2015 Power Broker

Public Sector

Priceless Dedication

Bill Brouillard, ARM Executive Vice President HUB, Wilmington, Mass.

Bill Brouillard, ARM
Executive Vice President
HUB, Wilmington, Mass.

Municipalities are catching on to their cyber risks too. Just ask Jennifer Deshaies, risk manager for the city of Nashua, N.H.

She had to learn the hard way. Not by having a breach and a claim. No, she had to listen to HUB’s Bill Brouillard try to teach her about it, over and over, until she got it.

It took a while, as she recalled, jokingly.

She would tell him, “We are a municipality; no exposure!” He would introduce her to a gentleman from a cyber insurance company. “I was dead set against it.”

He introduced her to his own brokerage’s cyber experts and made her sit through PowerPoint presentations.

“I was taught how and why things could go wrong. Bill gained nothing but a headache from me on this issue. I gained security and peace of mind. Priceless,” Deshaies said.

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Ask Patricia Kabiltz, as well, director of risk management services for the Maine Municipal Association, a group self-insurer for more than 450 municipalities.

The pool had been actively seeking cyber liability coverage for years. Brouillard delivered two strong proposals in 2014, one a stand-alone policy with a national company and the other that would add coverage to their current casualty reinsurance contract at a reasonable price.

Both afforded them pricing and underwriting control — essentially all the things Kabiltz was searching for.

“We would not have been able to accomplish this without Bill’s perseverance and assistance,” she said.

A Major Force

John Chino, ARM-P, CSRM Area Senior Vice President Arthur J. Gallagher, Irvine, Calif.

John Chino, ARM-P, CSRM
Area Senior Vice President
Arthur J. Gallagher, Irvine, Calif.

Perhaps the best way to describe John Chino’s role in public sector insurance is as a “major force.” That’s how Bob Coontz, president and CEO of risk pool CharterSAFE, described the veteran public sector broker.

Coontz had always admired Chino from somewhat of a distance. CharterSAFE worked with AJG but with another broker (who Chino supervised), but it wasn’t until that broker departed that Coontz finally saw Chino’s forcefulness up close.

In fact, Coontz traveled the country with Chino, witnessing the relationships he’d built with underwriters. Chino’s impact was so immediate, so impressive, that CharterSAFE has since put his name on their marketing materials.

Chino continues to impress even those risk professionals he’s worked with for years.

“He never says no,” said Matt Hansen, the director of San Francisco’s risk management division.

Hansen had to find coverage for mobile mammography and methadone vans in San Francisco, which he described as the toughest things to place on his program. Not for Chino.

Rick Ferguson, executive director at the Idaho Counties Risk Management Program (ICRMP), has worked with Chino for more than 13 years.

In the past year, ICRMP expanded by nearly 25 percent after moving into a new schools program. That translated into a doubling of its property exposures. Chino assisted in rewriting their existing coverage document to meet the schools’ demands, then in procuring additional limits in excess property coverage.

Living Small

Jessica Govic Area Vice President Arthur J. Gallagher, Itasca, Ill.

Jessica Govic
Area Vice President
Arthur J. Gallagher, Itasca, Ill.

Tiny municipalities. Call them hamlets or villages, or maybe even a town, but to call them a city might be a stretch. And to say that they are prime targets for public entity underwriters is a stretch as well.

Yet tiny municipalities have a savior. AJG’s Jessica Govic specializes in working with them and bringing them sophisticated risk management tools and tactics from larger municipalities.

For Kevin McNamara, administrator for the village of Dwight, Ill., Govic led the effort to bring his town together with other area municipalities into their own insurance cooperative.

“Jessica has been the leader of this collaboration from day one, and after one year in the newly formed co-op, we are more than satisfied with the results,” he said.

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Matt Fritz, administrator for the village of Coal City, Ill., said Govic served to re-galvanize the entire region’s risk management community. Back in 2008, Coal City pursued a stand-alone insurance coverage and saved tens of thousands, tempting other towns to leave the co-op. Yet Fritz sought to return to a cooperative for years. It wasn’t until 2014 that a new cooperative was realized.

“It was not until Jessica became involved that this occurred,” Fritz said.
The newly formed 13-member Illinois Municipal Insurance Cooperative went through its first renewal in 2014.

“The 13 initial members of IMIC are learning more than they care to about insurance, but Jessica continues to help anyone with anything as questions occur,” he said.

Providing Inspiration

Marcus Henthorn, CLCS Senior Account Executive Arthur J. Gallagher, Itasca, Ill.

Marcus Henthorn, CLCS
Senior Account Executive
Arthur J. Gallagher, Itasca, Ill.

Vickie Novak, director of Glenview Public Library, has been a library director for 40 years.

She knows why libraries traditionally have not built insurance programs through pools. Managed by a local board of trustees, libraries traditionally place a lot of currency in autonomy.

“It takes someone who is forward-thinking enough to put this together and give it a push,” Novak said, to change the minds of a library’s board of directors.

Enter Marcus Henthorn, an “exceptional” broker who wowed Novak’s board to the point of inspiring them to become a charter member of the pool he was constructing: Libraries of Illinois Risk Agency (LIRA).

The pool launched on Dec. 31, 2013, with a total of 23 member libraries, and has grown to nearly three dozen members in one year. Members like Glenview can rely on LIRA for all of their coverages, from boiler and machinery, volunteer coverage, workers’ comp, D&O, crime and standard property & casualty.

The library’s results also speak to another reason that normally independent libraries have teamed together. Glenview has saved 27 percent on its premiums by approaching renewal as a group member, rather than a sole entity.

“Not only that, we had better coverage and higher limits,” Novak added.
Another director and early adopter of the pool recounted how her library shaved at least one-fifth off their premium costs in the first year, but seemed equally as excited about the loss assessment and control processes available through the pool.

A Go-To Broker

Sandra McFarland, ARM-P Senior Vice President Marsh, New York

Sandra McFarland, ARM-P
Senior Vice President
Marsh, New York

A conversation about insurance can get technical. We can talk about locking in a maximum of 3 percent rate increases over two years, in an excess workers’ compensation marketplace that has seen volatility and average annual premium raises in the double-digits.

We can discuss how a broker negotiated a single retention for communicable disease and negotiated foreign coverage in the event that the public entity’s sole employee who travels internationally were to get injured or become ill abroad.

Sandra McFarland secured such coverage in 2014 for one of the more populous counties in Georgia.

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Michael Kushner, risk management director for the Polk County Board of County Commissioners, said that because of what McFarland’s accomplished for him, “I wouldn’t go to anyone else. She has gotten me some coverage over and above what I would have imagined.”

One example is cyber liability, which is currently excluded from general liability after ISO pulled the exposure from its forms. Kushner said McFarland was busy going to bat for him “as I speak.”

Her abilities aren’t limited to renewals and coverages; call her with claims too. Kushner was staring down a class action lawsuit in his detention centers that led to a multimillion-dollar claim, for which his county would not have had coverage if not for McFarland.

“She made me look great,” he said.

Calm in the Storm

John M. Moore Executive Vice President Willis, Morristown, N.J.

John M. Moore
Executive Vice President
Willis, Morristown, N.J.

A Northeast public school recently found itself in the eye of an uproar that received national media attention.

Willis’ John M. Moore had assisted the school district in placing its crisis management coverage ahead of the event.

When the crisis erupted, Moore stood by the district’s administrators and school board members as they utilized the coverage and brought in the services of a crisis management firm.

The teachers, administrators and board members could go back to the business of running the district, while specialists stepped in to handle the media.

Timothy Stys of Watchung Hills Regional High School is one business administrator grateful for Moore’s “high-quality advice” and negotiating, not to mention the broker’s ability to stand before the school board when someone needed to explain the nuances of the insurance program.

When some Watchung teachers decided to take students on a world exchange trip without prior notice this past school year, Stys called Moore. who procured the needed additional insurance.

Debra Ginetto, executive director of the Northeast Bergen School Boards Insurance Group, faced New Jersey-instituted cap limitations. Moore negotiated rate stability for Ginetto’s program, while also securing cyber liability coverage, a group safety recognition dividend and school board legal liability coverage in a marketplace seeking a 200 percent rate increase.

Ginetto called Moore “one of the most honest and forthright people that I know.”

BlackBarFinalists:

Mark Goode Executive Vice President Willis, Charlotte, N.C.

Mark Goode
Executive Vice President
Willis, Charlotte, N.C.

William Deeb Director of Public Entities Aon, Los Angeles

William Deeb
Director of Public Entities
Aon, Los Angeles

Julie Theirl Vice President Aon, San Francisco

Julie Theirl
Vice President
Aon, San Francisco

More from Risk & Insurance

More from Risk & Insurance

Risk Scenario

The Betrayal of Elizabeth

In this Risk Scenario, Risk & Insurance explores what might happen in the event a telemedicine or similar home health visit violates a patient's privacy. What consequences await when a young girl's tele visit goes viral?
By: | October 12, 2020
Risk Scenarios are created by Risk & Insurance editors along with leading industry partners. The hypothetical, yet realistic stories, showcase emerging risks that can result in significant losses if not properly addressed.

Disclaimer: The events depicted in this scenario are fictitious. Any similarity to any corporation or person, living or dead, is merely coincidental.

PART ONE: CRACKS IN THE FOUNDATION

Elizabeth Cunningham seemingly had it all. The daughter of two well-established professionals — her father was a personal injury attorney, her mother, also an attorney, had her own estate planning practice — she grew up in a house in Maryland horse country with lots of love and the financial security that can iron out at least some of life’s problems.

Tall, good-looking and talented, Elizabeth was moving through her junior year at the University of Pennsylvania in seemingly good order; check that, very good order, by all appearances.

Her pre-med grades were outstanding. Despite the heavy load of her course work, she’d even managed to place in the Penn Relays in the mile, in the spring of her sophomore season, in May of 2019.

But the winter of 2019/2020 brought challenges, challenges that festered below the surface, known only to her and a couple of close friends.

First came betrayal at the hands of her boyfriend, Tom, right around Thanksgiving. She saw a message pop up on his phone from Rebecca, a young woman she thought was their friend. As it turned out, Rebecca and Tom had been intimate together, and both seemed game to do it again.

Reeling, her holiday mood shattered and her relationship with Tom fractured, Elizabeth was beset by deep feelings of anxiety. As the winter gray became more dense and forbidding, the anxiety grew.

Fed up, she broke up with Tom just after Christmas. What looked like a promising start to 2020 now didn’t feel as joyous.

Right around the end of the year, she plucked a copy of her father’s New York Times from the table in his study. A budding physician, her eyes were drawn to a piece about an outbreak of a highly contagious virus in Wuhan, China.

“Sounds dreadful,” she said to herself.

Within three months, anxiety gnawed at Elizabeth daily as she sat cloistered in her family’s house in Bel Air, Maryland.

It didn’t help matters that her brother, Billy, a high school senior and a constant thorn in her side, was cloistered with her.

She felt like she was suffocating.

One night in early May, feeling shutdown and unable to bring herself to tell her parents about her true condition, Elizabeth reached out to her family physician for help.

Dr. Johnson had been Elizabeth’s doctor for a number of years and, being from a small town, Elizabeth had grown up and gone to school with Dr. Johnson’s son Evan. In fact, back in high school, Evan had asked Elizabeth out once. Not interested, Elizabeth had declined Evan’s advances and did not give this a second thought.

Dr. Johnson’s practice had recently been acquired by a Virginia-based hospital system, Medwell, so when Elizabeth called the office, she was first patched through to Medwell’s receptionist/scheduling service. Within 30 minutes, an online Telehealth consult had been arranged for her to speak directly with Dr. Johnson.

Due to the pandemic, Dr. Johnson called from the office in her home. The doctor was kind. She was practiced.

“So can you tell me what’s going on?” she said.

Elizabeth took a deep breath. She tried to fight what was happening. But she could not. Tears started streaming down her face.

“It’s just… It’s just…” she managed to stammer.

The doctor waited patiently. “It’s okay,” she said. “Just take your time.”

Elizabeth took a deep breath. “It’s like I can’t manage my own mind anymore. It’s nonstop. It won’t turn off…”

More tears streamed down her face.

Patiently, with compassion, the doctor walked Elizabeth through what she might be experiencing. The doctor recommended a follow-up with Medwell’s psychology department.

“Okay,” Elizabeth said, some semblance of relief passing through her.

Unbeknownst to Dr. Johnson, her office door had not been completely closed. During the telehealth call, Evan stopped by his mother’s office to ask her a question. Before knocking he overheard Elizabeth talking and decided to listen in.

PART TWO: BETRAYAL

As Elizabeth was finding the courage to open up to Dr. Johnson about her psychological condition, Evan was recording her with his smartphone through a crack in the doorway.

Spurred by who knows what — his attraction to her, his irritation at being rejected, the idleness of the COVID quarantine — it really didn’t matter. Evan posted his recording of Elizabeth to his Instagram feed.

#CantManageMyMind, #CrazyGirl, #HelpMeDoctorImBeautiful is just some of what followed.

Elizabeth and Evan were both well-liked and very well connected on social media. The posts, shares and reactions that followed Evan’s digital betrayal numbered in the hundreds. Each one of them a knife into the already troubled soul of Elizabeth Cunningham.

By noon of the following day, her well-connected father unleashed the dogs of war.

Rand Davis, the risk manager for the Medwell Health System, a 15-hospital health care company based in Alexandria, Virginia was just finishing lunch when he got a call from the company’s general counsel, Emily Vittorio.

“Yes?” Rand said. He and Emily were accustomed to being quick and blunt with each other. They didn’t have time for much else.

“I just picked up a notice of intent to sue from a personal injury attorney in Bel Air, Maryland. It seems his daughter was in a teleconference with one of our docs. She was experiencing anxiety, the daughter that is. The doctor’s son recorded the call and posted it to social media.”

“Great. Thanks, kid,” Rand said.

“His attorneys want to initiate a discovery dialogue on Monday,” Emily said.

It was Thursday. Rand’s dreams of slipping onto his fishing boat over the weekend evaporated, just like that. He closed his eyes and tilted his face up to the heavens.

Wasn’t it enough that he and the other members of the C-suite fought tooth and nail to keep thousands of people safe and treat them during the COVID-crisis?

He’d watched the explosion in the use of telemedicine with a mixture of awe and alarm. On the one hand, they were saving lives. On the other hand, they were opening themselves to exposures under the Health Insurance Portability and Accountability Act. He just knew it.

He and his colleagues tried to do the right thing. But what they were doing, overwhelmed as they were, was simply not enough.

PART THREE: FALLING DOMINOES

Within the space of two weeks, the torture suffered by Elizabeth Cunningham grew into a class action against Medwell.

In addition to the violation of her privacy, the investigation by Mr. Cunningham’s attorneys revealed the following:

Medwell’s telemedicine component, as needed and well-intended as it was, lacked a viable informed consent protocol.

The consultation with Elizabeth, and as it turned out, hundreds of additional patients in Maryland, Pennsylvania and West Virginia, violated telemedicine regulations in all three states.

Numerous practitioners in the system took part in teleconferences with patients in states in which they were not credentialed to provide that service.

Even if Evan hadn’t cracked open Dr. Johnson’s door and surreptitiously recorded her conversation with Elizabeth, the Medwell telehealth system was found to be insecure — yet another violation of HIPAA.

The amount sought in the class action was $100 million. In an era of social inflation, with jury awards that were once unthinkable becoming commonplace, Medwell was standing squarely in the crosshairs of a liability jury decision that was going to devour entire towers of its insurance program.

Adding another layer of certain pain to the equation was that the case would be heard in Baltimore, a jurisdiction where plaintiffs’ attorneys tended to dance out of courtrooms with millions in their pockets.

That fall, Rand sat with his broker on a call with a specialty insurer, talking about renewals of the group’s general liability, cyber and professional liability programs.

“Yeah, we were kind of hoping to keep the increases on all three at less than 25%,” the broker said breezily.

There was a long silence from the underwriters at the other end of the phone.

“To be honest, we’re borderline about being able to offer you any cover at all,” one of the lead underwriters said.

Rand just sat silently and waited for another shoe to drop.

“Well, what can you do?” the broker said, with hope draining from his voice.

The conversation that followed would propel Rand and his broker on the difficult, next to impossible path of trying to find coverage, with general liability underwriters in full retreat, professional liability underwriters looking for double digit increases and cyber underwriters asking very pointed questions about the health system’s risk management.

Elizabeth, a strong young woman with a good support network, would eventually recover from the damage done to her.

Medwell’s relationships with the insurance markets looked like it almost never would. &

Bar-Lessons-Learned---Partner's-Content-V1b

Risk & Insurance® partnered with Allied World to produce this scenario. Below are Allied World’s recommendations on how to prevent the losses presented in the scenario. This perspective is not an editorial opinion of Risk & Insurance.®.

The use of telehealth has exponentially accelerated with the advent of COVID-19. Few health care providers were prepared for this shift. Health care organizations should confirm that Telehealth coverage is included in their Medical Professional, General Liability and Cyber policies, and to what extent. Concerns around Telehealth focus on HIPAA compliance and the internal policies in place to meet the federal and state standards and best practices for privacy and quality care. As states open businesses and the crisis abates, will pre-COVID-19 telehealth policies and regulations once again be enforced?

Risk Management Considerations:

The same ethical and standard of care issues around caring for patients face-to-face in an office apply in telehealth settings:

  • maintain a strong patient-physician relationship;
  • protect patient privacy; and
  • seek the best possible outcome.

Telehealth can create challenges around “informed consent.” It is critical to inform patients of the potential benefits and risks of telehealth (including privacy and security), ensure the use of HIPAA compliant platforms and make sure there is a good level of understanding of the scope of telehealth. Providers must be aware of the regulatory and licensure requirements in the state where the patient is located, as well as those of the state in which they are licensed.

A professional and private environment should be maintained for patient privacy and confidentiality. Best practices must be in place and followed. Medical professionals who engage in telehealth should be fully trained in operating the technology. Patients must also be instructed in its use and provided instructions on what to do if there are technical difficulties.

This case study is for illustrative purposes only and is not intended to be a summary of, and does not in any way vary, the actual coverage available to a policyholder under any insurance policy. Actual coverage for specific claims will be determined by the actual policy language and will be based on the specific facts and circumstances of the claim. Consult your insurance advisors or legal counsel for guidance on your organization’s policies and coverage matters and other issues specific to your organization.

This information is provided as a general overview for agents and brokers. Coverage will be underwritten by an insurance subsidiary of Allied World Assurance Company Holdings, Ltd, a Fairfax company (“Allied World”). Such subsidiaries currently carry an A.M. Best rating of “A” (Excellent), a Moody’s rating of “A3” (Good) and a Standard & Poor’s rating of “A-” (Strong), as applicable. Coverage is offered only through licensed agents and brokers. Actual coverage may vary and is subject to policy language as issued. Coverage may not be available in all jurisdictions. Risk management services are provided or arranged through AWAC Services Company, a member company of Allied World. © 2020 Allied World Assurance Company Holdings, Ltd. All rights reserved.




Dan Reynolds is editor-in-chief of Risk & Insurance. He can be reached at [email protected]