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E&O Avoidance and Prevention

Cyber Risk & Insurance

Cyber Risk & Insurance

While cyber threats have been a concern for more than a decade, the last eighteen months have been marked by a number of large-scale cyber breaches. These breaches caused companies and insurers to expend considerable financial resources to recover from the breach and mend their damaged public images. As a result of the increase in cyber threats, public and private entities are scrambling to ensure the security of their systems and the information and data these systems store. As part of the risk management analysis presented by cyber threats, companies of all sizes are evaluating their existing insurance policies to understand what, if anything, traditional insurance policies will cover with respect to cyber claims. In most instances, obtaining additional
cyber coverage, either through special endorsement to existing policies or through a stand-alone cyber liability policy, is necessary.

Damian J. Arguello

Risk management & insurance thought leader & influencer, law professor, coverage counsel, & insurance expert witness.

Agents – Your E&O Coverage May Be For More Than You Think

Your responsibility to not breach your fiduciary duties to the principal (insurer) are a large part of your professional /ethical responsibilities and the reason for your E&O coverage as an insurance agent… and here you thought the Insurers demanded that you to carried E&O was only for the policyholde’s protection. 

A Review of the Modern Claims Made Form

“Since its creation, “claims made” wording’s use has expanded outside of the “profession” and professional liability realm, finding use in diverse liability coverages. But the roots of “claims made” wording, and its most common use still, is found in covering the exposures created by a “professional’s” activities. As seen by the list of true “professions,” professionals are individuals who provide a service to society which, if done poorly, could cause extreme or irreparable personal or financial harm. …

The expansion of claims made policy forms beyond “professions” caused the basic “claims made” concept to diverge and evolve into two distinct forms. One evolutionary branch commenced in professional liability coverages (known also as “errors and omissions” coverages in this series) and the second branch grew out of the financial services industry and the need for directors and officers liability protection, fiduciary liability and employment practices liability (referred throughout this series as “executive liability” coverages).

Although both branches attach to the tree at the same point; greatly different “claims made triggers” have resulted. Additionally, coverage terms, conditions and definitions differ between the two branches.”

The risks inherent in diminishing limit policies

“Diminishing limits policies create a host of potential problems for insurance company claim departments. As is well known the insurance industry has long been plagued with “nuisance” claims. While in some instances insurance companies make quick settlements of nuisance claims to avoid defense cost expenditures, in others, insurers will attempt to resist such claims to avoid setting a precedent, thereby sending a message to the plaintiff’s bar that nuisance claims will not be honored. Considering that defense costs are deducted from the policy’s aggregate limits, either course of action places an insurance company in a difficult position. … “

All should use greater care handling underwriting information

Insurers: To Rescind or Not to Rescind?

Olie R. Jolstad

Olie Jolstad is an insurance expert with over 40 years of professional insurance experience in commercial and personal lines insurance claims handling, coverage analysis, managing general agent, and agent/broker procurement of insurance. Mr. Jolstad holds the Senior Claims Law Associate (SCLA) designation, as well as being a Fellow in the American College of Forensic Examiners…

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