2016 Power Broker

At Large

Clout in the Market

Cara Cortes Vice President Aon, Pittsburgh

Cara Cortes
Vice President
Aon, Pittsburgh

Few things are more important to boards of directors and corporate officers than directors and officers coverage – and that is where Aon’s Cara Cortes excels.

One private equity portfolio company needed D&O coverage at the end of the month. They couldn’t get an extension and an application had yet to be filled out.

Two days before coverage expired, the company asked Chip Gutshall, CEO of Work Comp Strategic Solutions, another of the portfolio companies, for help. He immediately called Cortes, who raced to the rescue.

“She got a 60-day extension for the application,” Gutshall said. “That was awesome. She carries a lot of clout within the market to pull something like that off.”

Cortes has also been extremely helpful in D&O and employment practices liability claims, he said.

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“I wouldn’t trade her for anyone,” he said.

A risk manager in the Midwest said that Cortes “does a great job at matching up our exposure, our risk, with the best potential partners.

“We were able to significantly improve the coverage in several respects and to reduce the cost beyond what the [soft] market was.”

Cortes’ assistance with cyber coverage for St. Clair Hospital was what stood out the most for Linda Lattner, corporate compliance officer at the hospital.

Longstanding Expertise

Craig Howser Executive Vice President Alliant, Chicago

Craig Howser
Executive Vice President
Alliant, Chicago

There’s a limited market for professional lawyer liability, and Craig Howser is an expert at searching out the best specialized coverage for his clients.

“He’s at the top of my list as a business partner for our firm,” said Judy Vetkoetter, executive director of Gardere Wynne Sewell.

“He is really on top of our business and the kinds of challenges the legal industry faces. He is very connected and resourceful as far as market options go. I sing his praises.”

Instead of market-driven premium increases at renewal, Howser has been able to point out to underwriters the uniqueness of Gardere’s effective risk management to put together a solution that lowered the firm’s self-insured retention.

He is also a strategic thinker, introducing Gardere to new underwriters even when there wasn’t an immediate need. That approach paid off a few years ago when a previous lead underwriter decided to change its approach to insuring large law firms.

Howser assisted the Gibbons PC law firm when it left a captive program it had been with for 25 years and entered the commercial marketplace.

“We have saved millions and millions of dollars in premiums over the past few years,” said Patrick Dunican, chairman and managing director.

In addition, the firm’s coverage was broadened by a manuscripted policy form that included possible future exposures such as cyber liability or data breaches.

On the Cutting Edge

Randy Nornes Executive Vice President Aon, Chicago

Randy Nornes
Executive Vice President
Aon, Chicago

The risks and exposures of companies in the new sharing economy receive significant media attention and face uncertain regulatory demands.

Although many insurers steer clear of such high-profile risks, Randy Nornes was able to do “extraordinary work” in helping one such company gain the coverage it needed, according to a risk executive at a sharing economy company.

“He was really, really good. He is No. 1,” said the executive. “I can’t give you a lot of detail but he was able to help us develop things in the market from scratch from financial structure to policy writing.

“He connected us with the right resources to create something that the market was not very open to getting involved with,” he said.

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“His most important asset was to help insurers get comfortable with the risk,” the executive said.

And Nornes is constantly available. “He is like an ER, working 24/7. It is outstanding customer service.”

Nornes is also a crucial asset in helping clients and insurers better understand the risks associated with the Internet of Things. IoT risks are broader than the privacy, reputational and liability exposures typically included in cyber coverage, as IoT also includes physical risks.

One of the Team

Michael Falvey Executive Vice President Willis Towers Watson, Norfolk, Va.

Michael Falvey
Executive Vice President
Willis Towers Watson, Norfolk, Va.

Weis Markets Inc. lost its risk manager this year, but rather than replacing the position, it relied more heavily on the expertise and knowledge of Michael Falvey.

“He really goes above and beyond the normal insurance broker,” said Chris De Tray, director, safety and risk management, Weis Markets.

In addition to placing insurance and shepherding renewals, Falvey is “the best business partner out there,” helping Weis proactively deal with risk management concerns, including vendor risk transfer and safety reviews.

“He absolutely is an extension of our department and understands what our model is. He does a very, very good job of making sure we are not at risk,” De Tray said.

For the Virginia Port Authority, Falvey helped Chris Harrell, vice president, contracts and risk management, rebuild the insurance program “from the bottom up. When I say the program, I mean 3,000 employees, six marine terminals and every policy you can think of from executive liability coverage to auto to human resources to ships on terminal.

“When we rebuilt it, it consolidated a lot of things,” he said. “It was a big value add.”

Marti Dickman, vice president, risk management, ADS Waste Holdings Inc., said “the quality and level of performance we get from Michael is exceptional.”

Active in acquisitions, ADS has been challenged with the structure and poor claims history of some legacy programs.

Responsive and Knowledgeable

Jeanna Madlener Vice President, Senior Sales Executive Wells Fargo Insurance, Portland, Ore.

Jeanna Madlener
Vice President, Senior Sales Executive
Wells Fargo Insurance, Portland, Ore.

Whether it’s addressing workers’ comp issues or the diverse needs of nonprofit organizations, Jeanna Madlener is creative, responsive and knowledgeable.

“Jeanna is tremendous,” said Vincent Salvi, risk and compliance manager at Northwest Evaluation Association (NWEA), which provides educational services to associations worldwide.

The insurance requirements from some schools can be “quite unusual,” he said, but Madlener resourcefully helps NWEA work through those challenges.

Two challenges affecting The Dussin Group, whose restaurant portfolio includes the Old Spaghetti Factory, were workers’ compensation and letters of credit, said Dean Griffith, president.

“Our outstanding letters of credit were frustrating to us,” he said, noting that Madlener “worked very hard to get those down.”

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She was also instrumental in collaborating with the company’s medical provider to take responsibility for an expensive workers’ comp claim with reserves in excess of $250,000. The loss was decreased to just over $25,000, reducing the impact to Dussin Group’s premium expenses by more than 15 percent over the next three years.

Scrutinizing safety issues is also crucial, Griffith said. The company doesn’t want “rainbows and sunshine” from her store audits, he said. “A safe work environment is not just great on the cost side, but also for our people.”

Navigating Cyber Policies

Kaitlin Upchurch Managing Director Wortham, Houston

Kaitlin Upchurch
Managing Director
Wortham, Houston

Placing cyber policies is a complex undertaking, but for retail and health care organizations, that task is significantly more demanding. Kaitlin Upchurch nails it.

“She is just very, very good,” said Margot Roth-L’Heureux, global director of risk management, Whole Foods Market Inc. “She did a tremendous job.

“As anyone in the insurance world knows, cyber is not easy for anybody in retail,” she said. “You have to count on your broker to structure your program correctly and manage your expectations.

“Cyber has a lot of visibility with your officers and board right now. She brought good candidates to the table and different configurations for not only the best way to use money in our budget but to get us the best coverage,” Roth-L’Heureux said.

James Banfield, director of risk management/associate general counsel at Baylor College of Medicine, echoed those sentiments.

After years of self-insuring, Baylor wanted to explore going to market for cyber coverage. Upchurch took the lead, offering information and helping Baylor complete the “fairly extraordinary” applications.

When Baylor was dismayed about the prospect of completing each insurer’s separate application, Upchurch was able to convince the insurers to use a common document, with Baylor providing additional information if needed.

BlackBar

Finalists:

George Gionis, Account Executive, Aon

George Gionis, Account Executive, Aon

Thomas Sewell, Senior Vice President, Insurance Brokering Executive, Wells Fargo Insurance

Thomas Sewell, Senior Vice President, Insurance Brokering Executive, Wells Fargo Insurance

Patrick Walsh, Regional Executive Vice President, Arthur J. Gallagher

Patrick Walsh, Regional Executive Vice President, Arthur J. Gallagher

Peter Ballas CISR, Senior Broker, Aon

Peter Ballas
CISR, Senior Broker, Aon

Timothy Egan Senior Vice President, NY Global Property, Willis Towers Watson

Timothy Egan
Senior Vice President, Global Property, Willis Towers Watson, NY

 

 

 

 

 

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]