Wo r king in Har mo ny with Yo ur L e gal De par tme nt to Pr - PowerPoint PPT Presentation

Wo r king in Har mo ny with Yo ur L e gal De par tme nt to Pr o te c t the Co mpany’s Bo tto m L ine Iryna Sladkevych Matt Jeweler W W W . C HIC A G O LA N D R ISKFO R UM . O R G

Who We Are Ir yna Sladke vyc h - Risk and Insur anc e Manage r , E sse ndant • E sse nda nt is a who le sa le distrib uto r o f wo rkpla c e e sse ntia ls – Re spo nsib le fo r c o o rdina tio n o f risk ma na g e me nt & insura nc e : pla c ing – insura nc e pro g ra m, a nd ma na g ing c la ims, sa fe ty a nd lo ss c o ntro l initia tive s Matt Je we le r – Counse l, Pillsbur y Winthr op Shaw Pittman • Pillsb ury is a la w firm with a ppro xima te ly 700 la wye rs in 20 o ffic e s a ro und – the wo rld Ma tt’ s pra c tic e fo c use s o n re pre se nting c o rpo ra te po lic yho lde rs in – insura nc e ma tte rs, fro m po lic y ne g o tia tio n to re so lutio n o f c la ims a nd litig a tio n, if ne c e ssa ry 2

Ag e nda Why it is impo rta nt fo r RM a nd L e g a l to c o o rdina te • Co mmo n e xa mple s whe re a la c k o f c o o rdina tio n c a n ha ve se rio us (a nd – c o stly) c o nse q ue nc e s I de ntifying a nd e sta b lishing a re la tio nship with “g o -to ” c o unse l • K e y ite ms a b o ut RM tha t L e g a l ne e ds to kno w • K e y insura nc e issue s a nd c o nc e pts tha t L e g a l ne e ds to kno w • T he ro le o f o utside c o ve ra g e c o unse l • T ips fo r b e tte r c o he sio n b e twe e n RM a nd L e g a l • Q&A • 3

Ho w L a c k o f Co o rdina tio n Be twe e n L e g a l a nd Risk Ma na g e me nt De pa rtme nts Ca n Ha rm the Co mpa ny  Writte n de ma nd c o me s in to L e g a l a nd RM do e sn’ t kno w a b o ut it, the n six mo nths la te r a la wsuit is file d a fte r po lic y re ne ws  Cla im no t “first ma de ” during the la te r po lic y pe rio d  Po ssib ly no c o ve ra g e due to e xc lusio n fo r c la ims re la ting to prio r c la ims o r c irc umsta nc e s tha t the insure d wa s a wa re o f prio r to po lic y pe rio d  L a te no tic e issue 4

Ho w L a c k o f Co o rdina tio n Be twe e n L e g a l a nd Risk Ma na g e me nt De pa rtme nts Ca n Ha rm the Co mpa ny  F ie ld do e s no t info rm RM o r L e g a l o f a n issue , the n la te r a de ma nd/ la wsuit is ma de  Po ssib ly no c o ve ra g e due to e xc lusio n fo r c la ims re la ting to prio r c la ims o r c irc umsta nc e s tha t the insure d wa s a wa re o f prio r to po lic y pe rio d  L a te no tic e issue 5

E xa mple : E PA a ud it a t the c usto me r’ s lo c a tio n re ve a le d vio la tio ns • Yo ur c o mpa ny ha d re c o mme nd e d c e rta in pra c tic e s tha t c usto me r use d a nd fo r • whic h the y ha ve b e e n c ite d Custo me r se nt a first no te a d vising o f vio la tio ns to the fie ld ma na g e r b ut it wa s • ne ve r e sc a la te d to RM o r L e g a l o r to a ny se nio r le a d e r, a nd thus no tic e o f c irc umsta nc e wa s ne ve r g ive n to the E &O c a rrie r Six mo nths la te r, the c lie nt re c e ive s pe na ltie s fro m the E PA d ue to the a ud it • vio la tio ns in the a mo unt o f $100K a nd se nd s a d e ma nd le tte r to a c o rpo ra te o ffic e fo r re imb urse me nt b e c a use the pro c e sse s the y ha ve e sta b lishe d whe re b a se d o n yo ur c o mpa ny’ s re c o mme nd a tio ns c la iming tha t yo ur pro fe ssio na l a d vic e wa s inc o rre c t a nd yo u a re re spo nsib le pa rty fo r the vio la tio ns Yo u sub mit the c la im a nd the insure r d e nie s c o ve ra g e b a se d o n la te no tic e • What do yo u do ? Who he lps yo u to r e so lve dispute with the insur e r ? 6

Ho w L a c k o f Co o rdina tio n Be twe e n L e g a l a nd Risk Ma na g e me nt De pa rtme nts Ca n Ha rm the Co mpa ny  L e g a l hire s de fe nse c o unse l no t a ppro ve d b y insure r  Pe rha ps no c o ve ra g e fo r de fe nse c o sts de pe nding o n po lic y la ng ua g e , a nd a t the ve ry le a st so me po rtio n o f ra te s ma y b e uninsure d 7

E xa mple : Cyb e r e ve nt o c c urre d o ve r the we e ke nd, a nd the Cyb e r Se c urity Re spo nse pla n did no t • list pre -a ppro ve d c o unse l to ha ndle the inc ide nt Ge ne ra l Co unse l a ppo ints a firm with whic h he ha s c o nne c tio n a nd wo rke d in a pre vio us • c o mpa ny o n a simila r issue Afte r re po rting the Cyb e r e ve nt to the c a rrie r’ s e me rg e nc y ho t line , the c o nta c t pe rso n • a ppo inte d fo r this c la im is CI SO who sc he dule s a c a ll with the insure r first thing in the mo rning ne xt da y. RM is no t no tifie d o f a n a tto rne y a ppo intme nt o r o f the sc he dule d c a ll. T he c a ll ha ppe ns a nd it a ppe a rs tha t a n a tto rne y re pre se nts yo ur c o mpa ny a s a ppo inte d b y Ge ne ra l Co unse l, b ut a djuste r invite s the ir pa ne l c o unse l in a ntic ipa tio n tha t yo ur c o mpa ny ha s no t hire d a ny o the r la w firm. No w b o th a tto rne ys a re pre se nt o n the c a ll whic h c re a te s c o nfusio n a nd unne c e ssa ry • frustra tio n o f a ll pa rtie s invo lve d. L a te r o n, the a djuste r a ppro ve s yo ur a ppo inte d c o unse l ho we ve r, the ra te s fo r o ur a ppo inte d c o unse l a re twic e hig he r a nd a djuste r do e s no t a ppro ve the pa ne l a tto rne y o r the hig he r ra te s. Ho w c o uld this situatio n have be e n avo ide d? Why do yo u think this happe ne d and c o uld it have be e n pr e ve nte d if RM was invo lve d and fully info r me d by L e gal? 8

Ho w L a c k o f Co o rdina tio n Be twe e n L e g a l a nd Risk Ma na g e me nt De pa rtme nts Ca n Ha rm the Co mpa ny  L e g a l se ttle s a la wsuit a g a inst the c o mpa ny witho ut the insure r’ s c o nse nt  Po ssib ly no c o ve ra g e pe r po lic y c o nditio n pro hib iting se ttling witho ut c o nse nt  Ma y b e sa ve d b y a pre judic e re q uire me nt, de pe nding o n wha t sta te la w wo uld g o ve rn the insura nc e c la im 9

Who I n L e g a l Sho uld RM Re a c h Out T o E sta b lish a c le a r pro c e ss b e twe e n L e g a l a nd RM de pa rtme nts • (no tific a tio n, c o mmunic a tio n, a ppro va ls) I de ntify po ints o f c o nta c t in L e g a l fo r the RM te a m • I f yo u ha ve multiple “in-ho use ” a tto rne ys, ide ntify fo r whic h ma tte rs • the y sho uld b e invo lve d Co o rdina te with L e g a l to ide ntify o utside la w firms a nd fo r whic h • ma tte rs the y sho uld b e invo lve d Disc uss whe the r RM c a n c o nta c t tho se firms dire c tly o r ne e d pre -a ppro va l – fro m L e g a l, a nd c o nve y this pro to c o l to RM 10

K e y I te ms Ab o ut RM T ha t L e g a l Ne e ds T o K no w L e g a l ne e ds to kno w to c o nne c t with RM o n the c la ims, insura nc e , o r • la wsuits re c e ive d L e g a l sho uld ha ve a c le a r unde rsta nding o f ro le s a nd re spo nsib ilitie s • in RM a nd who m to re a c h o ut to o n va rio us ma tte rs Disc uss a nd ide ntify o utside c o unse l de pe nding o n the ma tte r a nd • pro vide this info rma tio n to RM to ha ve a pre -a ppro ve d list o f pro vide rs a c c e pte d b y the c a rrie rs Ha ve yo ur T PA/ c a rrie r ho ld a n a nnua l le g a l re vie w o f se rvic e s the y • pro vide o n c o mpa ny’ s b e ha lf (e .g ., wo rke rs c o mp) a nd inc lude L e g a l to ma ke sure the y a re in a g re e me nt with the ir q ua lific a tio ns, ra te s, jurisdic tio na l e xpe rtise , e tc . 11

E xa mple s: I f re so lve d wo rke rs c o mp c la im ma y re q uire injure d wo rke r to g o • thro ug h ADA pro c e ss if the re is a dispute o n full re c o ve ry o r in c e rta in jurisdic tio ns it c a n po te ntia lly b e c o me a n issue a nd b e ne fits wo uld ne e d to b e c o ntinue d re g a rdle ss o f the re le a se a nd fo r a s lo ng a s the ma tte r is no t re so lve d in c o urt Also , po te ntia lly b e c o ming a n e mplo yme nt ma tte r – Spe c ia l c o ve ra g e tha t ma y b e re q uire d with c e rta in type s o f b usine ss • (e spe c ia lly impo rta nt whe n wo rking with M&A o r stra te g y g ro up o n a c q uiring ne w c o mpa nie s) 12

K e y I nsura nc e I te ms Ab o ut Whic h L e g a l Ne e ds T o Be I nfo rme d Wha t c o ve ra g e the Co mpa ny ha s • Amo unt o f po lic y limits – I de ntify o c c urre nc e vs. c la ims-ma de – Brie f o ve rvie w o f c o ve ra g e s pro vide d unde r e a c h po lic y a nd wha t • type s o f lo sse s a re po te ntia lly c o ve re d RM c a n pro vide e xa mple s o f po ssib le lo sse s tha t c o mpa ny ma y like ly • fa c e b a se d o n the uniq ue kno wle dg e a nd e xpe rie nc e o f the RM, a nd e xpla in ho w insura nc e fits in (o r do e sn’ t) 13