Municipalities are catching on to their cyber risks too. Just ask Jennifer Deshaies, risk manager for the city of Nashua, N.H.
She had to learn the hard way. Not by having a breach and a claim. No, she had to listen to HUB’s Bill Brouillard try to teach her about it, over and over, until she got it.
It took a while, as she recalled, jokingly.
She would tell him, “We are a municipality; no exposure!” He would introduce her to a gentleman from a cyber insurance company. “I was dead set against it.”
He introduced her to his own brokerage’s cyber experts and made her sit through PowerPoint presentations.
“I was taught how and why things could go wrong. Bill gained nothing but a headache from me on this issue. I gained security and peace of mind. Priceless,” Deshaies said.
Ask Patricia Kabiltz, as well, director of risk management services for the Maine Municipal Association, a group self-insurer for more than 450 municipalities.
The pool had been actively seeking cyber liability coverage for years. Brouillard delivered two strong proposals in 2014, one a stand-alone policy with a national company and the other that would add coverage to their current casualty reinsurance contract at a reasonable price.
Both afforded them pricing and underwriting control — essentially all the things Kabiltz was searching for.
“We would not have been able to accomplish this without Bill’s perseverance and assistance,” she said.
A Major Force
Perhaps the best way to describe John Chino’s role in public sector insurance is as a “major force.” That’s how Bob Coontz, president and CEO of risk pool CharterSAFE, described the veteran public sector broker.
Coontz had always admired Chino from somewhat of a distance. CharterSAFE worked with AJG but with another broker (who Chino supervised), but it wasn’t until that broker departed that Coontz finally saw Chino’s forcefulness up close.
In fact, Coontz traveled the country with Chino, witnessing the relationships he’d built with underwriters. Chino’s impact was so immediate, so impressive, that CharterSAFE has since put his name on their marketing materials.
Chino continues to impress even those risk professionals he’s worked with for years.
“He never says no,” said Matt Hansen, the director of San Francisco’s risk management division.
Hansen had to find coverage for mobile mammography and methadone vans in San Francisco, which he described as the toughest things to place on his program. Not for Chino.
Rick Ferguson, executive director at the Idaho Counties Risk Management Program (ICRMP), has worked with Chino for more than 13 years.
In the past year, ICRMP expanded by nearly 25 percent after moving into a new schools program. That translated into a doubling of its property exposures. Chino assisted in rewriting their existing coverage document to meet the schools’ demands, then in procuring additional limits in excess property coverage.
Tiny municipalities. Call them hamlets or villages, or maybe even a town, but to call them a city might be a stretch. And to say that they are prime targets for public entity underwriters is a stretch as well.
Yet tiny municipalities have a savior. AJG’s Jessica Govic specializes in working with them and bringing them sophisticated risk management tools and tactics from larger municipalities.
For Kevin McNamara, administrator for the village of Dwight, Ill., Govic led the effort to bring his town together with other area municipalities into their own insurance cooperative.
“Jessica has been the leader of this collaboration from day one, and after one year in the newly formed co-op, we are more than satisfied with the results,” he said.
Matt Fritz, administrator for the village of Coal City, Ill., said Govic served to re-galvanize the entire region’s risk management community. Back in 2008, Coal City pursued a stand-alone insurance coverage and saved tens of thousands, tempting other towns to leave the co-op. Yet Fritz sought to return to a cooperative for years. It wasn’t until 2014 that a new cooperative was realized.
“It was not until Jessica became involved that this occurred,” Fritz said.
The newly formed 13-member Illinois Municipal Insurance Cooperative went through its first renewal in 2014.
“The 13 initial members of IMIC are learning more than they care to about insurance, but Jessica continues to help anyone with anything as questions occur,” he said.
Vickie Novak, director of Glenview Public Library, has been a library director for 40 years.
She knows why libraries traditionally have not built insurance programs through pools. Managed by a local board of trustees, libraries traditionally place a lot of currency in autonomy.
“It takes someone who is forward-thinking enough to put this together and give it a push,” Novak said, to change the minds of a library’s board of directors.
Enter Marcus Henthorn, an “exceptional” broker who wowed Novak’s board to the point of inspiring them to become a charter member of the pool he was constructing: Libraries of Illinois Risk Agency (LIRA).
The pool launched on Dec. 31, 2013, with a total of 23 member libraries, and has grown to nearly three dozen members in one year. Members like Glenview can rely on LIRA for all of their coverages, from boiler and machinery, volunteer coverage, workers’ comp, D&O, crime and standard property & casualty.
The library’s results also speak to another reason that normally independent libraries have teamed together. Glenview has saved 27 percent on its premiums by approaching renewal as a group member, rather than a sole entity.
“Not only that, we had better coverage and higher limits,” Novak added.
Another director and early adopter of the pool recounted how her library shaved at least one-fifth off their premium costs in the first year, but seemed equally as excited about the loss assessment and control processes available through the pool.
A Go-To Broker
A conversation about insurance can get technical. We can talk about locking in a maximum of 3 percent rate increases over two years, in an excess workers’ compensation marketplace that has seen volatility and average annual premium raises in the double-digits.
We can discuss how a broker negotiated a single retention for communicable disease and negotiated foreign coverage in the event that the public entity’s sole employee who travels internationally were to get injured or become ill abroad.
Sandra McFarland secured such coverage in 2014 for one of the more populous counties in Georgia.
Michael Kushner, risk management director for the Polk County Board of County Commissioners, said that because of what McFarland’s accomplished for him, “I wouldn’t go to anyone else. She has gotten me some coverage over and above what I would have imagined.”
One example is cyber liability, which is currently excluded from general liability after ISO pulled the exposure from its forms. Kushner said McFarland was busy going to bat for him “as I speak.”
Her abilities aren’t limited to renewals and coverages; call her with claims too. Kushner was staring down a class action lawsuit in his detention centers that led to a multimillion-dollar claim, for which his county would not have had coverage if not for McFarland.
“She made me look great,” he said.
Calm in the Storm
A Northeast public school recently found itself in the eye of an uproar that received national media attention.
Willis’ John M. Moore had assisted the school district in placing its crisis management coverage ahead of the event.
When the crisis erupted, Moore stood by the district’s administrators and school board members as they utilized the coverage and brought in the services of a crisis management firm.
The teachers, administrators and board members could go back to the business of running the district, while specialists stepped in to handle the media.
Timothy Stys of Watchung Hills Regional High School is one business administrator grateful for Moore’s “high-quality advice” and negotiating, not to mention the broker’s ability to stand before the school board when someone needed to explain the nuances of the insurance program.
When some Watchung teachers decided to take students on a world exchange trip without prior notice this past school year, Stys called Moore. who procured the needed additional insurance.
Debra Ginetto, executive director of the Northeast Bergen School Boards Insurance Group, faced New Jersey-instituted cap limitations. Moore negotiated rate stability for Ginetto’s program, while also securing cyber liability coverage, a group safety recognition dividend and school board legal liability coverage in a marketplace seeking a 200 percent rate increase.
Ginetto called Moore “one of the most honest and forthright people that I know.”
The Snow Keeps Falling and the Snow Has Won
This season, municipalities across the northern regions of the United States have been inundated with snow and lots more is coming our way. Our overtime budgets are strapped and for the life of us we can’t seem to find enough salt or sand to help pave the roads throughout our communities.
It’s telling that Punxsutawney Phil not only saw his shadow this year earmarking another six weeks of winter, but that he tried to take a snip at his handler. One might gather he’s as sick and tired of beating back the weather as every snowplow operator across the United States.
Public risk managers are drowning in snowplow vehicular accidents, sheared mailboxes and damage from pockmarked roadways.
We know of the dangers and fear for your safety. We ask that you not call us killjoys, Scrooge or any four-letter words.
For every snow emergency called, there is a resident who claims it was never issued, and that his vehicle was completely engulfed by an unseen snow bank that he hit in the dark of the early morning appears to be everyone’s fault but his own.
Snowy hillsides whose curves are marked by dangerous conditions beckon to be sledded, skied or tobogganed. No amount of signage stops the adventurous, the folks who ignore the signs.
Municipal risk managers get it … truly we do. Yes, we were kids once although many residents now think we were spawned from the devil himself. We once sought that Radio Flyer for the holidays, fastened our mittens tight, and held on for dear life as we hopped on that sled to feel the exhilaration of the wind and the cold.
Problem is, we’ve grown up. We now get those pesky accident reports that claim our snow-covered hillsides are dangerous and cause calamity and injury.
Gone is the innocence of every risk manager’s youth.
I’m sometimes asked if I know the terrain of a hillside marked for “No Sledding.” Really? There are many dangerous hillsides marked with a “No Sledding” moniker. Do residents really expect us to map out the topography, the tree stumps, the divots, the gulleys and know exactly where they might get hurt?
How often have adults, or parents or guardians ignored the signage and said just this once … in the beauty of the snowfall … let’s take that chance?
Don’t. We know of the dangers and fear for your safety. We ask that you not call us killjoys, Scrooge or any four-letter words.
Think of the potential injuries — concussions, broken limbs and a potential loss of life — the next time you say to yourself … just this once, nothing will happen. I used to do this all the time when I was a kid.
Should you take the risk and fail, call 911, but don’t call me the next morning and tell me I should have known there was a tree stump that appeared out of nowhere and hit you in the teeth.
The patience of weather-weary risk managers is slowly waning amidst the claims of those who should have know better, but consciously decided to take a risk. Like Punxsutawney Phil, we wish we could nip back too.
Read all of Marilyn Rivers’ Risk Insider contributions.
Healthcare: The Hardest Job in Risk Management
Radically changing cost and reimbursement models.
Rapidly evolving service delivery approaches.
It is difficult to imagine an industry more complex and uncertain than healthcare. Providers are being forced to lower costs and improve efficiencies on a scale that is almost beyond imagination. At the same time, quality of care must remain high.
After all, this is more than just a business.
The pressure on risk managers, brokers and CFOs is intense. If navigating these challenges wasn’t stress inducing enough, these professionals also need to ensure continued profitability.
“Healthcare companies don’t hide the fact that they’re looking to reduce costs and improve efficiencies in practically every facet of their business. Insurance purchasing and financing are high on that list,” said Leo Carroll, who heads the healthcare professional liability underwriting unit for Berkshire Hathaway Specialty Insurance.
But it’s about a lot more than just price. The complexity of the healthcare system and unique footprint of each provider requires customized solutions that can reduce risk, minimize losses and improve efficiencies.
“Each provider is faced with a different set of challenges. Therefore, our approach is to carefully listen to the needs of each client and respond with a creative proposal that often requires great flexibility on the part of our team,” explained Carroll.
Creativity? Flexibility? Those are not terms often used to describe an insurance carrier. But BHSI Healthcare is a new type of insurer.
The Foundation: Financial Strength
Berkshire Hathaway is synonymous with financial strength. Leveraging the company’s well-capitalized balance sheet provides BHSI with unmatched capabilities to take on substantial risks in a sustainable way.
For one, BHSI is the highest rated paper available to healthcare providers. Given the severity of risks faced by the industry, this is a very important attribute.
But BHSI operationalizes its balance sheet in many ways beyond just strong financial ratings.
For example, BHSI has never relied on reinsurance. Without the need to manage those relationships, BHSI is able to eliminate a significant amount of overhead. The result is an industry leading expense ratio and the ability to pass on savings to clients.
“The impact of operationalizing our balance sheet is remarkable. We don’t impose our business needs on our clients. Our financial strength provides us the freedom to genuinely listen to our clients and propose unique, creative solutions,” Carroll said.
Keeping Things Simple
Healthcare professional liability policy language is often bloated and difficult to decipher. Insurers are attempting to tackle complex, evolving issues and account for a broad range of scenarios and contingencies. The result often confuses and contradicts.
Carroll said BHSI strives to be as simple and straightforward as possible with policy language across all lines of business. It comes down to making it easy and transparent to do business with BHSI.
“Our goal is to be as straightforward as we can and at the same time provide coverage that’s meaningful and addresses the exposures our customers need addressed,” Carroll said.
Claims: More Than an After Thought
Complex litigation is an unfortunate fact of life for large healthcare customers. Carroll, who began his insurance career in medical claims management, understands how important complex claims management is to the BHSI value proposition.
In fact, “claims management is so critical to customers, that BHSI Claims contributes to all aspects of its operations – from product development through risk analysis, servicing and claims resolution,” said Robert Romeo, head of Healthcare and Casualty Claims.
And as part of the focus on building long-term relationships, BHSI has made it a priority to introduce customers to the claims team as early as possible and before a claim is made on a policy.
“Being so closely aligned automatically delivers efficiency and simplicity in the way we work,” explained Carroll. “We have a common understanding of our forms, endorsements and coverage, so there is less opportunity for disagreement or misunderstanding between what our underwriters wrote and how our claims professionals interpret it.”
Responding To Ebola: Creativity + Flexibility
The recent Ebola outbreak provided a prime example of BHSI Healthcare’s customer-centric approach in action.
Almost immediately, many healthcare systems recognized the need to improve their infectious disease management protocols. The urgency intensified after several nurses who treated Ebola patients were themselves infected.
BHSI Healthcare was uniquely positioned to rapidly respond. Carroll and his team approached several of their clients who were widely recognized as the leading infectious disease management institutions. With the help of these institutions, BHSI was able to compile tools, checklists, libraries and other materials.
These best practices were immediately made available to all BHSI Healthcare clients who leveraged the information to improve their operations.
At the same time, healthcare providers were at risk of multiple exposures associated with the evolving Ebola situation. Carroll and his Healthcare team worked with clients from a professional liability and general liability perspective. Concurrently, other BHSI groups worked with the same clients on offerings for business interruption, disinfection and cleaning costs.
Ever vigilant, the BHSI chief underwriting officer, David Fields, created a point of central command to monitor the situation, field client requests and execute the company’s response. The results were highly customized packages designed specifically for several clients. On some programs, net limits exceeded $100 million and covered many exposures underwritten by multiple BHSI groups.
“At the height of the outbreak, there was a lot of fear and panic in the healthcare industry. Our team responded not by pulling back but by leaning in. We demonstrated that we are risk seekers and as an organization we can deploy our substantial resources in times of crisis. The results were creative solutions and very substantial coverage options for our clients,” said Carroll.
It turns out that creativity and flexibly requires both significant financial resources and passionate professionals. That is why no other insurer can match Berkshire Hathaway Specialty Insurance.
To learn more about BHSI Healthcare, please visit www.bhspecialty.com.
Berkshire Hathaway Specialty Insurance (www.bhspecialty.com) provides commercial property, casualty, healthcare professional liability, executive and professional lines, surety, travel, programs, and homeowners insurance. It underwrites on the paper of Berkshire Hathaway’s National Indemnity group of insurance companies, which hold financial strength ratings of A++ from AM Best and AA+ from Standard & Poor’s. Based in Boston, Berkshire Hathaway Specialty Insurance has regional underwriting offices in Atlanta, Boston, Chicago, Los Angeles, New York, San Francisco, Toronto, Hong Kong, Singapore and New Zealand. For more information, contact email@example.com.
The information contained herein is for general informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any product or service. Any description set forth herein does not include all policy terms, conditions and exclusions. Please refer to the actual policy 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 Berkshire Hathaway Specialty Insurance. The editorial staff of Risk & Insurance had no role in its preparation.