1. UNDERSTANDING INSURANCE: Risk Management in a High-Risk Environment
David E. Wood

2. Why risk management is important
Effective risk management protects the back end of every initiative
Enterprise risk is an unexpressed liability on the balance sheet

3. Why risk management is important
Risk is managed in two ways:
Improve/maintain internal controls
Transfer off the balance sheet by purchasing insurance

4. How to become an effective advisor
Understand the risks faced by the enterprise
Know the available policies & concepts
Learn how to evaluate a claim
Be the resident expert on insurance to whom management and the Board turn in a crisis

5. Understand enterprise risk
Risk identification vocabulary
Business vs. enterprise risk
Property/casualty risk vs. inherent risk
Role of Risk Manager
Checklist of senior management and Board worries

6. Understand enterprise risk
Checklist of senior management and Board worries
Barbarians at the gate (mass tort, class litigation)
Rogue officer/business unit
Unhappy shareholders/markets
Exposure of personal assets

7. Know the concepts Policy types: First vs. third party policies
Loss vs. liability policies
Primary vs. excess policies

8. Know the concepts Basic coverage duties: Duty to defend
Duty to pay on behalf of
Duty to indemnify
Duty to settle

9. Know the concepts SIR vs. deductible: SIR is a condition to coverage
Retained amount
Self-insured vs. uninsured

10. Know the concepts Defense inside vs. outside limits
Inside: defense shares limits with other losses
Outside: unlimited defense

11. Know the concepts Voluntary payments/consent
Duty to defend: can’t admit liability or default
Reimbursement: need carrier consent for
Choice of counsel and experts
Incurring defense costs
Settlement
Waived when carrier breaches duty to defend

12. Know the concepts Allocation Hidden exclusion
Relative exposure vs. larger settlement rule
Contractual: avoid discretionary allocation

13. Know the concepts Bad faith
Unreasonable vs. intentionally wrongful claim-handling
Recovery of attorneys’ fees
Common law vs. statutory
Punitive damages

14. Know the policies Property: loss due to covered peril
CGL: BI/PD liability
D&O: management liability
E&O: EPLI, cyber liability, corporate malpractice
Crime: employee infidelity, cyber loss

15. Know how to read the policies
Anatomy of an insurance policy:
Declarations
Coverage grant
Exclusions & conditions
Endorsements
ISO vs. manuscripted forms [specimens]

16. Learn how to evaluate a claim
Worksheet: liability claim
Tender & notice
Economic or non-economic damages
Duty to defend
R/R’s, independent counsel
Excess-of-limits liability exposure

17. Learn how to evaluate a claim
How the carrier makes decisions:
Order policy, acknowledge claim, set reserve
Generate a R/R’s:
Review and summarize the claim
Add policy language from file
Add analysis and conclusions
Get a coverage opinion
Report to manager or committee

18. Learn how to evaluate a claim
3. Watch for red flags:
Wrong policy form
New line of business
Underwriter disappears
Unresponsive/junior adjuster
Claim adjusted by coverage counsel
Coverage litigation defended by coverage counsel

19. Become the expert
Ask for a seat at the table re policy placement & renewal
Use the broker as an information source
Ask for the job of reviewing suits and claims
Propose risk management controls

20. Become the expert In a crisis, be ready for client questions:
What does a reservation of rights mean?
Do we get to choose our defense lawyers?
We paid our premiums; why isn’t the carrier paying?
What are our options if the carrier doesn’t do what we want?

21. How to get promoted Business risk: Your client’s language
Enterprise risk: Your client’s blind spot?
Be the go-to resource: A little knowledge goes a long way