Weather-related and other natural disasters, such as devastating tornados, continue to rise in frequency. As climate change continues, such events can only be expected to occur more frequently and with increasingly disastrous results. Businesses need to be prepared.

In addition, news reports surface almost daily regarding cyberattacks targeting a range of business sectors including IT, construction, airport security, banking, energy, software component providers, and government databases. The number and complexity of ransomware and other cyberattacks continue to increase, and an appetite to target smaller companies. While there continue to be substantial risks around data breaches, other cyber risks loom even larger, and cyberattacks may lead to substantial business interruption, property damage, and even loss of life or severe bodily injuries.

Finally, a more stringent regulatory environment imposed by the federal government is anticipated, especially concerning cybersecurity, cryptocurrency, and in the Environmental, Social and Governance ("ESG") space.

A holistic approach to insurance and risk management is critical in these evolving and uncertain times. Companies should engage trusted brokers and experienced insurance counsel to evaluate their insurance programs. Any evaluation should incorporate the considerations outlined in the following 2022 Insurance Risk Management Checklist:

1. Pinpoint top risks

Identify your physical, location, personnel, and technology risks.

Physical risks. Is your building at risk for fire or explosions? Does it contain hazardous materials that could spill or leak? Have you taken steps to stop the spread of disease in the workplace? If your building is shut down for an extended time period, how would that affect your business? Are your employees working in offsite locations?

Location risks. Is your business near a locale at risk for fire, storms, or other natural disasters?

Personnel risks. Do your employees have access to products, information, or money that is susceptible to embezzlement, theft, or fraud? Do they use personal vehicles for company business?

Technology Risks. How would a power outage affect your operations? Do you or your vendors have custody of or store Personally Identifiable Information and/or medical information? Do third parties have access to your computer systems? Do your employees have mobile devices? Remote access to your systems? How are you managing data and network security threats in the new remote working environment?

2. Audit your coverages

Lines of insurance. Do you have the insurance you need to cover your top risks? Consider - 

• General liability insurance
• Professional liability insurance
• Errors & omissions liability insurance
• Directors' and Officers' liability insurance
• Employment practices liability insurance
• Employee benefits liability insurance
• Fiduciary liability insurance
• Cyberliability and data privacy insurance
• Property and business interruption insurance
• Contingent business interruption insurance
• Supply chain insurance
• Builder's risk insurance
• Owner and Contractor Controlled Insurance Programs (OCIPs and CCIPs)/Wrap Policies
• Pollution liability insurance
• Product liability insurance
• Fidelity & crime insurance
• Terrorism insurance
• Insurance for the spread of communicable disease
• Insurance for losses from governmental closure orders

Limits & Deductibles/SIRs. Are your limits sufficient? Are you comfortable with your deductibles or self-insured retentions?

Insureds. Are your subsidiaries and affiliates insured? Current (or even former) officers, directors, and employees?

Change in control. Are any upcoming purchases, sales, and/or mergers or acquisitions completed?

Emerging risks. Are you adequately protected for any supply chain, ESG, global climate change, pandemic disease, terrorism, and data and systems security risks?

3. Prepare for policy renewals

Plan ahead. Do not wait until the last minute, especially in today's marketplace where premiums have skyrocketed and "shopping around' could translate into major savings.

Key considerations. What are you trying to achieve with your renewals? Have you considered that your insurer might decline to renew with you? Consider -

• Increasing coverage limits
• Broadening coverage
• Obtaining better pricing
• Changing insurance carriers

4. Review the terms of your policies

Reality check. Do your policies really cover what you think they cover? Carefully review all provisions, endorsements and exclusions.

Business growth. Has your coverage grown with your business? Do not default to just carrying your coverage over from one year to the next. Your insurance coverages must change and expand in line with changes and expansions in your business. 

5. Implement processes for administering your policies

Notice. What notice requirements are in your policies? What triggers a claim that must be reported under the terms of your policies? Have systems in place for tendering notice. Implement systems so that those responsible for providing notice are aware of claims or potential claims that must be reported.

Proof of loss. What do your policies require be included in proofs of loss? The timing of such submissions?

Cooperation. What do your policies require regarding cooperation and insurer consent before incurring expenses and settling claims?

Repair or replacement of damaged property. What do your policies require regarding the timing of beginning or completing repairs or replacement of damaged property?

Suit limitations provisions. What do your policies require regarding the timing of any action to recover under your policy?

6. Survey your broker agreements

Clarity. Do they clearly set forth each side's responsibilities?

Compensation. Do they spell out the compensation to be paid to the broker and for what services?

Termination. Are the termination clauses clear?

Dissputes. Are there provisions addressing how disputes are to be resolved?

7. Analyze your vendor agreements

Indemnification. Do they include adequate indemnification clauses?

Insurance requirements. Do they include sufficient insurance requirements? Are vendor policies primary and non-contributory with respect to your own policies? Do you have systems in place to ensure insurance requirements are satisfied?

Protection & privacy. Do they include provisions regarding data protection, data breaches, and protection of private information and trade secrets?

Disputes. How are disputes to be resolved?