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.
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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.
Cyber: The Overlooked Environmental Threat
“Cyber breach” conjures fears of lost or ransomed data, denial of service, leaked corporate secrets and phishing scams.
But in a world where so many physical operations are automated and controlled by digital technologies, the consequences of cyber attacks extend far beyond the digital realm to include property damage, bodily injury, and even environmental pollution.
Industrial companies that deal with hazardous materials — like power plants, refineries, factories, water treatment facilities or pipelines — are heavily dependent on automated technology to maximize their efficiency. Other sectors use technology to control HVAC systems, power and utilities, placing their properties at risk as well.
Cyber risks like theft of personally identifiable data have been highly publicized in recent years, but physical risks like pollution sparked by a cyber breach may not be as obvious.
“It’s significant to lose 100,000 customers’ Social Security numbers,” said William Bell, Senior Vice President, Environmental, Liberty International Underwriters, “but can you imagine if a waste treatment facility’s operations get hacked, gates open, and thousands of tons of raw sewage go flowing down a local river?”
In many industrial complexes, a network of sensors gathers and monitors data around machinery efficiency and the flow of the materials being processed. They send that information to computer terminals that interpret the data into commands for the hardware elements like motors, pumps and valves.
This automation technology can control, for example, the flow of pipelines, the level of water or waste held in a reservoir, or the gates that hold in and control the release of vast quantities of sewage and other process materials. Hackers who want to cause catastrophe could hijack that system and unleash damaging pollutants.
And it’s already happened.
In 2000, a hacker caused 800,000 liters of untreated sewage to flood the waterways of Maroochy Shire, Australia. In 2009, an IT contractor, disgruntled because he was not hired full-time, disabled leak detection alarm systems on three off-shore oil rigs near Long Beach, Calif.
Just last year, cyber attackers infiltrated the network of a German steel mill through a phishing scam, eventually hacking into the production control system and manipulating a blast furnace so it could not be shut down. The incident led to significant property damage.
According to a leading industrial security expert and executive director of the International Society of Automation, “Today’s operational technologies—such as sensors, SCADA systems, software and other controls that drive modern industrial processes—are vulnerable to cyber attack. The risk of serious damage or compromise to power and chemical plants, oil and gas facilities, chemical and water installations and other vital critical infrastructure assets is real.”
“The hacks could come from anywhere: a teenager looking for entertainment, a disgruntled worker, or more sophisticated criminals or terrorists,” Bell said. “There are certainly groups out there with political and ideological motivations to wreak that kind of havoc.”
“We are working to bring the cyber component of environmental risk to the forefront. Cyber security is not just an IT issue. Industry executives need to be aware of the real-world risks and danger associated with an industrial cyber attack as well as the critical differences between cyber security and operational technology security.”
— William Bell, Senior Vice President, Environmental, Liberty International Underwriters
The cleanup cost of an environmental disaster can climb into the hundreds of millions, and even if a cyber breach triggered the event, a cyber policy alone will not cover the physical and environmental damage it caused.
The risk is even more pointed now, as resource conservation becomes increasingly important. Weather related catastrophe modeling is changing as both flooding and drought become more severe and frequent in different regions of the U.S. Pollution of major waterways and watersheds could have severe consequences if it affects drinking water sources, agriculture and other industrial applications that depend on this resource.
Managing the Risk
Unfortunately, major industrial corporations sometimes address their environmental exposure with some hubris. They trust in their engineers to remove the risk by designing airtight systems, to make a disaster next to impossible. The prospect of buying environmental insurance, then, would be superfluous, an expression of doubt in their science-backed systems.
Despite the strongest risk management efforts, though, no disaster is 100 percent avoidable.
“We are working to bring the cyber component of environmental risk to the forefront,” Bell said. “Cyber security is not just an IT issue. Industry executives need to be aware of the real-world risks and danger associated with an industrial cyber attack as well as the critical differences between cyber security and operational technology security.”
The focus on network security and data protection has distracted industry leaders from strengthening operational technology security. Energy, manufacturing and other industrial sectors lack best practice standards when it comes to securing their automated processes.
After the Homeland Security Act of 2002, the Department of Homeland Security began comprehensive assessments of critical infrastructure’s cyber vulnerability, working with owners and operators to develop solutions. It also offers informational guides for private companies to do the same. The National Institute of Standards and Technology also continues work on its cyber security framework for critical infrastructure. Although this helps to establish some best practices, it does not completely mitigate the risk.
Many businesses don’t see themselves as a target, but they need to look beyond their own operations and property lines. They could be an attractive target due to their proximity to densely populated areas or resources such as waterways and highways, or nationally or historically significant areas. The goal of a cyber terrorist is not always to harm the target itself, but the collateral damage.
The Role of Insurance
“Environmental liability is still by and large viewed as a discretionary purchase,” Bell said, “but the threat of a cyber attack that can manipulate those systems and ultimately lead to a pollution incident is added incentive to buy environmental coverage.”
Liberty International Underwriters’ environmental coverage could respond to many pollution conditions set off by a cyber breach event.
“Property damage, bodily injury and cleanup of any pollution at or emanating from a covered property would likely be taken care of,” Bell said. “The risk is not so much the cyber exposure but the consequence of the attack. The resulting claims and degradation to the environment could be severe, especially if the insured was a target chosen because of their unique position to have a large effect on the local population and environment.”
LIU also offers dedicated Cyber Liability insurance solutions designed to manage and mitigate the cost of responding to a cyber attack and any resultant loss of data and associated liability. Coverage includes proactive data breach response services designed to help organizations comply with regulatory requirements and prevent data breaches.
LIU’s loss control managers are also on hand to conduct assessments of insureds’ properties and facilities to examine potential environmental impacts. They can educate brokers on the importance of enhancing cyber security to prevent an environmental accident in the first place.
“People are relying more and more on their systems, automaton is increasing, and the risk is growing,” Bell said. “We’re all focused on protecting data, but the consequences of a cyber breach can be much farther reaching than data alone.”
To learn more about Liberty International Underwriters’ environmental coverages and services, visit www.LIU-USA.com.
Liberty International Underwriters is the marketing name for the broker-distributed specialty lines business operations of Liberty Mutual Insurance. Certain coverage may be provided by a surplus lines insurer. Surplus lines insurers do not generally participate in state guaranty funds and insureds are therefore not protected by such funds. This literature is a summary only and does not include all terms, conditions, or exclusions of the coverage described. Please refer to the actual policy issued for complete details of coverage and exclusions.
This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Liberty International Underwriters. The editorial staff of Risk & Insurance had no role in its preparation.