ECBM's Blog: Information To Protect What You Grow

Though there is no shortage of restaurants and food services, this type of business is a rather niche sector in the insurance marketplace. There are so many aspects that come into play when putting together a program for restaurants. With some teams handling food, some handling people and communications, and others handling equipment-even the employee positions alone call for multiple types of coverage. In the past few years, we’ve seen a huge shift in the industry that introduced new styles of dining. From delivery, takeout, and outdoor dining-all of these exciting expansions bring with them a whole new set of liabilities.

COVID-19 has changed the way many organizations do business. Whether out of a sense of caution or to comply with emergency orders, many businesses have shifted to allowing more work from home and remote work from employees. This increase in remote work has had significant impacts on cyber security and cyber insurance.

Cyber incidents and cyber practices are testing the boundaries of the law in numerous unique ways. The length of most litigation and the relative newness of cyber technology means that many of the claims and legal principles governing those claims are still working their way through the court system. The high cost of litigation sends many of those claims to settlement talks without a firm decision to guide future cases.

The failure to understand insurance coverage can create significant gaps in a company’s exposure. Businesses need to make sure they understand the terms of their policies when shopping for coverage to make sure what looks like a good deal isn’t paying a little less money for a lot less coverage. Professional liability policies, also known as errors and omissions coverage, can create some of these issues simply because of the way these policies vary from normal insurance coverage.

The Dark Overlord hack stands at the intersection of a number of prominent issues in the modern world: terrorism, cyber warfare, confidentiality and privacy. On New Year’s Eve, 2018, a group of hackers calling themselves Dark Overlord stated they had hacked confidential legal files related to the insurance litigation that followed the 9/11 attacks. The hackers demanded a ransom from the law firm from whom the information was stolen. Apparently, the ransom was paid but the law firm breached the terms of the ransom by reporting the breach to law enforcement. Now the hackers have threatened to sell the information online through the dark web.

Risk transfers are a vital aspect of any comprehensive risk management plan.  Theoretically, those in the best position to avoid a risk should always bear responsibility for the risk.  The real world does not work that way, unfortunately.  Oftentimes, larger companies and larger contractors use risk transfers to try and push liability “downhill” – onto the backs of smaller companies with less negotiating leverage.

The conflicting interests that may exist between an insured and their insurance company when it comes to the defense of a lawsuit have led courts to create rules to ensure everyone’s legal rights are respected.  These rules implicate issues like the insured’s right to hire their own attorney or the insurer’s ability to reserve their rights to avoid paying a judgment.  The conflicting interests can become particularly thorny when one party wishes to settle a case while the other objects to the settlement.

When thinking about the potential to be sued, many attorneys imagine the possibility of malpractice lawsuits - suit brought by former clients alleging they did not do their job well enough.  Few consider the possibility of lawsuits by adverse parties for issues such as malicious prosecution or abuse of process, which in a sense allege that the attorney did their job too well.  Despite this, twenty percent of lawsuits filed against attorneys are filed by adverse parties.  These cases can pose interesting challenges for attorneys and raise difficult questions under professional liability insurance policies.

Indemnification clauses in commercial contracts can present a number of potential issues.  When the parties to the contract do not properly think through or write out indemnification provisions to address these issues, it can lead to costly and dangerous unintended consequences.  Companies need to think through exactly what they mean when they seek indemnification from a contracting party and ensure their approach to indemnification issues comports with their approach to their insurance coverage.

Office work, while considered a low-activity job can still have dangers associated with it. Repeated movements, footwear with little traction, improper lifting techniques, equipment risks, and trip hazards can be found in any office. How can you keep yourself and staff safe? Reducing workplace injuries is an ongoing issue in all industries. Here are some tips and exposures to look our for in your office.