Tag Archives: liability insurance

Who’s liable for electronic scooter accidents?

Dockless electronic scooter (e-scooter) sharing programs are the new era in micromobility. However, scooter-sharing companies are drawing fire from injured pedestrians and a concerned medical community. A recent Consumer Reports investigation documents at least 1,500 injuries and eight deaths related to rented e-scooters in the United States since late 2017. Hundreds of riders have landed in emergency rooms with injuries ranging from cuts, sprains, and bruises to bone fractures and head injuries.

E-scooter sharing also introduces new insurance implications. Traditional policies have not kept up with the micromobility revolution, although most e-scooter riders assume they’re covered for liabilities and personal injuries. With e-scooter accidents on the rise, insurance gaps need immediate attention and innovative solutions for on-demand, usage-based transportation. In this article, Milliman actuaries Abby Sternberg and Anthony Pinello delve into the new world of e-scooters. They examine injuries associated with e-scooters and potential litigation. The authors also compare e-scooters with bicycles and bike shares and talk about what e-scooter companies can do to mitigate risk.

Liability considerations for arming school personnel

School districts and legislators across the United States are considering how best to protect children and school staff from gun violence at schools. At least 24 states across the country have policies that allow security personnel to carry weapons in schools, and at least nine states have policies that allow other school employees to do the same.

Arming school staff and allowing guns in schools pose challenging risk and liability issues. As with any legislation, the ramifications of a new policy can be complicated, and there are a variety of factors that governments and school boards must weigh as they debate this issue. This paper examines risk and insurance considerations for school districts and legislators tackling this difficult subject across the United States.

Uninsured subcontractors can increase insurance costs

Subcontractors benefit companies in various industries like utility and construction with specialized knowledge to ensure product quality at a lower cost. However, these companies need to consider the additional liability risks associated with a subcontractor’s work and safety. Careless subcontractors that do not obtain proper insurance coverage can increase a company’s liability and negatively affect its financial results.

What types of insurance coverage does a subcontractor need? What happens when a subcontractor is uninsured without a company’s knowledge? Milliman’s Rachel Soich provides the answers in her article “Subcontractors: How a common business practice could lead to a mountain of insurance costs.”

Infographic: Insurance for craft brewers

April 7th marked National Beer Day, in honor of President Franklin Roosevelt signing a law on that date in 1933 to once again legalize the brewing and selling of beer. It was one of FDR’s first steps toward ending prohibition.

Today, craft beer is a growing market, with the number of small and independent operating breweries in the United States totaling 5,301—a 16.6% increase over the year before. But as with any small, closely held business, this expanding industry faces some unique liabilities. The infographic below is based on an article by Milliman consultant Michael Henk, which examines some of the liabilities that both craft brewers and insurers should consider in order to minimize the financial impact of the risks they face.

Curtail ACA’s potential impact on self-insurance programs

The long-tail nature of professional liabilities and workers’ compensation claims make it difficult to gauge the effect that healthcare reform will have on self-insurance. A plan of action is needed though to help organizations value their self-insurance programs. Milliman’s Richard Frese recently authored an article in HFM magazine offering five strategies for lessening the impact of the Patient Protection and Affordable Care Act (ACA) on self-insureds.

Here is an excerpt:

Healthcare leaders will be better prepared to ensure that actuarial estimates will meet loss accruals and forecast needs by implementing these strategies.

Inform all parties of legislation updates and implementation. Although the components of the ACA have been determined, implementation has hit a few snags. Even with a strong effort to explain the proposed changes to the public, there have been multiple interpretations. Further clarification and revisions—and even repeal—are possible. Healthcare leaders should focus on keeping all parties—including the broker, actuary, auditor, third-party administrator, outside defense counsel, and captive management—involved in the self-insurance program apprised of any changes. In return, these parties also should communicate any changes with each other and with the organization’s senior leaders.

Gather opinions from various sources. Senior leaders of each provider organization may not share the same views as leaders of other organizations regarding how the ACA may affect their organization’s role and function. The leaders of each organization will want to ensure the organization’s service providers are on the same page and are working toward its goals and directions, particularly if strategic goals and directions have been revised because of the ACA. During these conversations, leaders also should share their interpretation of what is occurring in the industry.

Monitor loss activity. Healthcare leaders should work closely with risk managers, third-party administrators, and other claims personnel to track any changes in frequency and severity of reported claims. Service providers should be alerted immediately about any noticeable changes. It should be noted whether such changes are believed to be due to the ACA or a different cause, such as a change in claims handling. It will be critical to determine whether any loss change reflects an actual trend and is expected to continue or whether the change is related to a one-time event. Internal meetings also might be held more frequently to better monitor activity.

Fracking exposures could create large liability claims

There has not yet been any environmental accident related to hydraulic fracturing (fracking). Still the potential for enormous liability claims exists. Milliman’s Jason Kurtz offers perspective regarding the financial effects that ecological contamination caused by fracking may have on a company in this Business Insurance article (subscription required):

Jason B. Kurtz, a consulting actuary at Milliman Inc. in New York, said past water contamination cases in other industries, such as those that involve gasoline additive MTBE, demonstrate how costly such events can be.

“If these types of things do manifest themselves, some of the companies involved (in fracking) may not be big enough to fully absorb the financial hit,” he said. “Regulators should be aware of that.”

Regulators overseeing fracking might want to look to insurer solvency requirements as a guide to requirements that could be imposed on companies involved in hydraulic fracturing that would ensure they have sufficient resources, either through their own funds or insurance, to cover groundwater contamination claims, Mr. Kurtz said.

Kurtz also details some insurance related uncertainties involved with fracking in his co-authored paper “Fracking: Considerations for risk management and financing.” Here is an excerpt:

A current lack of insurance capacity may be due to a lack of historical demand. Fracking-related energy production will be around for a long time, with many thousands of wells expected to be drilled in the next several decades, but as this technology is just starting to become more widespread, there may be a temporary lack of capacity as insurers increase their familiarity with the unique aspects of fracking exposures in a particular location.

…If insurers are too concerned about high pollution liability for fracking exposures, perhaps it’s worth evaluating the particular situation to see whether the pollution risk could somehow be further reduced or, at the extreme, avoided. A lack of insurance availability for certain energy companies in a region may be a signal that the likelihood of major pollution losses is too high, either because best practices are not being followed or because of the complexities associated with the use of fracking in that region.