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A Perfect Formula
Underwriters that are very worried
about the trail of opioid addiction
liability appear to be on the mark.
From all appearances, the addiction
epidemic raging across the nation
contains every element a plaintiffs’
attorney would need to score a win in
court. Here are just a few:
Science — Just how perniciously
opioids interact with the human
brain, creating a physical and mental
addiction that is so very hard to break,
is well documented scientifically.
Lack of Controls — Plaintiffs’
attorneys will be asking manufacturers
of these addictive substances, and
every member of their distribution
channel, what controls they had in
place to ensure populations were not
harmed by these substances.
It appears that any controls in place
were insufficient, and overall, profits
were placed before people.
The Appearance of Collusion
— Relationships between health care
providers, pill makers and pill sellers
appear to have been too fraternal.
Gifts to physicians and health system
executives from representatives of
pharmaceutical companies will lead
jurors to conclude that professional
ethics were bent by self-interest.
We know from our workers’
compensation sources that physician
dispensing — doctors selling drugs
out of their offices at jacked-up prices
— included the selling of addictive
Victims — Opioid addiction is
claiming 160 lives per day in this
country, and that death train is still
rolling along. Evidence of knowledge
of the risk beforehand, collusion and
personal profit playing a hand in
anyone’s death is a formula no defense
attorney wants to find themselves on
the wrong side of.
The lawsuits on this subject are
piling up. Comparisons with tobacco
and asbestos seem rational.
WINE COUNTRY FIRE DAMAGE
A study released by Sonoma State
University’s Wine Business Institute
reported on vineyard damage in the
aftermath of last year’s wildfires.
According to the Institute, 99.8
percent of North Coast vineyards —
some 138,937 out of 139,204 acres —
were unaffected by the fires.
In other encouraging news, the
majority of the grapes were harvested
before the fires, though it remains to
be seen what percentage of that harvest
Concern runs high among Sonoma
County winemakers that consumers
believe there has been substantial
quality degradation due to the wildfires.
It’s increasingly probable that quality
damage will not be as bad as feared.
The fires that burned across seven
counties in Northern California did
much more substantial damage to the
housing stock, destroying some 9,000
structures. Those losses exacerbated an
existing housing shortage.
INSURING THE GIG ECONOMY
By 2020, approximately 40 percent
of the U.S. labor market will be
comprised of gig workers. Cake &
Arrow, a customer-experience design
agency that partners specifically with
insurance companies, released a new
case study exploring the future of
insurance in the age of the gig economy.
Among its findings, Cake & Arrow
reports that insurance markets are
behind in satisfying the needs of the
gig market. The research showed gig
workers are largely unaware of their
own risks. Likewise, gig workers are
under-aware of the insurance products
available to them that meet their needs.
A study has shown damages from the
2017 fires did not affect vineyards as
much as feared.
These workers, the study explained,
are primed to purchase policies directly.
Cake & Arrow aptly pointed out that
most gig workers use apps to conduct
their work; insurance apps would be a
wise choice to target such a market.
The study, entitled “The Gig
Economy is Changing the Way We
Work,” also queried gig workers about
what they want in their insurance. The
answer: Make gig work easier or safer
by providing something specific to
what they do.
SHOOTER INSURANCE SPIKES
Ohio-based insurance broker The
McGowan Companies reported a
spike in active shooter coverage since
the Marjory Stoneman Douglas High
School shooting, where 17 people were
killed and more than a dozen injured.
McGowan reported it has written
three times more policies since the
incident than in the previous year.
The insurance, backed by XL Catlin,
covers up to $250,000 per shooting
victim, for death, serious injuries
and, sometimes, additional medical
coverage, depending on how much a
district purchases. Premiums range
from $1,400 per year for $1 million in
coverage for a small private school to
$50,000-$100,000 for a $5 million to
$10 million policy for a large public
McGowan began offering “active
shooter” coverage in 2016. Since the
Marjory Stoneman Douglas incident,
McGowan reported several South
Florida school districts purchased up to
$3 million in coverage.
UPDATED FLOOD ESTIMATES
A report published by Environmental
Research Letters in February revealed
that the percentage of the United
States Gross Domestic Product at risk
from flood is far greater than realized.
In preparing the report, the authors
stipulate that FEMA flood mapping
efforts are inadequate in creating a
granular picture of flood risk, because
they don’t take into account residential
and commercial properties at fresh
water flood risk from smaller streams.
The report states that 40.8 million
people in the United States are at
risk for being impacted by a one in
100-year flood. That translates to
a domestic GDP exposure of $2.9
trillion, or 15. 3 percent of the country’s
RM TEAM LEAVES WELLS FARGO
Amid the slew of legislative action
against Wells Fargo, the big bank lost
four of its top risk managers.
The company sent an internal
announcement first before making
a public statement. In the internal
announcement Wells Fargo detailed
how it plans to implement a new
design for how it manages risks. Part of
the new scheme saw the retirement of
four risk management executives.
This change comes on the heels
of the company being sanctioned by
the Federal Reserve for its numerous
shortcomings, including overcharging
mortgage customers and opening fake
The risk team members’ departure
is just one move; Wells Fargo has made
a concerted effort to come back from
its many errors. Last year, it appointed
Elizabeth Duke, a former member of
the Board of Governors of the Federal
Reserve, as its new chair.