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2018 Power Broker

Entertainment

Eagle-Eye View on Insurance

Berj Basralian
Account Executive
Risk Strategies/DeWitt Stern, New York

It’s no surprise drones would eventually find their way into the entertainment business.

“There’s this wave of drones,” said Lindsay Vetter, senior business affairs manager, VSA Partners Inc. “One of our productions decided to use footage from a drone, but I didn’t have the time to look it all over.”

Vetter turned to her trusted broker, Berj Basralian, who “researched the applications needed for the drones so that the production could have this footage like they wanted.”

Basralian’s work to get production covered will last longer than one production, too.

“We do the same thing every year. We know what we’re doing,” said Vetter. “The vendor changed it up and wanted to use a drone but didn’t want to invest in the coverage. Now it’s in place because of Berj, and every year we are ready to go.”

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Kristy Coleman, senior manager, risk management, Turner Broadcasting System, also turned to Basralian when she needed aircraft coverage. In addition to cast coverage for a popular prank show, they needed insurance to fly one of their talents in a fighter jet.

Later, they needed to insure a tank. Its purpose? To blow up a jeep.

“All of this was coming in piecemeal to the team, because production and the network would come up with new ideas. We needed to have the right insurance, all carriers on board, no exclusions,” Coleman said.

“It was filmed during a two-day event and went off without a hitch. Berj is always available; he never lets me down.”

Covering Every Angle

Konrad Dowling
Area Managing Director
Gallagher, Glendale, Calif.

Michelle Nishikawa, director, physical production, STX Entertainment, describes Konrad Dowling as a workhorse.

“I’m not sure when he takes a break. He has such an attention for details — we probably talk at least twice a day. I can see that he doesn’t ever want to leave me in the lurch.”

STX was filming abroad. The director and producer wanted to use a helicopter to scout for the next day’s shoots but needed the insurance coverage to do so.

“Generally, you want a week to 10 days to plan something like that, but unfortunately the call came in quickly,” Nishikawa said. She contacted Dowling, and it was handled in no time.

Another client said Dowling anticipates every question before they’re even asked. He’s always reviewing forms to see where his clients might be exposed.

For example, the client was deep into a production that had been in the works for a few years. It was filming abroad, and it required reshoots and extra takes after initial production wrapped.

Dowling sat with the team and discussed where they were vulnerable during their long shoot. He negotiated with insurers for the extra months of production at nearly a fraction of what it normally costs.

But that wasn’t all; his client said he was on top of everything. This particular project required animals sourced from France, housed in the U.S., then sent on location for filming. Dowling negotiated contracts for each country’s market and kept the animals properly cared for throughout the duration of filming.

Every Game Day’s MVP

Rebecca Hollis, ARM, CPCU
Vice President
Aon, Atlanta

Rebecca Hollis is in tune with the markets, according to her clients.

One client recently decided to engage with brand new markets, trusting in the value that Hollis brings to the company. Hollis orchestrated all meetings, talked on behalf of the company, researched each market to see they met the company’s needs and gave detailed insight on how the markets were different.

Hollis excels in paying attention, said the client. She knows the company’s program down to the last endorsement.

Christine Procops, senior vice president and CFO, the New York Football Giants, echoed that praise in Hollis’s attention to detail.

“She’s my go-to for all things insurance. The business is constantly evolving, and our insurance requirements and the complexity of our program have grown over recent years.”

Procops said Hollis comes through in the clutch at renewal every year. She praises Hollis as reliable and committed.

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“I’m the CFO of our team, so I am not dealing with insurance every day. Rebecca helps to keep the Giants educated on the market and new issues that may impact us, not to mention the difficult task of keeping me on track with renewals,” she said.

Procops said a 24/7 approach makes Hollis stand out: “We don’t have normal business hours. Rebecca understands our business and how we run. How many other vendors give out their cell phone numbers and then pick up when you call them on vacation?”

No Task Too Big or Too Small

Lorrie McNaught
Senior Vice President
Aon, Sherman Oaks, Calif.

No matter the scale of a task, Lorrie McNaught’s clients know she’ll get the job done.

One client said McNaught isn’t fazed by the volume, type or scale of a production — she’s always prepared for the task at hand.

“I can count on her as a resource,” added Margaret Morales, director of production management, Bunim Murray Productions.

Morales had an overseas production that added a last-minute stunt. She needed a 48-hour turnaround for permissions and insurance coverage. After speaking with the underwriters, McNaught had everything ready to go, said Morales.

Another client of McNaught’s works with a variety of reality shows. They have covered everything from wildlife to home life. With such a broad array of topics, McNaught is always on call.

When the company had to film on location for one of its reality shows, they sent an indemnification form to McNaught to double-check if they had broad-form property damage coverage in their policy. Shooting couldn’t begin without an answer. McNaught responded within 20 minutes, a company executive said.

The client said that it’s times like this, when McNaught can get back to them on-the-spot with an answer, that show how hard-working and knowledgeable she is.

Sometimes it’s big, and sometimes it’s small scale, the client said. To them, McNaught is a true insurance professional.

Weathering Any Storm

Daniel R’bibo, ARM
Area Senior Vice President
Gallagher, Glendale, Calif.

Kelly Todd, line producer, Dumplin Holdings Inc., said Gallagher’s Daniel R’bibo is always available, day or night.

Todd’s company was filming in Georgia when Hurricane Irma hit. Because R’bibo understood the production side, Todd knew R’bibo would be a reliable source for her insurance-related questions while preparing for the storm.

“After Hurricane Irma, Daniel visited set. He advised us that the best rule of thumb was to mitigate any claims that we could have,” she said.

When the company was closing the bond for production, R’bibo put many documents together quickly in order to close out the production process on time, Todd said. He helped identify what was covered and advised them on how to proceed post-claim in order to mitigate any extra expenses.

Another client described R’bibo as a go-getter.

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The client was working on a back-to-back filming project with a huge budget. Due to the size, the production needed more aggressive limits for the films’ unique exposures.

Additionally, the actors involved in the production wanted to work on other projects during filming, which brought outside production companies into the coverage mix.

R’bibo worked to ensure that no special exclusions were placed on the actors while they worked on other projects, and the client said R’bibo checked off everything on his list; filming went ahead as scheduled.

One Step Ahead

George Walden
Resident Managing Director
Aon, New York

Knowing how to head off potential risk is just one way Aon’s George Walden demonstrates his expertise.

“A lot of money is spent on creating new content,” said Gregory L. Goetz, VP risk management, insurance, enterprise risk management, Scripps Networks Interactive. The entertainment industry assumes risk developing new content ideas and a variety of exposures can arise while content is being produced.

“As people in this industry know, a variety of risk events can occur during content production, which can affect the ultimate profitability of that content.”

Walden and Goetz have regular discussions to prepare for any such events. Together, they designed various methods to transfer risk to insurance carriers or arrange other alternative funding methods.

Another client said Walden has grown with the times and keeps them current on certain coverages like cyber security and transmission.

Walden was described as an extremely responsive and educated broker by a third client. She saw him as an advocate — someone who thinks about the company from her perspective — and an advisor — someone who can be objective when a situation calls for it.

“George is very demanding of his team and customer service is a very high priority,” said Goetz. Walden works to have a fast turnaround and strives to present helpful information, he said.

More from Risk & Insurance

More from Risk & Insurance

Pharma Under Fire

Opioids Give Rise to Liability Epidemic

Opioids were supposed to help. Instead, their addictive power harmed many, and calls for accountability are broadening.
By: | May 1, 2018 • 8 min read

The opioid epidemic devastated families and flattened entire communities.

The Yale School of Medicine estimates that deaths are nearly doubling annually: “Between 2015 and 2016, drug overdose deaths went from 33,095 to 59,000, the largest annual jump ever recorded in the United States. That number is expected to continue unabated for the next   several years.”

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That’s roughly 160 deaths every day — and it’s a count that’s increasing daily.

In addition to deaths, the number of Americans struggling with an opioid disorder disease (the official name for opioid addiction) is staggering.

The National Institute on Drug Abuse (NIDA) estimates that 2 million people in the United States suffer from substance use disorders related to prescription opioid pain relievers, and roughly one-third of those people will “graduate” to heroin addiction.

Conversely, 80 percent of heroin addicts became addicted to opioids after being prescribed opioids.

As if the human toll wasn’t devastating enough, NIDA estimates that addiction costs reach “$78.5 billion a year, including the costs of health care, lost productivity, addiction treatment, and criminal justice involvement.”

Shep Tapasak, managing principal, Integro Insurance Brokers

With numbers like that, families are not the only ones left picking up the pieces. Municipalities, states, and the federal government are strained with heavy demand for social services and crushing expenditures related to opioid addiction.

Despite the amount of money being spent, services are inadequate and too short in duration. Wait times are so long that some people literally die waiting.

Public sector leaders saw firsthand the range and potency of the epidemic, and were among the first to seek a legal reckoning with the manufacturers of  synthetic painkillers.

Seeking redress for their financial burden, some municipalities, states and the federal government filed lawsuits against big pharmaceutical companies and manufacturers. To date, there are more than 100 lawsuits on court dockets.

States such as Ohio, West Virginia, New Jersey, Pennsylvania and Arkansas have been hit hard by the epidemic. In Arkansas alone, 72 counties, 15 cities, and the state filed suit, naming 65 defendants. In Pennsylvania, 16 counties, Philadelphia, and Commonwealth officials have filed lawsuits.

Forty one states also have banded together to subpoena information from some drug manufacturers.

Pennsylvania’s Attorney General, Josh Shapiro, recently told reporters that the banded effort seeks to “change corporate behavior, so that the industry can no longer do what I think it’s been doing, which is turning a blind eye to the effects of dumping these drugs in the communities.”

The volume of legal actions is growing, and some of the Federal cases have been bound together in what is called multidistrict litigation (MDL). These cases will be heard by a judge in Ohio. Plaintiffs hope for a settlement that will provide funding to be used to help thwart the opioid epidemic.

“From a societal perspective, this is obviously a big and impactful issue,”  said Jim George,  a managing director and global claims head with Swiss Re Corporate Solutions. “A lot of people are suffering in connection with this, and it won’t go away anytime soon.

“Insurance, especially those in liability, will be addressing this for a long time. This has been building over five or six years, and we are just now seeing the beginning stages of liability suits.” 

Basis for Lawsuits

The lawsuits filed to date are based on allegations concerning: What pharma knew or didn’t know; what it should have known; failure to monitor size and frequency of opioid orders, misrepresentation in marketing about the addictive nature of opioids; and false financial disclosures.

Opioid manufacturers, distributors and large drugstore chains together represent a $13 billion-a-year industry, meaning the stakes are high, and the pockets deep. Many have compared these lawsuits to the tobacco suits of the ’90s.

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But even that comparison may pale. As difficult as it is to quit smoking, that process is less arduous than the excruciating and often impossible-to-overcome opioid addiction.

Francis Collins, a physician-geneticist who heads the National Institutes of Health, said in a recorded session with the Washington Post: “One really needs to understand the diabolical way that this particular set of compounds rewires the brain in order to appreciate how those who become addicted really are in a circumstance where they can no more [by their own free will] get rid of the addiction than they can get free of needing to eat or drink.”

“Pharma and its supply chain need to know that this is here now. It’s not emerging, it’s here, and it’s being tried. It is a present risk.” — Nancy Bewlay, global chief underwriting officer for casualty, XL Catlin

The addiction creates an absolutely compelling drive that will cause people to do things against any measure of good judgment, said Collins, but the need to do them is “overwhelming.”

Documented knowledge of that chemistry could be devastating to insureds.

“It’s about what big pharma knew — or should have known.  A key allegation is that opioids were aggressively marketed as the clear answer or miracle cure for pain,” said Shep Tapasak, managing principal, Integro Insurance Brokers.

These cases, Tapasak said, have the potential to be severe. “This type of litigation boils down to a “profits over people” strategy, which historically has resonated with juries.”

Broadening Liability

As suits progress, all sides will be waiting and watching to see what case law stems from them. In the meantime, insurance watchers are predicting that the scope of these suits will broaden to include other players in the supply chain including manufacturers, distribution services, retail pharmacies, hospitals, physician practices, clinics, clinical laboratories and marketing agencies.

Litigation is, to some extent, about who can pay. In these cases, there are several places along the distribution chain where plaintiffs will seek relief.

Nancy Bewlay, global chief underwriting officer for casualty, XL Catlin

Nancy Bewlay, XL Catlin’s global chief underwriting officer for casualty, said that insurers and their insureds need to pay close attention to this trend.

“Pharma and its supply chain need to know that this is here now. It’s not emerging, it’s here, and it’s being tried. It is a present risk,” she said.

“We, as insurers who identify emerging risks, have to communicate to clients. We like to be on the forefront and, if we can, positively influence the outcome for our clients in terms of getting ahead of their risks.”

In addition to all aspects of the distribution chain, plaintiffs could launch suits against directors and officers based on allegations that they are ultimately responsible for what the company knew or should have known, or that they misrepresented their products or signed off on misleading financial statements.

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Shareholders, too, could take aim at directors and officers for loss of profits or misleading statements related to litigation.

Civil litigation could pave the way, in some specific instances, for criminal charges. Mississippi Attorney General Jim Hood, who in 2015 became the first state attorney general to file suit against a prescription drug maker, has been quoted as saying that if evidence in civil suits points to criminal behavior, he won’t hesitate to file those charges as well.

Governing, a publication for municipalities and states, quoted Hood in late 2017 as saying, “If we get into those emails, and executives are in the chain knowing what they’ve unleashed on the American public, I’m going to kick it over to a criminal lawsuit. I’ve been to too many funerals.”

Insurers and insureds can act now to get ahead of this rising wave of liability.

It may be appropriate to conduct a review of policy underwriting and pricing. XL Catlin’s Bewlay said, “We are not writing as if everyone is a pharma manufacturer. Our perception of what is happening is that everyone is being held accountable as if they are the manufacturer.

“The reality is that when insurers look at the pharma industry and each part of the supply chain, including the pharma companies, those in the chain of distribution, transportation, sales, marketing and retail, there are different considerations and different liabilities for each. This could change the underwriting and affect pricing.”

Bewlay also suggests focusing on communications between claims teams and underwriters and keeping a strong line of communication open with insureds, too.

“We are here to partner with insureds, and we talk to them and advise them about this crisis. We encourage them to talk about it with their risk managers.”

Tapasak from Integro encourages insureds to educate themselves and be a part of the solution. “The laws are evolving,” he said. “Make absolutely certain you know your respective state laws. It’s not enough to know about the crisis, you must know the trends. Be part of the solution and get as much education as possible.

“Most states have ASHRM chapters that are helping their members to stay current on both passed and pending legislation. Health care facilities and providers want to do the right thing and get educated. And at the same time, there will likely be an uptick in frivolous claims, so it’s important to defend the claims that are defensible.”

Social Service Risk

In addition to supply chain concerns, insurers and insureds are concerned that even those whose mission it is to help could be at risk.

Hailed as a lifesaver, and approved by the Food and Drug Administration (FDA), the drug Naloxone, can be administered to someone who is overdosing on opioids.  Naloxone prevents overdose by blocking opioid receptor sites and reversing the effects of the overdose.

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Some industry experts are concerned that police and emergency responders could incur liability after administering Naloxone.

But according to the U.S. Department of Justice, “From a legal standpoint, it would be extremely difficult to win a lawsuit against an officer who administers Naloxone in good faith and in the course of employment. … Such immunity applies to … other professional responders.”

Especially hard hit are foster care agencies, both by increased child placements and stretched budgets. More details in our related coverage.

While the number of suits is growing and their aim broadening, experts think that some good will come of the litigation. Settlements will fund services for the addicted and opioid risk awareness is higher than ever. &

Mercedes Ott is managing editor of Risk & Insurance. She can be reached at [email protected]