It’s All About Content
A more immersive reading experience? We’re glad you asked. A cleaner layout and typographic design keeps your focus on the content. The “infinite scroll,” simplified navigation and Google search make finding interesting articles easier. And no matter your screen size – PC, tablet or phone – the site is optimized to ensure the same great experience.
The benefits of the site are mostly self-evident. But a few features are worth highlighting to help get you started:
Current Section: Displays the issue, topic, author or section you are currently viewing.
Content Ribbon: Lists all of the articles in the current section. Easily browse the articles and click on any tile to load that article into the infinite scroll.
Infinite Scroll: Read each article from top to bottom without having to click to continue. The next article loads automatically so you can continuously read/browse an entire issue or section – similar to how you read a print magazine.
Full Screen: Click the arrow to hide the content ribbon and create a clutter-free article reading experience. Also handy for smaller screens or tablets.
More Ways to Explore
Nav Bar: Click the gray bar to reveal several filters, sections and topics that tailor articles to your interests.
Authors/Topics: Reading an article you like? Click on the author’s name to see all of their content or click on one of the topics to load that section.
Google Search: Still not finding what you want? The search bar slides out to help you find it.
Responsive Design (Mobile Optimized)
The site utilizes a responsive design. That means the layout automatically adjusts to different screen sizes. You can see the technology in action by adjusting the size of your browser window. It’s pretty cool.
But responsive design is more than just a neat trick. It ensures that our new site looks great and works well on all screen sizes. Call us a website or, if you like, a web app – the site combines the benefits of the free and open web with the elegance of an application.
More to Come
But we are not done yet. The site enables us to integrate new content types into our stories. Over the next year, you will see more charts, graphs, infographics, videos, photos, etc.
Be sure to sign-up for one of our newsletters to stay abreast of all these developments as well as the latest articles and content we publish.
In the meantime, we would love to hear your feedback about the new site or anything else we do. Write to us at firstname.lastname@example.org.
The Plague of Baltimore
Disclaimer: The events depicted in this scenario are fictitious. Any similarity to any corporation or person, living or dead, is merely coincidental.
A Disturbing Email
Carley Fitzpatrick flipped the line and the blueberry-colored, 7-inch, Texas-rigged rubber worm sank, almost motionless, next to the sunken tree that projected from the near bank of Lake Rita.
She inhaled and exhaled deeply, balancing herself on the wooden seat of the canoe. Must be calm, she reminded herself, must be very calm and settled to do this right.
Carley looked away from her target, to where the sun was banking down below the green crest of trees on the ridge above the lake.
She twitched her rod tip once; paused for several seconds and then twitched it again. Then came the long, strong pull that signified a largemouth bass had sucked in the artificial worm.
She hooked him, netted him, took a brief admiring glance and put him back in the water unharmed.
Paddling back to her SUV, Carley remembered that she wanted to check back in with the office before going home. As the COO of Blue Mountain Regional Medical Center in York County, she was a key player in the hospital group’s expansion plans, putting in extra hours as it built itself into a larger system.
With the outdoorsy Central Pennsylvania lifestyle as a draw, Blue Mountain was successful in drawing talent from Washington, D.C., Philadelphia, Baltimore and Harrisburg. Making the switch from freeways and subways to the countryside dotted with horse farms and wineries was not that hard a sell.
With health care reform on the march, there were a number of smaller, more urban practices that were more than willing to have their assets and liabilities acquired by a hospital system. Health care reform just created too many uncertainties.
Back at the office, Carley opened a disturbing email from the office of Blue Mountain’s general counsel.
The email said that 12 hospitalists in a Baltimore practice that Blue Mountain had acquired six months ago were now defendants in a class-action lawsuit stemming from a hospital-acquired infection outbreak at a Baltimore teaching hospital.
The outbreak had been dubbed “The Plague of Baltimore” by the local press.
“Sending this to you as an FYI, we’re not too concerned about it at this point,” Blue Mountain’s youngish general counsel had typed to Carley in the email.
“I’m not so sure that we shouldn’t be worried about it,” Carley said to herself under her breath as the sky outside her office window darkened into nightfall.
“Can you follow up with me on this or direct me to a copy of the lawsuit?” she wrote back to the general counsel.
Carley had been around long enough to know that Baltimore, along with some other East Coast cities like Philadelphia, fell into the category of legal venue where judge and jury verdicts in personal injury cases could balloon far beyond what might be considered reasonable reparation.
The general counsel may have been good on paper at Dickinson Law, but he just might have a lot left to learn here in the real world.
Carley made a mental note to keep the “Baltimore 12” on her radar.
Look Back in Anguish
With the fate of the “Baltimore 12” never leaving her consciousness for long, Carley called a meeting with Blue Mountain’s director of risk management and insurance, Nathan Haines.
“I just want to be sure,” she said, explaining why she was asking Nate to review with her, yet again, the hospital’s professional liability coverage.
“No problem,” Nate said.
“We’ve got a $5 million self-insured retention and a $10 million excess tower on top of that,” Nate said.
“Which means what again?” Carley said.
“Let’s just say one of our doctors gets sued for medical malpractice and the jury finds against him for $1 million,” Nate said. “We’re self-insured for $5 million, we pay that $1 million out of our pockets.”
“Okay,” Carley said. “But what if …”
Nate knew where she was going.
“If we saw a loss of $6 million,” he said, finishing her thought, “which would be highly unusual, we’d pay $5 million out of pocket and the insurance company would pay $1 million,” Nate said.
“Why so much retention?” said Carley.
“Eh, it’s kind of a balancing act,” said Nate. “You’re trying to offset premium costs by taking some of the risk on.”
“I’d hate to be a risk manager,” Carley said to herself as she left the meeting with Nate.
When the “Baltimore 12” case went to trial, the full brunt of what Blue Mountain was facing became more evident.
It turned out that two deaths were linked to the hospital infection outbreak in Baltimore. One of the fatalities was David Brandt, the COO of a well-capitalized, up-and-coming tech firm with naval engineering connections based in Annapolis. Brandt had gone into the Baltimore hospital for knee surgery and hadn’t come out.
The other victim was Anna French, a striking attorney and mother of three who underwent an emergency appendectomy, acquired an infection and died a lingering, painful death.
The framed photographic portrait of a smiling Anna with her equally photogenic husband and children taken on the oak-leaf-speckled lawn of their family home in October was all the jury needs to see.
Three jury members, two of them male, wept openly. The pain and suffering amount decided on was in the tens of millions.
The lifetime income loss of the deceased COO came in at the very high end as well. Aggregate pain and suffering and loss of income determination from the juries in those two cases alone totaled $45 million.
Woulda’, Coulda’, Shoulda’
When Blue Mountain acquired the assets and liabilities of the Baltimore 12, trout fishing and sipping Cabernet Franc next to the fields it was grown in weren’t the only draws.
To lure that talent, Blue Mountain had agreed to cover the physicians’ prior acts as part of their employment benefits.
Talking to Nathan Haines, Carley got yet another insurance lesson.
“We’ve got $20 million in liability in connection with these 12 hospitalists from Baltimore,” Nathan told Carley and the CFO, Fred Rutter, in a closed door meeting on a cold January morning.
“That’s pain and suffering, loss of income and attorneys’ fees,” Nathan said.
The room was silent for a minute.
“What about an appeal?” Fred said just to say something.
“From what the attorneys for the carrier tell us, that would be throwing good money after bad,” Nathan replied.
“Should I go on?”
“Sure,” Fred said.
“The physicians are covered under our limits,” Nathan said. “When we hired them, we didn’t negotiate the option that they have individual limits, so their liabilities hit our entire program,” Nathan said.
“Which means?” said Carley.
“Which means that we are looking at $10 million in uncovered liability, with the carrier picking up the other $10 million,” Nathan said.
In the months after that conversation, Blue Mountain Regional Medical Center went from an organization that was expanding and pervaded by a sense of optimism to an organization in retreat.
The aftermath of the “Baltimore 12” jury verdict was that Blue Mountain was going to have to scrap to find a professional liability insurance carrier for the coming year. It was also going to have to take an even higher retention than it had previously.
It was also looking at its additional newly acquired practices with a jaundiced eye.
Attempts to renegotiate professional liability indemnity arrangements after the fact were, to say the least, a point of contention with the doctors’ groups.
As she drove to work one morning the following May, Carley cast a doleful eye out the window to Lake Rita.
She would have liked to be jigging for crappies on the lake, instead of putting in her seventh straight 11-hour day.
The future of Blue Mountain Regional was highly uncertain, having looked so bright just a year or so ago.
“Maybe I should start looking for a job in Baltimore,” Carley said to herself as she drove into the parking lot at work.
A hospital group seeks to grow by attracting medical practices from around the Middle Atlantic region. But its plans backfire when its insurance coverage is misaligned with the professional liability exposures that some of the acquired physicians bring into the company.
1. Know what you are buying: The Blue Mountain Regional Medical Center erred by not fully understanding the professional liability risks carried by the physicians in the practices it was acquiring.
2. Tailor your coverage: As a hospital group looking to expand by acquiring regional practices, Blue Mountain needed to tailor its coverage to better mitigate potential professional liability risks that were being brought on board. Covering all prior acts with no individual limits was clearly not the way to go here.
3. Risk management needs to drive the bus: Blue Mountain clearly did not have risk management integrated into its acquisition and growth strategies. Risk management should have had more of a voice in what coverage physicians were being offered as a part of their benefits packages.
4. Know your legal venues: The risk to the hospital group in this scenario was compounded by the legal venue the professional liability was being adjudicated in. Professionals being brought in from a legal venue that has a reputation for outsized settlements should be examined with extra care.
5. Beware of the unknowns: The Affordable Care Act has placed health care risk management in flux like never before. Any growth or profit strategy that does not take this vast uncertainty into account is in all likelihood a flawed strategy.
Passion for the Prize
In his 1990 book, The Prize: The Epic Quest for Oil, Money and Power, Pulitzer Prize winning author Daniel Yergin documented the passion that drove oil exploration from the first oil well sunk in Titusville, Penn. by Col. Edwin Drake in 1859, to the multinational crusades that enriched Saudi Arabia 100 years later.
Even with the recent decline in crude oil prices, the quest for oil and its sister substance, natural gas, is as fevered now as it was in 1859.
While lower product prices are causing some upstream oil and gas companies to cut back on exploration and production, they create opportunities for others. In fact, for many midstream oil and gas companies, lower prices create an opportunity to buy low, store product, and then sell high when the crude and gas markets rebound.
The current record supply of domestic crude oil and gas largely results from horizontal drilling and hydraulic fracturing methods, which make it practical to extract product in formerly played-out or untapped formations, from the Panhandle to the Bakken.
But these technologies — and the current market they helped create — require underwriters that are as passionate, committed and knowledgeable about energy risk as the oil and gas explorers they insure.
Liability fears and incessant press coverage — from the Denton fracking ban to the Heckmann verdict — may cause some underwriters to regard fracking and horizontal drilling with a suppressed appetite. Other carriers, keen to generate premium revenue despite their limited industry knowledge, may try to buy their way into this high-stakes game with soft pricing.
For Matt Waters, the chief underwriting officer of Liberty Mutual Commercial Insurance Specialty – Energy, this is the time to employ a deep underwriting expertise to embrace the current energy market and extraction methods responsibly and profitably.
“In the oil and gas business right now, you have to have risk solutions for the new market, fracking and horizontal drilling, and it can’t be avoidance,” Waters said.
Matt Waters, chief underwriting officer of Liberty Mutual Commercial Insurance Specialty – Energy, reviews some risk management best practices for fracking and horizontal drilling.
Waters’ group underwrites upstream energy risks — those involved in all phases of onshore exploration and production of crude oil and natural gas from wells sunk into the earth — and midstream energy risks, those that involve the distribution or transportation of oil and gas to processing plants, refineries and consumers.
Risk in Motion
Seven to eight years ago, the technologies to horizontally drill and use fluids to fracture shale formations were barely in play. Now they are well established and have changed the domestic energy market, and consequently risk management for energy companies.
One of those changes is in the area of commercial auto and related coverages.
Fracking and horizontal drilling have dramatically altered oil and gas production, significantly increasing the number of vehicle trips to production and exploration sites. The new technologies require vehicles move water for drilling fluids and fracking, remove these fluids once they are used, bring hundreds of tons of chemicals and proppants, and transport all the specialty equipment required for these extraction methods.
The increase in vehicle use comes at a time when professional drivers, especially those with energy skills, are in short supply. The unfortunate result is more accidents.
“In the oil and gas business right now, you have to have risk solutions for the new market, fracking and horizontal drilling, and it can’t be avoidance.”
— Matt Waters, chief underwriting officer, Liberty Mutual Commercial Insurance Specialty – Energy
For example, in Pennsylvania, home to the gas-rich Marcellus Shale formation, overall traffic fatalities across the state are down 19 percent, according to a recent analysis by the Associated Press. But in those Pennsylvania counties where natural gas and oil is being sought, the frequency of traffic fatalities is up 4 percent.
Increasing traffic volume and accidents is also driving frequency trends in workers compensation and general liability.
In the assessment and transfer of upstream and midstream energy risks, however, there simply isn’t enough claims history in the Marcellus formation in Pennsylvania or the Bakken formation in North Dakota for underwriters to rely on data to price environmental, general and third-party liability risks.
That’s where Liberty Mutual’s commitment, experience and ability to innovate come in. Liberty Mutual was the first carrier to put together a hydraulic fracking risk assessment that gives companies using this extraction method a blueprint to help protect against litigation down the road.
Liberty Mutual insures both lease operators and the contractors essential to extracting hydrocarbons. As in many underwriting areas, the name of the game is clarity around what the risk is, and who owns it.
When considering fracking contractors, Waters and his team work to make sure that any “down hole” risks, be that potential seismic activity, or the migration of methane into water tables, is born by the lease holder.
For the lease holders, Waters and his team of specialty underwriters recommend their clients hold both “sudden and accidental” pollution coverage — to protect against quick and clear accidental spills — and a stand-alone pollution policy, which covers more gradual exposure that unfolds over a much longer period of time, such as methane leaking into drinking water supplies.
Those are two different distinct coverages, both of which a lease holder needs.
Matt Waters discusses the need for stand-alone environmental coverage.
The Energy Cycle
Domestic oil and gas production has expanded so drastically in the past five years that the United States could now become a significant energy exporter. Billions of dollars are being invested to build pipelines, liquid natural gas processing plants and export terminals along our coasts.
While managing risk for energy companies requires deep expertise, developing insurance programs for pipeline and other energy-related construction projects demands even more experience. Such programs must manage and mitigate both construction and operation risks.
Matt Waters discusses future growth for midstream oil and gas companies.
In the short-term, domestic gas and oil production is being curtailed some as fuel prices have recently plummeted due to oversupply. In the long-term, those domestic prices are likely to go back up again, particularly if legislation allows the fuel harvested in the United States to be exported to energy deficient Europe.
Waters and his underwriting team are in this energy game for the long haul — with some customers being with the operation for more than 25 years — and have industry-leading tools to play in it.
Beyond Liberty Mutual’s hydraulic fracturing risk assessment sheet, Waters’ area created a commercial driver scorecard to help its midstream and upstream clients select and manage drivers, which are in such great demand in the industry. The safety and skill of those drivers play a big part in preventing commercial auto claims, Waters said.
Liberty Mutual’s commitment to the energy market is also seen in Waters sending every member of his underwriting team to the petroleum engineering program at the University of Texas and hiring underwriters that are passionate about this industry.
Matt Waters explains how his area can add value to oil and gas companies and their insurance brokers and agents.
For Waters, politics and the trends of the moment have little place in his long-term thinking.
“We’re committed to this business and to deeply understanding how to best manage its risks, and we have been for a long time,” Waters said.
And that holds true for the latest extraction technologies.
“We’ve had success writing fracking contractors and horizontal drillers, helping them better manage the total cost of risk,” Waters said.
To learn more about how Liberty Mutual Insurance can meet your upstream and midstream energy coverage needs, contact your broker, or Matt Waters at email@example.com.
This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Liberty Mutual Insurance. The editorial staff of Risk & Insurance had no role in its preparation.