Canadian companies plan to grow, but may not have the right coverage for related risk exposures: Chubb

A study for Chubb Insurance Company of Canada suggests Canadian companies are planning growth strategies in light of a tentative economic recovery, but they haven’t prepared to cover additional exposures related to growth with appropriate insurance policies.
Canadian research firm Pollara conducted the 2010 Private Company Survey in early 2010. The survey included interviews with specialty insurance decision-makers at 296 Canadian for-profit, private companies and 451 in the United States.
The survey found that 59% of privately held firms planned to add employees, 60% planned to broaden their product or service offerings and 23% anticipated mergers and acquisitions (M&A) activity.
“While such actions spur business growth for private companies as they continue to recover from difficult economic circumstances, they may also increase exposure to liability claims and lawsuits,” Chubb notes in a press release about the survey. “One of the key findings of the survey was that private companies expect financially damaging events to occur, but only one in four companies have purchased management liability, professional liability, or crime policies to guard against such events.
“The survey indicated that executives may have a misplaced belief that these exposures are being managed by other insurance policies.
“While other policies may provide some protection, they do not normally provide the breadth of coverage or capacity of a specialty product.”
Twenty-five percent of respondents indicated an employment practices liability (EPL) lawsuit was the loss event that would cause the most financial damage to their company.
Others cited Errors & Omissions (17%), employee theft (16%), a breach of electronically-stored private customer data (9%) and Directors and Officers (9%) as the most potentially damaging.
Select findings are available in an executive summary at:

http://ecno.com/PrivateCompanySurvey/CHB15178PrivCoSurExec10.pdf