent cancelled their policy.
o For Health Insurance: 85 percent have not made changes to their health insurance policy; 5 percent reported changes; of those, 2 percent reduced coverage, 1 percent fell behind on payments and 2 percent Life insurance: 78 percent have not made changes; 6 percent reported changes; of those, 1 percent reduced coverage, 2 percent fell behind on payments and 3 percent cancelled their policy.

Your Home is a TV Star!
Home makeovers involve more than hammer and nails–there's insurance to consider, too.

The Hanover Insurance Group is working with two local insurance agencies in North Carolina and Wisconsin and the Extreme Makeover: Home Edition ABC-TV program to provide insurance advice and one year of homeowners insurance coverage. The programs will air this fall Sundays 7 p.m. EST/6 p.m. CST on ABC.
Hanover and BB&T Insurance Services of Raleigh, N.C. are working with the program and the King family of Charlotte, which recently received the news that their home will be featured on the program.
In Wisconsin, Hanover is collaborating with Klein Insurance Group of Madison Inc. to remodel the home of the Anders-Beatty family of Richland Center, Wis.

How to Be A Firefighter
October is Fire Prevention Month, and this checklist from the Fire Equipment Manufacturers' Association can help agents and brokers to review fire safety planning and preparedness with their customers (www.femalifesafety.org) 1. Know building codes: Evaluate your building's fire protection plan, communicate it with tenants, and become familiar with local building code requirements, going above and beyond the minimum required for precautionary measures.

2. Assess the building: When determining what fire equipment is needed, consider what type of building it is, what it is used for, and how it was built.
3. Check fire extinguishers: Monthly, check to make sure fire extinguishers are operable and pressurized. Report any damage, such as leaks or corrosion to your equipment distributor. If damage is found, it should be replaced immediately.
4. Inspect standpipe and occupant fire hose stations: Defend-in-place fire fighting equipment is a must have item, and should be thoroughly inspected. This equipment is easy-to-use on small fires after the fire department has been called and everyone is safe.
5. Understand fire suppression systems: Mandated by NFPA standards in special hazard situations, such as in commercial kitchens and industrial areas, fire suppression systems provide fast, on-site protection at the early stage of a fire.
6. Implement and communicate an evacuation plan: Exit signage and emergency communications are important components of escape planning. Every building should have visibly placed signs to indicate exit routes, and emergency drills should be practiced regularly.
7. Train and educate: Equipment training is critical. For training information and interactive programs, visit www.fireextinguisher.com, www.rackhosetraining.com and www.firesystemstraining.org.