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Ten Tips for Mitigating Risk in Construction Projects

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Coordinating insurance and risk management concerns with the need of a construction project can be challenging. In their latest, online-exclusive column in Risk Management magazine, Robert Horkovich and Kevin Connolly of Anderson, Kill & Ollick, offer some important tips to ensuring that insurance contracts and construction contracts are properly aligned.

1. Recognize the construction contract as the bedrock of risk management.
The contract documents are the place for agreements to provide insurance, as well as additional insured provisions, indemnity and exculpation clauses. They are also the place to make clear which parties are responsible for the many surprises that arise during the course of construction, from latent subsurface conditions to accidents and failures to construct the project in the manner that the owners and designers intended.

For more, check out the rest of the article, only on RMmagazine.com.

Data Privacy in an Online World

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As social and business networking sites have taken off, data privacy has become increasingly more vulnerable. How can companies protect themselves while still taking advantage of what these new tools have to offer? In his latest online column, Joshua Gold of Anderson Kill & Olick examines the insurance and risk management measures that can prevent or mitigate unauthorized data access online.

Many forms of liability insurance protect against invasion of privacy claims. Should a policyholder be confronted by such a claim, umbrella insurance, general liability insurance, errors and omissions policies and other stand-alone specialty insurance policies should be checked for potential coverage. More proactively, if an insurance portfolio review reveals that those provisions have been written out of the businesses’ portfolio of insurance, the broker should be enlisted to get those increasingly important coverages back in.

For more, read the entire article, only on RMmagazine.com

Coverage for Theft of Third Party Property and Data

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These days most policyholders are entrusted with a wide-range of third-party data from health and personal information of their employees to financial and customer records. But often, when this data is stolen insurers are reluctant to pay for thee kind of losses. In the latest online-only column from Anderson Kill & Olick, Joshua Gold points out that according to many authorities, these losses should actually be covered.

In one recent case, for example, a policyholder was the victim of a computer hacker. The insurance company refused to pay the claim, but the court rejected the insurers attempts to evade payment and ruled that the policyholder was entitled to crime coverage for the theft of customer data.

Such a ruling is not only supported by the language of many crime policies (which often contain a provision indicating that they provide coverage for the theft of property not owned but in the possession of the policyholder), but also by numerous crime insurance coverage cases over the decades.

For more on this important coverage issue, check out the rest of the article, only on RMmagazine.com.

Gulf Oil Spill, Day 44

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As the Gulf oil spill enters its 44th day, BP officials are now fearing that it may be impossible to stop the flow of oil until relief wells are completed in August. The company is now hoping to stem the flow by using underwater robots that will attempt to cut the leaking riser pipe and install a custom fitted cap that will allow them to siphon the gushing oil the surface. It is a risky procedure that, if unsuccessful, could actually cause the flow of oil to increase, but it seems that this may be the only option left.

Meanwhile, the Obama administration has begun civil and criminal investigations into the circumstances surrounding the spill, intending to prosecute any responsible parties to the “fullest extent of the law.”

One person briefed on the inquiry said it was in an early stage and that no subpoenas had been issued yet to BP, the owner of the well. It was unclear whether any had gone to Transocean, which leased the Deepwater Horizon, the nine-year-old drilling rig that exploded and sank in April, to BP; Cameron, the company that manufactured a “blowout preventer” that failed to function after the explosion; or Halliburton, which performed drilling services like cementing.

Administration officials said they were reviewing violations of the Clean Water Act, which carries criminal and civil penalties and fines; the Oil Pollution Act of 1990, which can be used to hold parties responsible for cleanup costs; the Migratory Bird Treaty Act and the Endangered Species Act, which provide penalties for injury and death of wildlife.

In addition to its inability to stop the oil from gushing into the the Gulf, some of BP’s comments have not helped it to garner public sympathy. When reports recently surfaced that cleanup workers were experiencing nosebleeds, headaches, nausea, vomiting and shortness of breath – symptoms that are evidently similar to exposure to the chemical dispersant that BP is using – BP CEO Tony Hayward dismissed the illness as food poisoning. Food poisoning experts have disagreed with Hayward’s assessment and have pointed to a lack of proper safety equipment.

“These do not sound like the symptoms my clients typically suffer, ” said nationally-known food safety attorney Bill Marler. “It’s not that I wouldn’t mind suing BP.”

Of greater concern perhaps is the long-term environmental and economic impact this disaster will have. Although the outcome is still unknown, it is almost certain to be devastating. For businesses in the Gulf area it will be important to understand their insurance coverage . To that end, be sure to check out Anderson Kill & Olick’s latest online Fine Print column in Risk Management magazine. Originally the subject of an AKO Policyholder Alert, the article discusses the policies that could be in play for your company.

The massive losses are covered by a variety of insurance policies already purchased by those being harmed. First party property and business interruption (BI) insurance certainly will provide coverage for certain losses. Liability insurance, both general liability and pollution liability policies, will provide defense and indemnity for lawsuits. Directors and officers insurance also will provide coverage for derivative lawsuits against directors and officers.

Be sure to check it out and stay tuned to the Risk Management Monitor for more updates.