March 6, 2018 by Greg Meckbach
Risk managers concerned about insurance exclusions should consider asking their brokers to brief senior managers explaining what exactly the insurance covers and what it excludes, a Willis Towers Watson executive advises.
Steve Sachs, co-chair of the Willis Towers Watson Real Estate Practice, tells risk managers after they buy a policy to “have the broker do a policy workshop for you,” Sachs said Monday in an interview. “Have yourself, your general counsel [attend]…and actually go through the policy and go through what it covers and then go through the limitations and exclusions,” said Sachs, who is scheduled to present April 18 at the Risk Management Society’s annual conference in San Antonio, Texas.
“What would scare me as a risk manager on [the] cyber [file] is seeing my task as getting [the organization] to buy cyber insurance and then having a loss and it’s not covered,” said Sachs.
To prevent that scenario from occurring, he said he would make sure he got together with senior management (such as a general counsel and information security officer) and go through every line in their cyber insurance policy “to make sure what I just paid this money for will actually respond when someone has a loss. So you don’t have an insurance carrier saying, ‘That wasn’t covered. Sorry.’”
Scheduled to co-present with Sachs is Tim Kraft, risk manager for JBG Smith Properties, a Washington, D.C. area real estate firm. “I have a scheduled monthly meeting with our insurance committee, chaired by our chief legal officer,” Kraft said. “Every month at the meeting, we do a cursory overview to examine what each of our coverages are, with a real specific focus on the exclusions. And it’s been very very enlightening.”
JBG Properties does not have exposures such as coastal wind, earthquake or mudslide, Kraft said. “That does not mean that from time to time we don’t have some risk. For example, over the weekend we had 65 mph winds throughout the D.C. area and I had half a dozen incidents happen.”
Canadian Underwriter is a sponsor of the RIMS 2018 Annual Conference & Exhibition, taking place April 15-18 in San Antonio, Tex. To register or obtain more information, visit the event website.