Category: Latest Thinking

BY TAYLER LINDEMAN, ARM, & MICHELE FIELDS, ESQ.

International insurance is inherently complex. Organizations must secure coverage that addresses the specific risks involved in their international operations while meeting the legal, regulatory and tax requirements of multiple countries. It typically requires placing an overarching controlled master program as well as local policies for specific countries.

Effectively meeting these demands depends on striking the right balance between scale and service. A broker must be able to handle diverse needs on a global scale while providing the right coverage and the right support for navigating claims and legal issues. A global brokerage that has the scale to offer coverages across the world may fall short of providing the high-touch service required in dealing with claims across continents and time zones.

Often, successfully balancing scale and service is best achieved with a customized approach to addressing all of the variables of international insurance coverage. Here are three key considerations when selecting the right international insurance broker.

1. Prioritize Deeper Relationships
A strategic partnership between client and broker is critical in building and maintaining effective international insurance coverage. When brokers have a more robust understanding of the client’s business and operations, including potential exposures and coverage structures, they can view international coverage in a broader context and more effectively advise the client. Building a deeper understanding also allows brokers to develop and place more customized international insurance policies specific to the organization’s risk, such as focusing on trips traveled versus covering locations around the globe. That deeper partnership promotes greater accountability and better performance that improves over the length of the broker / client relationship.

Large regional brokers typically have the size and scale to maintain strong relationships with partners and local brokers in other countries. These partnerships are often vital to ensuring the right level of coverage as well as navigating cultural barriers and language differences.

2. Identify Cost Efficiency Opportunities
The partnerships fostered by large regional brokers can drive significant cost efficiencies. Compared to a global broker with set networks and rigid pricing structures, a more agile regional broker has the ability to use other partners to create a customized network that better fits the service needs of the client. For example, it is not always necessary to involve a local broker in a foreign country. Regardless of the particular requirements, a global brokerage likely has local broker services in most areas and passes the costs of those partnerships on to clients. A regional broker, on the other hand, involves partners because it benefits the client, not the broker’s bottom line.

3. Focus on Claims and Legal Advocacy Abroad
There is no guarantee that an international claim will happen during domestic business hours. Consequently, deeper relationships, on the claims side, translate into better service when needed – at all times of the day. The Conner Strong & Buckelew claims team, for example, partners with a global law firm, based out of London, which can efficiently provide referrals to local legal resources in several countries. The result is fast action without sacrificing service. Thus, clients remain connected with the claims professionals, whom they know and trust, and these professionals are at the forefront of helping their clients navigate through a country’s legal process, as well as any language or cultural barriers. Such effective claims service provides clients with the necessary resources and peace of mind, knowing that they have the right partners in place no matter where the incident occurs

Realizing the Benefits of the Right Broker
In the end, when it comes to international insurance, large regional brokers provide the right balance of global scale, product flexibility and customization. Finding the right broker can also offer significant cost savings when securing coverage across international borders.

Case Study – Coordinating an International Claim in Under 12 Hours
An Eastern European subsidiary of a U.S.-domiciled company reported the death of a local employee on the subsidiary’s premises. The local police authorities, as well as the country’s OSHA equivalent, commenced simultaneous investigations. The organization’s first call was to its insurance broker, Conner Strong & Buckelew. Within five hours, the broker had a referral for local counsel in the relevant country. Approximately eight hours after notification, the broker and local counsel were on the phone discussing key information about the incident, the specific legal process and the investigations. Within twelve hours, the client received detailed information about that country’s legal process, the next steps and contact information for a local legal expert. As a result, the client was provided with expert guidance in real time and they were able to focus on proactively managing the tragic incident.

BY NATHALIE SMYTH, DANIEL BRETTLER, MICHELE FIELDS, AND CAMILLE HEPSWORTH

The landscape of clinical trials is evolving at an unprecedented pace, being both propelled and incentivized by the global race to advance the COVID-19 vaccines. Advancements in artificial intelligence (AI) and machine learning (ML) for data collection and interpretation, and a move towards virtual and adaptive trials and use of Real World Data (RWD), have paved the way for the development of novel data collection techniques and analysis.
Alongside such advancements is the ever-present threat of cyber-attacks and malicious hacking of private medical data as well as new potential liability risks associated with novel trial techniques and reliance on AI for decision-making. Increased flexibility and diversity of trial designs also come with the need for clarity of protocol and patient consent wording in addition to a good understanding of local coverage and liability issues in developing countries. Last, but not least, the expected roll-out of a worldwide vaccine at an unprecedented rate will necessitate careful consideration of policy wording encompassing all risks pertaining to the entire life cycle of medical products, including their development, manufacture, storage, transportation and beyond.

In this article, Conner Strong & Buckelew and Kennedys Law LLP explore current and potential future trends and liabilities in clinical trials alongside insurance considerations for key players in the life sciences market, including:

• AI and ML for Data Collection and Interpretation
• Novel Trial Designs
• Fast Tracking and Supply of Vaccines
• A Move Towards Diversity in Clinical Trials
• Looking forward

AI and ML for Data Collection and Interpretation
AI and ML tools are already being used to review thousands of study protocols and trial results and to provide automated advice during development of trial protocols, with the ultimate goal being the first machine-drafted protocol.

While there is currently limited use of the decision-making capabilities of AI to interpret clinical data, real advancements are being made in the use of AI and ML-based platforms and apps to assist with various clinical trial procedures. These include enrollment of trial subjects, confirmation of medication ingestion, facilitation of electronic clinical outcome assessment (eCOA) technology towards a more patient-centered approach to trial design and administration, and integration of data into a centralized platform to expedite analysis.

As the use of this technology develops, it is imperative that trial sponsors have adequate insurance in place to cover the potential new exposures they may bring. This includes consideration of whether and to what extent additional coverage is required in respect of potential cyber-attacks leading to unauthorized access to patient data and other GDPR breaches. Manufacturers and trial sponsors should also ensure that existing levels of coverage for professional, general and directors and officers (D&O) liabilities remain adequate, particularly when their duties and responsibilities may be linked to reliance upon AI and ML for decision-making.

Novel Trial Designs
Numerous manufacturers and trial sponsors are already spearheading several novel trial techniques, utilizing virtual and adaptive trial design and Real World Data (RWD)1.

Virtual clinical trials

While virtual trials have been feasible for a number of years, the impact of COVID-19 has pushed trial sponsors to quickly adjust their existing practices in favor of remote monitoring and data collection through the use of apps, electronic monitoring devices and online social engagement platforms.

For instance, in March 2020, J&J launched its first fully virtual trial (the Heartline trial) which explores whether its Heart Healthy app, paired with the Apple Watch’s Irregular Rhythm Notification (IRN) and electrocardiogram (ECG) apps, can help reduce the risk of stroke. The new virtual model means that people can participate remotely throughout the study without having to travel to research sites.

Similarly to AI and ML, virtual monitoring and use of apps and monitoring devices create a new area of potential exposure related to breach of private information, malicious hacking to disrupt or steal information, and potential bodily injury exposure if the monitoring device fails. As traditional insurance for clinical trials may not cover such exposures, detailed reviews of existing liability and cyber privacy insurance wordings should be carried out.

Move towards adaptive clinical trials

Clinical trials have traditionally taken the form of Randomized Controlled Trials (RCTs)2. However, there has been a recent move towards a more bespoke or ‘adaptive’ trial structure, which allows for prospective modifications to trial design based on accumulated trial data. For example, if one treatment is seen to perform better than others, the adaptive design would allow patients to be allocated to the better performing treatment during the trial period.

A move to more bespoke trial designs can provide huge benefits for both the patient and the manufacturer in terms of efficiency, ethicality, cost and time savings, improvement of patient outcomes and potentially the use of fewer participants.

There is also significant potential for a reduced timescale to obtain regulatory approval. This is demonstrated by the emergence of Real Time Oncology Review (RTOR) in 2018, which allows regulators to review data prior to the full application for regulatory approval with a view to reducing approval time from 6-10 months to under 6 months without compromising the safety and efficacy of the treatment. While this pilot program only considers applications for cancer drugs, if successful, it could extend to real-time review of drug applications for other disease groups.

As adaptive trials become more prominent, insurers and trial sponsors should also be aware of the potential exposure created by the more flexible design and the corresponding protocol and informed consent language. In particular, the underwriting of clinical liability insurance places a significant emphasis on the patients’ ability to understand the protocol. Therefore, wording must be clear and comprehensive, yet sufficiently simplified, for a non-health care professional or scientist to understand.

A growing reliance on Real World Data (RWD)

RWD is used at each stage of the drug development process to analyze the potential benefits or risks of a product or treatment, which, in turn, enables pharmaceutical companies to minimize risk and invest in only the most promising treatments.

While RWD is not a replacement for RCTs, it can supplement and augment analysis of data on the safety and efficacy of treatments over a longer period of time for a larger section of the patient population with a particular disease. Indeed, only last year, the FDA approved Pfizer’s Ibrance, which was the first drug where analysis was largely based on RWD from clinical registries.

The use of RWD (and emergence of technologies to capture it) could readily be the answer to the rising risks and costs of clinical trials, particularly in the study of rare diseases, or where there are difficulties with recruitment or funding of a full-scale RCT.

However, the implementation of new design methods based on RWD, especially those adopted mid-trial, may bring with it new additional focus on shareholder disclosure and potential litigation from a D&O’s liability perspective. For instance, if the sponsor company’s shares experience a drop in price due to negative clinical trial results, shareholders and their counsel will closely scrutinize all public statements made by the company before, during and after the clinical trial in order to assess their validity and accuracy, particularly regarding the reasons for any design changes made during the trial period. It is therefore important for insureds to ensure their coverage adapts sufficiently.

Fast Tracking and Supply of Vaccines
AI and ML will undoubtedly play an important role in the fast-tracking of future vaccines and other treatments through the regulatory process and onto the market. Indeed, AI-powered tools have already been utilized to expedite the search for potential COVID-19 treatments and vaccines by combing through thousands of studies for relevant information. The results allow researchers and policymakers to readily identify the most promising studies and to make faster and better decisions about prioritizing time and funding.

In particular, AI and ML could play an important role in Phase Three testing, which typically involves the evaluation of the risks and benefits of a medication over a large number of participants. Specifically, apps can be utilized by trial subjects to report side effects, with the data being analyzed by a centralized data system.

Again, it is important to properly insure against the risks of privacy and cyber breaches associated with the use of apps and e-technology to collect and share sensitive information, in addition to closely examining the possible implications of over-reliance on AI data for decision making.

Further, and in anticipation of the large-scale roll-out of regulatory-approved COVID-19 vaccines, manufacturers need to carefully consider whether and to what extent they bear the risk of loss of vaccines that have been stockpiled into the supply chain and the valuation of such risk. This is an exposure, which is often overlooked, although supply chain insurance for property perils and potential spoilage arising out of a change in controlled environment or condemnation is available.

A Move Towards Diversity in Clinical Trials
There has been a recent trend towards the relocation of clinical trials to less developed countries. While this has obvious benefits to manufacturers, sponsors and their insurers in terms of lower litigation risk, the importance of conducting trials in less developed countries should not be underestimated.

Africa’s virtual absence from the clinical trials map (impeded by limited infrastructure, low visibility of existing sites and unpredictable regulatory timelines) is problematic. Many potential trial subjects have had no previous exposure to pharmaceutical drugs and a number of diseases (particularly tropical) are endemic to the continent.

Africa boasts an unrivaled amount of genetic diversity, which, if not well-represented in trials, will not feed through to study findings and their generalized application to large populations. The promotion of such trials in less developed countries could therefore be the key to unlocking the potential for more diversified clinical trials going forward.

As sponsors consider studies in less developed countries, it is important to be aware that local insurance infrastructure and regulations therein are still developing. While many insurance regulations require that a local admitted insurance policy is purchased by the sponsor, these will not be as ‘well-tested’ as those in developed countries and sponsors will need to ensure that they strictly conform to local requirements and customs.

Even where local admitted coverage is not required, there may still be very strict requirements for sponsors to pay extensive damages to patients, their families and dependents, regardless of negligence. It is therefore important for brokers and insurers to have an in-depth understanding of what coverage is available in these emergent jurisdictions and under what circumstances it may be triggered, particularly as the policy may not cover certain heads of loss.

Looking forward
There is most certainly a place for new technologies in the clinical trial process, which will require detailed collaboration and an openness between manufacturers, trial sponsors and regulators to produce adequate guidance and a framework for the possibilities of AI and ML to be fully realized.

It is also hoped that the increased flexibility and diversity in trial designs and use of RWD, alongside lessons to be learned from the development of a COVID-19 vaccine, will lead to more efficient trials and development of medicinal products, with reduced risk, timescale and costs for all involved.

1 RWD is the collection of information pertaining to a patient’s health status and medical history from a variety of sources such as electronic medical records, insurance claims, disease or product registries, and mobile health apps.
2 A Randomized Controlled Trial (RCT) is a type of study in which treatment is compared in two or more randomized groups of people against a control group.

In our latest ebook, we break down the essentials of HR Communications 2.0. We detail how employers and benefits administrators can deliver essential benefits and health and wellness information for members in a post-COVID-19 world.

You will learn:
• The COVID-19 Pandemic’s Impact on Coverage Selections
• What Employees Want to Know about their Benefits Packages
• The Key Components of a Virtual Communications Toolkit
• Virtual Open Enrollment Best Practices
• Must-haves for a Virtual Benefits Portal
• Communicating Benefits Through Virtual Flip Books
• Effectively Delivering Ongoing Employee Health and Wellness Information
• Identifying the Right Virtual Employee Benefits Partner

Please fill out the form below to download the free resource about employee benefits in a virtual world.

By Terry Tracy

Even before the coronavirus pandemic, the commercial P&C marketplace was hardening. Early indications are showing the pandemic has exasperated the situation.

Already, we’re beginning to see insurance carriers increase prices, restrict coverage, cut back on capacity and exercise greater underwriting discipline. These forces are making it more difficult for businesses to purchase the coverage they need.

As the COVID-19 pandemic continues to increase losses among carriers, this hard market is likely to persist and rate increases are likely to continue. This is unfortunate for many companies that are already under financial pressure from the pandemic.

Securing adequate coverage at an affordable rate for insurance renewals will likely present challenges for many companies. Therefore, companies are wise to begin this process early by consulting with their brokers far in advance of a policy’s renewal date. Brokers with strong carrier relationships, experience navigating hard markets and knowledgeable account executives, claims consultants and risk control professionals can help companies lock down the coverage terms and conditions they need during this critical time.

Trends businesses should know prior to submitting claims

By Terry Tracy

With the initial surge of COVID-19 cases now in the rearview mirror and cases rising in many states yet again, many businesses across the U.S. are beginning to assess the damages they’ve incurred and the potential risks that remain as the pandemic rages on in many parts of the country.

When the pandemic first hit, companies experienced losses and damages on all sides. Many were forced to completely close their doors when lockdown orders went into effect. Others experienced cybersecurity events when entire workforces suddenly began working from home.

Businesses that have reopened or remained open through the pandemic are also dealing with liabilities resulting from employees getting sick. Unfortunately, mass layoffs are a reality for many companies as well, which opens up executive teams to additional scrutiny.

All in all, many businesses are wondering: does our P&C insurance policy cover coronavirus losses? The answer is complicated and dependent on your policy and the type of insurance you carry. However, the trends in claims handling related to coronavirus recovery are taking shape, offering organizations a better idea of what to expect and what steps to take.

Property coverage
When businesses shut down and lost revenue, many looked to their property coverage and business interruption coverage for economic relief. For the most part, carriers are rejecting these initial claims.

Commercial property & casualty insurance carriers argue that a shutdown imposed by the government does not constitute property damage and point to virus exclusions written into many policies. Other carriers are responding with requests for information (RFI) before denying a claim outright. Businesses are wise to respond to these RFIs and work with carriers as cooperatively as they can.

To date, there have been over 700 cases filed across the U.S., some of which include attempts to become a class action or a multi-state litigation (click here for a tracker created by UPenn law school). Similarly, insureds have sought relief in many other countries, including the U.K., South Africa and France.

To date, three courts have ruled in favor of the insurance carriers. First, the U.S. District Court in the Southern District of New York held that the insurer did not owe coverage and that there was no “property damage.” This case is currently on appeal. Second, a Circuit Court in Michigan held that there was no “property damage” and that the virus exclusion was applicable and enforceable. Third, a Washington D.C. judge ruled that the civil shutdown related to COVID-19 does not constitute “direct physical loss.” One court in Missouri has ruled in favor of the insured and permitted them to pursue a COVID-19 related property claim.

Insureds have had more success abroad than in the U.S. as it appears the language of the policy may not have the same triggering requirement. In Paris, a court ordered an insurance carrier to pay business interruption for two months to a restaurateur. The exact policy language has not been publicly distributed, but the carrier has publicly stated that only 10 percent of its clients had this unique language that granted coverage. It has vowed to pay these losses and avowed any further losses. Similarly, the high court of Cape Town in South Africa ruled in favor of a restaurant and held that coverage was triggered under the Infectious Disease Extension. Click here for a copy of the case.

The financial regulator in the U.K. is relying on the foregoing cases in arguing for coverage in an action it filed against several carriers. There have been no rulings in these proceedings but many in the industry are closely watching for the outcome.

General liability coverage
When a customer alleges that a place of business led to their exposure to the coronavirus, companies are hoping their general liability insurance will cover the legal expenses associated with mounting a defense or paying potential settlements. So far, the market has not seen many claims of this nature. But as businesses continue to reopen, it is possible more companies may find themselves in a lawsuit.

Companies who face allegations against them should notify their general liability insurance carrier. However, similar to property coverage, some carriers have written virus exclusions into their liability policies and will likely use these clauses to reject claims.

Instead of leaning on just their liability insurance, companies should consider working with their risk management and legal teams to take a more proactive approach to reducing their exposure. Some companies are having customers sign waivers that release the company from any liability and are making adjustments to their storefronts and business models to keep individuals safe. In addition, many states are enacting legal protections for businesses who follow certain established protocols and discussions around protections at the federal level have been ongoing.

For more information on what businesses can do to protect their employees, customers and business interests during the return-to-work period, click here.

Executive risk coverage (including D&O Employment Practices Liability coverage)
Unfortunately, many companies reeling financially from the effects of the pandemic are making layoffs. Business owners and executive teams making these decisions are potentially exposed to litigation from former employees, especially if these individuals were laid off for discretionary reasons. Any company making layoffs should consult its insurance brokers and examine its employment practices liability coverage to determine whether they should report facts and circumstances to their carriers to avoid loss of coverage.

The market has also experienced a rise in directors and officers (D&O) claims as a result of the pandemic. Some involve exposure to COVID-19, some involve misrepresentations about a company’s ability to gain from the pandemic and some involve companies that have experienced financial issues or operation disruptions. Each of these losses should be reported to the D&O policy and, depending on the provisions, may trigger coverage.

Companies may also seek financial relief from their D&O policy if they are audited by a regulatory agency over their use of government bailout funds, like the payment protection program. Typically, a D&O policy will not respond to an “audit,” but may respond to a formal investigation depending on the policy provisions.

Cybersecurity coverage
When entire companies quickly pivoted to remote work, many for the first time, it exposed businesses to various levels of cybersecurity liabilities. The FBI even warned about hackers using pandemic-related phishing scams and malware in an attempt to extract sensitive information from employees.

While carriers are not yet seeing a meaningful uptick in cybersecurity claims, now is a good time for companies to revisit their cybersecurity procedures and protocols to protect their businesses. Company-wide policies, like migrating to dual authentication on all devices, are critical to limiting liability as more employees work remotely.

Workers’ compensation
Workers’ compensation has been an area of a great deal of discussion at the state level. At the outset of the pandemic, claims adjusters were evaluating under applicable state law on whether the injury was compensable. In general, this required a nexus to the workplace that was unique to the work being performed. For example, if an employee works in an emergency room at a hospital and came in contact with a patient with COVID-19, the claim would most likely be compensable. However, if the employee works in an office, it is unlikely the claim will be compensable.

Some states changed the legal standard and created presumptions of compensability based on the type of employee. Due to some of the uncertainty and the ever-changing landscape as employers continue to reopen, if an employee alleges that they contracted COVID-19 at the workplace, it is best to report it and allow an experienced adjuster to determine compensability.

Experienced claims handlers
Now more than ever, businesses should revisit their insurance and risk management policies and work with a broker that has close relationships with carriers and extensive claims handling and risk control experience. At Conner Strong & Buckelew, nearly a quarter of our staff are claims handlers and risk control professionals with decades of experience working with clients to produce positive outcomes. Given the complexity of the pandemic, these claims are complex, and it is important for any business filing a claim to bring these professionals into the process early on to help fight for the best result.

This piece originally ran in the Insurance Journal.

The COVID-19 pandemic has created challenges for many businesses across the globe, including the insurance industry. But so far, the insurance broker merger and acquisition (M&A) market has remained active even as the pandemic continues to unfold.

Before the pandemic, both property and casualty and employee benefits insurance brokerages and agencies emerged as prime acquisition targets for a multitude of different buyers. These insurance agencies have experienced steady growth over the past several years. Rising demand for insurance coverage in a hardening market has resulted in growing insurance premiums. Considering most brokerages make their revenue from commissions, these rising premiums have positively impacted brokers’ bottom lines.

These dynamics caught the attention of both strategic and financial buyers looking to acquire businesses with strong cash flows and solid fundamentals. Because of this, competition for deals intensified over the last two to three years and agency valuations have also increased significantly. However, the pandemic has introduced some uncertainty into the market. Some brokers’ clients may have business continuity issues and may not survive the pandemic, which could hurt the broker’s valuation and attractiveness to a buyer. Because of this, valuations and multiples may flatten or drop slightly in the near term.

While it is still early to tell exactly how the pandemic will affect long-term demand for insurance broker and agency merger and acquisitions, the market for deals remains relatively active. As we move forward, there are several trends likely to affect merger & acquisition opportunities throughout 2020 and beyond. Here are a few dynamics to look out for in the months ahead:

1. High volume of transactions

The number of transactions taking place in the brokerage sector is charting an upward trajectory. In fact, the total number of deals in the insurance brokerage space hit an all-time high in 2019 with 649 total transactions, up from 643 in 2018, according to Optis Partners LLC. This trend is likely to continue in the face of the novel coronavirus. It is even possible that the number of transactions will accelerate selling agencies’ plans to pursue a deal given the need for diversification and scale as macroeconomic conditions begin to change.

2. Emergence of Private Equity Buyers

One major driver of broker and agency M&A activity in recent years has been the emergence of private equity buyers in the market. According to the Optis Partners report, brokers owned by private equity firms or with some form of significant outside capital support were by far the most active buyers of insurance brokerages in 2019. These companies represented roughly 66% of all buyers last year. Looking ahead, the COVID-19 outbreak may decelerate the number of discussions taking place in the market in the near term.

However, private equity firms are still expected to be active buyers of insurance brokers in 2020. With that in mind, sellers must take note: private equity firms may have the capital needed to fund a transaction. But they may not be able to provide the structure, resources, technology, industry relationships and expertise that a broker with decades of experience in the industry can.

3. Growth of Overall M&A Activity

The merger and acquisition trend is not limited to the insurance brokerage industry. According to Deloitte, more than $10 trillion in transactions have been announced across all industries in the U.S. since 2013. Even amid a pandemic, many expect total deal volume to continue rising across the United States in 2020. This trend can present challenges for the insurance brokerage industry. Brokers can lose customers when those customers merge with another company that does business with a different broker.

Insurance brokers are also facing pressure in the fight for talent. As companies grow and can offer employees more resources, it makes it difficult for smaller, middle market brokers to retain the talent they’ve spent years training and developing. For these reasons, many insurance brokers will continue considering a sale of their business in order to receive the benefits of scale needed to stay competitive.

Building a Plan for the Future

As the amount of M&A activity continues to increase, brokers of all sizes must begin to think about formalizing their strategy. The economic uncertainty caused by the pandemic may begin to apply pressure to a broker’s valuation, and many business owners considering a sale should begin to think about their options. Larger, well-established brokers that can offer technology, expertise, and benefits of scale are the buyers behind many transactions. Now is a good time for smaller brokers to sell and reap these benefits.

Before doing so, brokers should first focus on finding the right cultural fit. For two businesses to integrate smoothly, a business owner must be sure their processes, procedures, and way of doing business align with the buyer’s.

Brokers should also consider hiring an advisor. These individuals are well-versed in the insurance M&A marketplace and can guide business owners through the process. From start to finish, it may take a broker two to three years to find a buyer and finalize a transaction. A lot can change in that time, and advisors can help shorten and streamline this process.

Ultimately, brokers should partner with a company that will be able to provide them with the resources and support that enable them to grow and thrive in an evolving insurance landscape. Right now, these buyers are in ample supply and have the capital required to make a deal. It all starts with a conversation.

The Food and Drug Administration (FDA) recently overhauled the rules and regulations surrounding the production of safe food and ingredients. Now, food processors are facing more operational and regulatory risk than ever before.

For food processors, staying compliant with food safety regulations is crucial.

In this e-book, you will learn about:

• Key components of FDA food regulations
• The impact of regulatory enforcement
• The food business insurance landscape
• What insurance food processors must have
• The benefits of a food liability insurance program
• How knowledgeable insurance brokers can help

Please fill out the form below to download the free resource about the regulation of food processors.

By Monica Attanasi-Schultz and Colleen Vallen 

Documenting and preparing an insurance claim as a result of a loss event is often disruptive, complicated and time consuming. For an insured, the claims process can be a drain on resources during  time when normal business operations should be the primary focus of management. To minimize the  impact of the claims process, an insured is well served by the early establishment of a team of experts, including forensic accountants and industry professionals, to assist in the claims process. A knowledgeable broker can facilitate the building and management of the expert team on the insured’s behalf. The broker and the expert team will work to expedite the settlement of the claim and minimize the disruption to the insured. Establishing a team early allows management to focus on the business of its business.

The role of a forensic accountant in the claims process is an important one, and often a policy will provide the insured with coverage to hire one. A forensic accountant utilizes accounting, auditing and  investigative skills to analyze financial information and identify the financial impacts of a loss event. The forensic accountant will not only gather the financial documentation and conduct in-depth financial analyses and modeling to quantify the financial impact of the event on the insured, but will also work closely with the team in presenting this information to the insurance carrier and its experts.

When selecting a forensic accountant, there are several important considerations.

1. Experience in the Quantification of Insurance Claims

Forensic accountants have different credentials, specializations and experience. It is important when selecting a forensic accountant for insurance claim matters to understand the forensic accountant’s relevant experience.

When working on an insurance claim, an experienced forensic accountant understands the importance of linking the financial damages to the loss event. This requires an understanding of the insurance policies and their application as well as the ability to perform the necessary financial analysis and develop the appropriate models to accurately quantify the impact of the loss.

2. A Deep Understanding of a Client’s Business

An experienced forensic accountant has a client-centric approach. Insurance claims are unique, and no two organizations are alike. There’s not a one-size-fits-all solution for the forensic accounting work that goes into preparing a claim. An effective forensic accountant understands this and will take steps to develop a deeper understanding of the insured’s business as well as the financial impacts of the event.

To do this, a forensic accountant may employ a variety of activities including financial analysis, interviews and market/industry research. Through this process, the forensic accountant obtains an understanding of the financial trends, business history, future plans, the industry/market the insured operates in and any special circumstances that are important in analyzing the loss. This deeper understanding is tremendously valuable in helping to ascertain the true financial impact of the loss.

3. A Focus on Effective Communication

The ability to effectively communicate is a critical skill for a forensic accountant. The forensic accountant, as part of the insured’s claims team, has to be able to communicate regularly with management and other experts on the team. An effective forensic accountant will keep a channel for continuous interaction with the team to manage expectations, resolve issues as they arise, report on findings and ensure that efforts are not duplicative. Effective communication is important to keep the claim process moving and minimize the impact to management.

Communication is also essential in the presentation of findings. The financial analyses and modeling done by the forensic accountant are detailed and complex, and they tell a story. The ability to explain the analysis and findings in a clear concise manner, often to non-accountants, is essential to the claims resolution process. This focus on effective communication should not be limited to verbal communication, but should extend to any analyses and reports being prepared as well. A good forensic accountant understands the relationship between the narrative and the analysis and the importance of presentation.

Effective Claims Resolution with Forensic Accounting

While not every claim warrants a forensic accountant, for those that do, having an experienced forensic accountant on the team can reduce the burden on management related to claim preparation and assist in moving the matter toward settlement.

Click here for a printable download.

On this edition of HBS Legal Trends, Chris Grosso, Connor Strong, and Jeff Daitz, Hall Booth Smith, discussed how they use their respective expertise in insurance brokerage and employment law to help organizations limit potential claims exposure. Chris and Jeff discussed how they work together, the nature and severity of claims arising from the pandemic and a remote work environment, the value of employment practices audits, the application process for employment practices liability, and much more.

HBS Legal Trends is sponsored by Hall, Booth, Smith, PC and is produced by the North Fulton studio of Business RadioX®.

Click here to listen to the podcast.

NOTE: THE RESOURCES PROVIDED ON THIS PAGE SHOULD NOT BE INTERPRETED AS LEGAL ADVICE. IF YOU HAVE ANY QUESTIONS, PLEASE CONSULT YOUR LEGAL COUNSEL.

By Jim McGlynn, James Hanrahan & Lisa Vanore

Whether fighting a fire or dealing with difficult business situations, it is critical to have the right people on your side. Experience, know-how and a willingness to work through the challenges are key to achieving successful outcomes. As the property & casualty insurance market shifts to a hard market, insurance buyers should understand the new insurance playing field and critically evaluate their brokerage relationship to be certain that they have the right partner.

Simply stated, a hard insurance market is defined by continued high demand for insurance coverage with limited or reduced supply. The causes for the limited or reduced supply are manifold, but the net result is an upset from the status quo with insurance carriers focused on increasing rates, restricting coverage terms and conditions and possibly raising deductibles and retentions for the insured. Typically, underwriting authority is transitioned to the management level, competition among carriers is limited as insurance companies retrench on their existing business and insurance buyers find it more difficult to secure coverage at what they feel is a reasonable price.

Many related factors are driving the underwriting stringency in today’s property and casualty insurance market. Low interest rates in the bond market are weakening carriers’ investment returns, adding pressure to achieve underwriting profitability. Many carriers are pointing at a phenomenon called social inflation, which has led to increased litigation, plaintiff-friendly legal decisions and larger jury awards, all of which adversely impact underwriting performance. Finally, recent catastrophic events that resulted in massive insured losses, such as hurricanes Maria, Irma and Harvey, floods and California wildfires, collectively have lingering effects on insurance carriers’ balance sheets.

This hardening insurance market requires a more deliberate and detailed approach to securing coverage. Insurance brokers with a deep knowledge of the market and close carrier relationships are best suited to help navigate the process. Below are a few best practices in working with a broker to ensure the best outcome in today’s hardening market:

1. Anticipate Requests and Prepare Early

In a hard market, underwriters ask more questions, require more detailed information and spend more time reviewing submissions. Many carriers require the additional steps of performing their own risk control inspections and, often, in-person customer meetings. Given these additional requests for information and potential delays in coordinating customer underwriting meetings, insurance buyers are wise to begin gathering renewal data and reviewing prior insurance claims as early as is practicable.

Companies should also spend time analyzing and strengthening the efficacy of their risk control and safety programs, as well as identifying and addressing the key risk factors facing their business. Demonstrating robust safety protocols that differentiate the company from competitors will help the submission gain traction with the carrier. Now is also the time to analyze historical claims performance data and other underwriting information and develop the most effective way to communicate those results.

2. Facilitate Open Communication

Establishing open communication between insured, broker and carrier is crucial to securing optimal coverage in a hardening market. In order for the broker to represent the company accurately in the market, they must fully understand the company’s potential exposures, safety protocols and overall risk profile. This requires transparent conversations between the parties throughout the submission process.

An insured and their broker should collaborate closely in securing coverage. Typically, it is the insured’s responsibility to articulate their needs and exposures, while it’s the broker’s responsibility to discuss strategy and communicate with the carrier. However, as the hardening market drives more in-person sit downs between carriers and insureds, companies are increasingly required to tell their own story. These meetings are a good way for insureds to differentiate themselves, add a personal touch and demonstrate their engagement.

3. Build Out Comprehensive Submissions

Brokers can help insureds develop a final submission package that meets the onerous requirements of a hard market and stands out among the rest. Insureds should include every piece of information that could be of use to the carrier. In any absence of information, insurance underwriters sometimes assume the worst. Robust submissions take the guess work out of the equation and make underwriters’ jobs easier.

At Conner Strong & Buckelew, we emphasize first-class submissions because they create an impression on the underwriters and often establish a clear path from submission to coverage. Many insurance brokers shy away from the challenges that come with a hardening market. But a true business advocate will do everything in their power to understand the details of their customer and put forth the effort to create a comprehensive submission that secures the broadest insurance coverage possible at the most competitive rates in order to protect the insured’s bottom line.

4. Embrace a Little Creativity

When prices rise, insureds have an opportunity to evaluate new program structures and alternatives to traditional coverage such as self-insurance or captives. Brokers with relationships across the insurance industry can help companies get creative by engaging other carriers and investigating unique solutions that may not have been previously considered.

Conner Strong & Buckelew’s account management and in-house captives teams provide our clients with an edge in hard markets. In a captive, insureds create their own insurance companies, reducing their reliance on traditional insurance carriers. This approach can shield companies from market fluctuation and provide a level of independence in creating customized insurance programs to meet their risk financing needs. While not a solution for every company, captives can provide organizations with a number of benefits:

• greater control, flexibility and transparency into their program and claims
• more stable costs
• enhanced loss protection services

Brokers with a thorough understanding of the market and the intricacies of captives can help companies evaluate this option.

A Broker’s Added Value

In hard markets, the true value of an experienced insurance broker is revealed. Clearly it is important to work with the right broker to assist with the placement of coverage, but insureds should also look to partner with a broker that can offer services the insurance carriers might cut back on during difficult times. As insurance carriers focus on underwriting profits, their focus might shift away from risk control and safety services designed to mitigate risk, and claims handling may suffer if adjusters become inundated with claim files. Brokers like Conner Strong & Buckelew can pick up this slack by providing access to our own in-house risk and safety professionals and help insureds navigate the claims processes for any losses that do arise.

Hard markets present many challenges for businesses from increasing insurance costs to potential restrictions in coverage terms. The current COVID-19 outbreak places even more pressure on companies to make sure they are protected. To achieve the best outcome for your business, it is critical that companies have an experienced broker partner with the knowledge and resources available to do the necessary work on your behalf. A broker with strong market relationships and a creative strategy will go a long way to alleviate much of the strain associated with the uncertainty of the hard market.

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