Risk Management Archives

Category: Risk Management

May 9, 2013 • Risk Management

Insurance Implications in the West, Texas Explosion

One million dollars of coverage for $100 million in losses? Unfortunately, that appears to be the case for the West, Texas fertilizer plant that recently exploded. Reportedly the owners of West Fertilizer Co. hold a negligible amount of insurance compared to the estimated cost of the damage caused by the blast. The plant did not hold excess or umbrella insurance policies. The fact that the company’s owner has not breached any applicable regulation has been the subject of heated debate on the national level regarding regulating mandatory insurance coverage for companies that handle hazardous materials.

May 2, 2013 • Risk Management

Former New Jersey Governor Sued for “Grossly Negligent” Conduct

Former New Jersey Governor Jon Corzine and other executives from MF Global were recently sued over the 2011 collapse of the commodity trading firm. In the suit, the bankruptcy trustee claims Corzine and others caused the firm to fail through a risky trading strategy and “grossly negligent” oversight. Corzine allegedly was aware that the trades were high risk, but failed to implement proper policies to protect the firm. In particular, the lawsuit contends Corzine breached his duties to the shareholders of MF Global and failed to act in good faith, allegedly causing the firm losses in excess of $1 billion. Corzine has vehemently denied the allegations and characterized the lawsuit as “a clear case of Monday Morning quarterbacking.”

May 1, 2013 • Insurance Products, Risk Management

Lawsuits Targeting America’s Wealthiest

A high percentage of the wealthiest Americans believe that they are more likely to be the subject of a lawsuit today than they were before the financial crisis. The issue of disparity of wealth, income and taxation has intensified these fears that their wealth can attract lawsuits. These concerns are reportedly legitimate, because under the widely accepted doctrine of joint and several liability, if more than one defendant is responsible for a plaintiff’s injury, any of the defendants may be held responsible for the entire damage award. The result is that the plaintiff may focus the attack on the deepest pocket. Much of this analysis may not come as a surprise but people of means frequently underestimate the potential cost of a lawsuit and misunderstand the affordability of effective protection.

April 25, 2013 • Risk Management

When in Doubt Report, Report, Report…

It’s bound to happen…professionals make mistakes. Some of those mistakes may lead to a professional malpractice claim while others may go unnoticed, never to be heard of again. Given that most professionals cannot predict the future nor speak for their clients, professionals must timely report each mistake to her malpractice carrier pursuant to the applicable reporting deadlines because the policy may require it. Even those mistakes that seem inconsequential must be reported. The risks of failing to do so can prove to be costly.

April 15, 2013 • Employment Practices Liability, Risk Management

Firing Problem Employees: A How-To Guide

“They come into work disheveled and drunk. They swear while talking to customers. They have sex with a co-worker in the stockroom. Or worse yet, they steal money from the company or threaten to hurt the boss. Some employees turn out to be bad news for a company and need to be fired, but how can a company show misbehaving workers the door while protecting itself from wrongful termination or discrimination suits?” Our friends at Law360 provide great insight on the difficult and risky task of terminating an employee, here.

April 9, 2013 • Legal Malpractice, Risk Management

Rutgers: Don’t Look at Me…My Lawyer Made Me Do It

As is so often the case, with mounting pressure and criticism comes finger-pointing. In the midst of a well-publicized scandal, Rutgers University is now suggesting that poor advice from its outside counsel led to a series of infamous decisions regarding its former basketball coach. According to reports, as Rutgers’ athletic director Tim Pernetti resigned Friday amid the scandal over men’s basketball coach Mike Rice’s unorthodox practices, he blamed the school administration for following a “process” that allowed Rice to stay on-board. With its back against the wall, Rutgers laid part of the blame on the Roseland, New Jersey law firm that allegedly balked at recommending Rice’s termination.

April 1, 2013 • Engagement Letters, Risk Management

A Disclaimer of Disclaimers – Limits on Limitation of Liability

Many classes of professionals utilize engagement letters with limitation of liability language. For example, accountants, real estate agents and home inspectors often include in their engagements a hold harmless or other clause with the goal of limiting potential damages. Such a clause will establish the extent of exposure, if any, that the professional can be held liable for should problems arise with the engagement. The question of whether the clause is enforceable is state specific and somewhat unpredictable.

March 28, 2013 • Risk Management

Malpractice Advice from Dr. Oz

Dr. Oz, a well known TV personality, was recently named in a New York lawsuit arising from on-air advice he provided to his viewers. The doctor allegedly informed his audience about a “heated rice” remedy for insomnia. Dr. Oz called it “my night sleep special” on the April 17, 2012, episode of his NBC show titled “Dr. Oz’s 24-Hour Ultimate Energy Boost Plan.” Unfortunately for 76-year-old Frank Dietl, that Boost Plan left him bedridden for weeks with severe burns on his feet. According to the lawsuit, Dr. Oz failed to provide proper warnings and instructions about the home remedy. The plaintiff seeks unspecified damages from Dr. Oz, NBC Studios, Sony Pictures Television and Harpo Productions.