Sunday, December 12, 2010


This is amazing video.  Who would've thought they'd ever see the Metrodome collapse?  What are the owners looking at with regard to this type of loss?

For one, the damage to the Building and indoor Business Property should be covered as most Property policies do cover loss due to weight of rain, ice or snow.  However, a policy written in Minnesota may contain certain limitations for snow losses.  Their insurance company might have them to take certain precautions to prevent such a loss.  If those precautions weren't taken, then the policy may not pay for the damages.  An insurance nerd like me is interested in this.

Two, this is direct physical damage to the property, and it will be some time before they can host events in the Metrodome.  Therefore, they will need coverage for Loss of Income.  Loss of Income normally pays for the loss of net income plus ongoing expenses incurred when a business can't operate after this type of loss.  The NFL had to move the Vikings/Giants game to Detroit.  How much revenue is lost there?

Wednesday, September 1, 2010

UPDATE: With Hurricane Warnings In Effect for Parts of East Coast, FEMA Urges Preparedness

See below for FEMA Hurricane warnings...


What does Jimmy do all day?  Follow him:

Sent using BlackBerry

-----Original Message-----
From: Daily NewsFlash <>
To: Jimmy Norton <>
Sent: Wed Sep 01 16:56:46 2010
Subject: Breaking News - UPDATE: With Hurricane Warnings In Effect for Parts of East Coast, FEMA Urges Preparedness

Breaking News - : With Hurricane Warnings In Effect for Parts of East Coast, FEMA Urges Preparedness - Daily NewsFlash
If you are having issues viewing this e-mail, click here <>  to see it in your browser.

UPDATE: With Hurricane Warnings In Effect for Parts of East Coast, FEMA Urges Preparedness - Source - FEMA      
Hurricane Earl <>        
As Hurricane Earl moves toward the East Coast of the United States, the Federal Emergency Management Agency (FEMA) is taking aggressive actions to prepare for the storm and is coordinating closely with state and local officials along the East Coast to help support their response as needed. FEMA is also encouraging all East Coast residents to take steps now to prepare for possible severe weather in the coming days.

According to the National Hurricane Center (NHC), Earl is currently a Category 3 hurricane, and a hurricane warning has been issued for the North Carolina coast from Bogue Inlet, N.C. north to the North Carolina-Virginia border. In addition, a hurricane watch is in effect from the North Carolina-Virginia border north to Cape Henlopen, Del. and a tropical storm warning is in effect from Cape Fear, N.C. to west of Bogue Inlet N.C. As the storm moves closer, FEMA is closely coordinating.

Local officials in North Carolina have issued mandatory evacuations for visitors to Hatteras Island and Ocracoke Islands. As is always the case, state and local officials make decisions on issuing evacuation orders. FEMA encourages all residents and those visiting the East Coast to pay close attention to local updates and heed evacuation orders should they be issued.

"We continue to monitor Hurricane Earl and remain in close contact with state and local officials from North Carolina to Maine to ensure they have the resources to respond if needed," said FEMA Administrator Craig Fugate. "I encourage everyone along the eastern seaboard to visit and take steps now to keep their family safe and secure. The most important thing for people to do right now is to listen to and follow the instruction of their local officials. If you are told to evacuate, evacuate."

Information on what individuals and families can to prepare for an emergency, including flash flooding and other severe weather that frequently accompanies hurricanes, is available at <> . A Spanish version of the website is available at

Since this weekend, FEMA has been in constant contact with the White House and Department of Homeland Security (DHS) to provide regular updates on the storm's developments. Earlier today, Administrator Fugate briefed President Obama on FEMA's preparations for potential impacts of Hurricane Earl on the East Coast and New England, and close coordination with state and local officials in potentially affected states from North Carolina to Maine. FEMA is continuing to monitor the storm's movement in conjunction with the National Hurricane Center, and has deployed teams to North Carolina and other East Coast states to support storm preparations as well as response and recovery efforts as needed. FEMA has also prepositioned commodities for rapid delivery, including water, meals, tarps, blankets, generators and other essential items.

Administrator Fugate also briefed the President on the impacts from Hurricane Earl on Puerto Rico and the U.S. Virgin Islands, both of which have had FEMA teams on the ground since the weekend supporting the Governors' efforts related to the storm.

The National Weather Service forecasts the center of Hurricane Earl will move well east and northeast of the Bahamas today, and approach the coast of North Carolina by Friday morning. Officials are closely monitoring the areas from the Carolinas to New England, and FEMA is coordinating with the Governors and local officials along the East Coast to aggressively prepare for possible severe weather. Even if a hurricane does not make landfall, severe weather and flash floods can occur miles inland. In addition, dangerous surf conditions and rip tides are expected along the cost, and swimmers are encouraged to follow closely the instructions of local officials and lifeguards.

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Monday, August 30, 2010

Seat Belt Stats

Each day, I check out a Daily Insurance Calendar for interesting insurance facts. I don't just make this stuff up, people. I do have my sources! Here's an interesting seat belt stat:

The National Highway Traffic Safety Administration reported U.S. seat belt rate
at 82%. Hawaii led the nation with 95.3%, followed by Washington state and
Nevada. Mississippi had the lowest rate at about 60%, followed by Massachusetts
and Kentucky. According to estimates by the Department of Transportation, the
82% national seat belt rate saved 15,700 lives and prevented 350,000 serious
So be sure to buckle up.  The odds are in your favor.

Wednesday, August 25, 2010

Deepwater Horizon and Its Effects on Fiduciary Liability

Fiduciary Liability describes a company's exposure to employee claims concerning their retirement plans.  For example, employees may allege that their employer did not provide access to successfully-performing funds, thereby reducing the amount of the employees' potential pensions.  The employee must prove that their employer did not fulfill their duty to allow the employee every opportunity to grow their company retirement plan.

What do employers do when employee retirement accounts buy heavily into company stock and that company stock takes a dive?

BP is going to find out...  HartfordHelp: ERISA and The Deepwater Horizon Disaster

Friday, August 20, 2010

Data Destruction: The Only Way To Be Sure

Sure, you've emptied your Recycle Bin, but is the data really gone? PC Recycler shows us the only way to be sure that no one can access data on your old hard drive. Click the following link to behold the destruction!

Blog - Hard Drive Shredding Video

Wednesday, August 18, 2010

Driver Distraction of the Furry Kind

The AAA Foundation for Traffic Safety issued a report detailing the dangers of driving with your dog in your lap.  I've done it lots of times.  I'm sure you have, too.  However, this common practice poses dangers for you, your passengers and your best friend.

From CNN Money:  Caution: Dogs Behind Wheel

Here's an excerpt:
One third of dog owners admit that their pets sometimes distract them while they're driving, according to a AAA Foundation for Traffic Safety survey of people who say they have driven with their dog in their car within the past year.

More than half admit to petting the dog while driving. And 21% say they allowed their dog to ride in their lap. A few said they've done things like playing with their dogs or giving their their dogs water, all while driving.

Monday, August 16, 2010

More Flood Facts

In yesterday's post (I LOVE INSURANCE! Do You?: Fairfax VA Redraws Its Flood Map), I referenced a Washington Post article about Fairfax County, VA's redrawing of its flood zones. I also mistakenly stated that the article was incorrect in stating that some independent insurance carriers can charge higher rates than those dictated by the NFIP.  Companies can charge their own rates when they issue Excess Flood policies.  Details below.

I found a great summation of some of the Flood Insurance basics today by the Insurance Information Institute. For the full article, click here. Here's an excerpt describing the pertinent facts:

Flood insurance covers direct physical losses by flood and losses resulting from flood-related erosion caused by heavy or prolonged rain, coastal storm surge, snow melt, blocked storm drainage systems, levee dam failure or other similar causes. To be considered a flood, waters must cover at least two acres or affect two properties.

Homes are covered for up to $250,000 on a replacement cost basis and the contents for up to $100,000 on an actual cash value basis. Replacement cost coverage pays to rebuild the structure as it was before the damage. Actual cash value is replacement cost minus the depreciation in value that occurs over time. Coverage for the contents of basements is limited. Coverage limits for commercial property are $500,000 for the structure and another $500,000 for its contents.

Excess flood insurance is available from some private insurers for NFIP policyholders who want additional coverage or whose communities do not participate in the program.

Previous Flood Posts:

Fairfax, VA Redraws Its Flood Map

Flood Insurance Facts

FEMA's Statement Regarding Damage Caused By Oil in Flood Waters

Sunday, August 15, 2010

Fairfax VA Redraws Its Flood Map

Flood Insurance is rarely in the news. So, imagine my surprise when I see it on the front page of Saturday's Metro Section of The Washington Post.

The County of Fairfax in VA recently redrew its Flood maps. This revamp caused some areas to now be considered flood zones. Owners of properties in flood zones are often required to purchase flood insurance by their lenders. If you live in one of the new flood zones in Fairfax County, you might be getting a call from your lender soon.

Here's a link to the full article on The Washington Post's site:

Flood & Water damage are standard exclusions on Homeowners & Commercial Property policies. Individuals and businesses purchase Flood insurance through insurance carriers approved by the National Flood Insurance Program (NFIP).  The insurance companies collect the premiums, issue the policies and adjust the claims; but the NFIP pays the claims. All rates, zones, & coverages are dictated by the NFIP. The article mistakenly states that private insurers can charge more. As I understand it, carriers can only charge the federally-dictated rates.

For more on Flood Insurance, see my prior post:  Flood Insurance Facts.

Monday, August 9, 2010

PC Recycler Receives AAA Certification

For the 6 people who read this blog, you know that I write a lot about Information Security and the liability exposures that many businesses face.  One of my clients is in the Information Destruction business, and they were recently recognized by their industry for being so good at it.

Congratulations, PC Recycler, in Chantilly, VA!  They shred and wipe old hard drives, then send electronic parts off to be recycled.  It is a very necessary and earth-friendly service.  Keep crushing those hard drives!

Here's a blurb about it:
PC Recycler Receives AAA Certification

PC Recycler, Inc. received AAA certification from the National Association for Information Destruction (NAID) for Computer Hard Drive destruction. PC Recycler sought to achieve this goal of certification for the protection of your business and the environment. NAID is a nationally-recognized authority on secure data destruction with hundreds of members across North America. NAID's mission is to promote the information destruction industry and the standards and ethics of its member companies.

Wednesday, August 4, 2010

Heat Wave Preparedness Tips from the American Red Cross

The heat in the DC area this Summer has been OPPRESSIVE.  Many of us trudge forward, knowing that it's just another DC Summer.  However, we need to pay attention to the warning signs of Heat Stroke, Heat Cramps, and Heat Exhaustion.

Penn Millers Insurance Company posted a link to the American Red Cross's recommendations on what to do during a heat wave (link below).  The ARC's page also includes a Heat Wave Safety Checklist that defines the 3 main heat-related ailments and offers tips for general care.  This is recommended reading for yourself, your family and your employees.

What should I do during a heat wave?

How do you get out of the heat?

Friday, July 30, 2010

Schedule Your Valuable Items on their own Policy

Super Fantastic Insurance Fact:

Homeowners' policies have sublimits for valuable items, like jewelry, antiques, firearms, fine art, etc. These valuable items should be scheduled on an Personal Articles Floater to ensure that you'll get the proper replacement value in the event of a claim.

Friday, July 23, 2010

Make Sure Your Auto is Comped!

Super Fantastic Insurance fact of the Week:

On your Auto policy, Comprehensive coverage pays for physical damage to your car when it's parked, i.e. falling tree, hail, theft, vandalism. Insurance companies also pay claims for windshield damage and animal strikes under Comp. Collision coverage is physical damage caused by anything you hit while moving (except animals).

Friday, June 25, 2010

Seven Manufactures announce crib recalls

Good information received from our day care provider.  See below.

Good Evening Parents:

Two million cribs are being recalled today.

Please check out the link above and double check the crib that your povider is using as well as your cribs at home.  I have forwarded this same recall notice to the providers since we all need to work together.  During my visits I will be checking for these as well!  The recalling firms are providing consumers with free repair kits to immobilize the drop down sides. Please let me know if you have any questions.

Have a great evening!

Shauna Skerman, BA
Child Care Resource and Referral Specialist
Infant/Toddler Family Day Care
11166 Fairfax Blvd., #206
Fairfax, Virginia 22030
703-352-3449 x118
Toll Free: 877-321-0997
Fax: 703-352-7730

Become a Part of Our Family

Monday, June 14, 2010

FEMA's Statement Regarding Damage Caused By Oil in Flood Waters

We have been receiving many questions regarding the potential for oil in the flood waters. FEMA has posted a bulletin on their position in this matter. Please read the attached bulletin.

Oil in Flood Water

Saturday, June 12, 2010

Why's My Auto Rate So High?

Well, there could be 20 different answers:
Insurers use as many as twenty factors to underwrite auto insurance policies. All things being equal, an auto policy holder will pay less if any of the following conditions apply: clean driving record, reside outside an urban area, credit rating is high, age 25 or older, female, married, make and model of vehicle is not prone to theft or is not considered high-performance.
Today's quote from the Insurance Daily Calendar

Friday, June 11, 2010

Wage and Hour Claims Could Affect Your Business!

Employment Practices Liability is a specialized insurance policy that protects employers against employee claims, including discrimination, harassment and wrongful termination. This coverage has been in the marketplace for the better part of the last 20 years. Companies offer the coverage either as a monoline policy or an endorsement to an existing Liability policy.

EPL policies often exclude coverage for "Wage and Hour" claims brought by employees. Wage and Hour responsibilities are dictated by the Fair Labor Standards Act of 1938.  Examples of such claims include:
  • Failing to pay overtime
  • Paying overtime at regular wage rates
  • Failing to pay minimum wage
  • Failing to provide commission to salespersons
  • Failing to make or delaying payment of an employee's final check
We've recently learned that the Department of Labor has been stepping up its efforts to educate employees about their responsibilities and to penalize employers in violation. The following facts were provided by Professional Liability Insurance Services, Inc.  They are a wholesale broker that we retail agents can approach for specialized coverages.
In April 2010, the Department of Labor launched the "We Can Help" campaign to assist employees in filing these claims.  
The DOL is launching a series of posters, booklets and PSAs to educate workers about their rights.
The DOL has ceased providing "opinion letters" to employers to help them stay in compliance with regulations.
Non-government wage & hour settlements increased 44% in 2009 over 2008.
Is your company at risk for this type of claim?  Here's how to proceed:
  1. Educate yourself about your responsibilities under the law.  DOL FLSA Compliance Assistance
  2. Check your Employment Practices Liability (EPL) policy to see if it excludes Wage & Hour claims.
  3. If it does, talk to your agent about adding the coverage back by endorsement.  This can usually be done for some additional premium.  Whenever there's an exclusion, there's usually a way to buy the coverage back

Tuesday, June 8, 2010

Insurance Discounts for Green Features in your Home

As Green awareness spreads, I've found that many insurance carriers have been slow to respond. Over the past year, I have surveyed several of the carriers that I represent to see if they offer any customized coverages for Green homes or buildings. Several have developed endorsements; but some have yet to join the party.

Southern Insurance Company (a member of the Donegal Insurance Group) is one of the Green leaders on the Personal Insurance side.  They offer a 5% Solar Energy discount and a 5% Geothermal Heat Pump discount for Homeowners who have this equipment.  I was surprised to find that many larger carriers do not offer such discounts.

Click here for Southern's announcement about the new credits for Virginia policyholders.  Southern offers these credits for policyholders in other states as well.  For more details, ask your agent.

Friday, May 28, 2010

Thank you, Burke Nursery, for renewing with us for the 10th year! We really appreciate your business.

Thursday, May 27, 2010

What is Tail coverage?

In the world of D&O, E&O and other types of Claims-Made policies, "Tail coverage" or an Extended Reporting Period is an extended window of time in which a policyholder can report a claim.

Professional and Management liability claims have long "tails" on them. A wrong can occur in 2008 and not be realized until 2009. Once a claim is filed for that wrong, which policy responds: 2008 or 2009?

Claims-made policies state that the policy in effect when the CLAIM is MADE will be the policy to respond. As such, if the policy doesn't renew, then the coverage window ceases.

In the above example, a wrong occurred in 2008 and was discovered in 2009. If the insured chose not to renew their 2009 policy, then he or she would not have a policy to cover that claim - even though the wrong occurred in 2008, when they did have a policy in effect. Get it?

When a Claims-Made policy cancels or is not renewed, the policyholder has the option to purchase an Extended Reporting Period (ERP or Tail), which will extend that window allowing him/her to report claims resulting from activities when the coverage was in force.  Any agent worth his or her salt should recommend an ERP to clients once a Claims-Made policy ends.

Wednesday, May 26, 2010

The Hartford is 200 years old

Congratulations to The Hartford Insurance Group! They are one of my insurance markets, and The Hartford is celebrating its 200th birthday this month. Hartford was incorporated on May 10th, 1810.

Did you know that Abraham Lincoln purchased a fire insurance policy from The Hartford to protect his home in Springfield, IL? He bought the policy in 1861, shortly after he had been inaugurated as President.

Hartford has been a reliable company partner for us. Congratulations on 200 years. You look great!

Monday, May 24, 2010

working on an insurance quote for an Italian restaurant. I'll quote it anytime you want...

The Better Insurance Update - Spring 2010

I just sent out the Spring 2010 edition of my e-newsletter.  I use it to summarize recent blog and Twitter posts.  Insurance never sleeps!
Better Insurance Knowledge for all from Brock-Norton Insurance Agency 
Spring 2010 
In This Issue
The Dangers of Distracted Driving
Build Your Network
Recent Tweets
Quick Links
Forward to a Friend
Follow us on Twitter
Find us on Facebook
View our profile on LinkedIn
The Dangers of Distracted Driving
Do your employees drive company vehicles?
Do they use company-issued cell phones?

DID YOU KNOW:  If your employee causes an accident while using a cell phone for work, then your company can be held liable?

The best defense is a written corporate policy that regulates employees' cell phone behavior behind the wheel.  My client, ZoomSafer and I prepared a white paper to assist companies in developing these policies.
An effective cell phone usage policy should contain:

 Mission statement
 Definition of prohibited behaviors
 Employee/driver acknowledgement statement
 Enforcement and discipline guidance
Once you have a policy, be sure to enforce it.  If managers don't take it seriously, the employees won't either.
 Click here for more details...
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Build Your Network, Build Your Business
Looking to build your business?
Want a dedicated team of professionals who are actively looking for new opportunities for you?
PNG meets Thursday mornings, 7:45 - 9:00 am in the ASCE/Bechtel Conference Center in Reston, VA.

Recent Tweets

issuing Performance bonds for 2 clients: a construction firm & security co. Opportunities are out there for company growth. Optimism growing 11:40 AM May 21st
wrote Liability & Property for a commercial investor with 3 buildings in Chantilly, VA. Improved his coverage & saved him $2000/yr. 1:18 pm May 18th
Workers comp insurers in 'precarious position': NCCI. Large losses in 2009 & lower rates meant carriers lost money.
9:49 am  May 13th 

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Brock-Norton Insurance Agency | 14120 Parke Long Court | Suite 205 | Chantilly | VA | 20151

Sunday, May 23, 2010

Nonprofits, Don't Expose Your Ds and Os!

Serving on the Board of a Nonprofit organization is a big step.  You're dedicating your time and energy to a worthy cause.  However, you may not be aware that you are also exposing your personal assets to liability claims.

If you serve on the Board of a Nonprofit organization, ask the organization how it will protect you if you are named in a Liability suit.  Directors & Officers Insurance protects Board members individually if sued for mismanagement of the organization.  Many smaller nonprofits have tight budgets and choose to go without this protection.

Directors & Officers Insurance sounds expensive, and it sometimes can be.  However, if you're a small organization, you may be surprised at how affordable the coverage can be.  Ask an agent about it.

One of my brokers, Victor O. Schinnerer & Company, Inc., developed a great article on the dangers of going without D&O coverage.  This is required reading.

8 Compelling Reasons to Insure Your Non-Profit Organization

Here are some snippets:
Reason #2:  Insurance protects your organization’s assets, as well as the personal assets of people that sit on the board.  Remember, even frivolous claims cost you time and money to defend yourself.

Reason #4:  Staying continuously insured could reduce your costs.  Firms that renew their coverage may be eligible to receive longevity credits just for staying continuously insured in our program.

Reason #5:  Buying and keeping Directors & Officers coverage is a much better option than relying on the Volunteer Protection Act for help.  The Act/Law does not prevent a volunteer from being sued. In addition, compensated individuals (the most obvious being compensated employees and directors or officers) are not provided protection under the law.

Friday, May 21, 2010


We're seeking a Personal Lines Insurance producer/CSR to service & grow the existing book of Home & Auto policies. Salary plus commissions.  Email me ( for details.

Friday, April 30, 2010

Distracted Driving: How to Create and Enforce Policies that Reduce Corporate Risk

I collaborated with one of my clients, ZoomSafer, on an important report for any company with cell phones and vehicles.  Our opus is titled "Distracted Driving:  How to Create and Enforce Policies that Reduce Corporate Risk."  
As a Commercial Insurance Agent, I provide Auto insurance to companies with fleets of vehicles, from 1 truck to 100.  When a company paints their name onto the side of a truck, that vehicle becomes a moving billboard. . .and a moving target.  The company's reputation, finances and insurance rates depend on how that truck operates. 

Who did they hire to drive that truck? 

What is that person's background?

What are they doing while they're behind the wheel?

Companies are often held liable for the behavior of their drivers.  Claims range from broken windshields to loss of lives.  My goal is to keep those trucks between the dotted lines, moving straight and steady.  I work with clients to tighten up their safety programs, check driving records and monitor driver behavior.  

Drivers who text, talk and surf on their cell phones are a big risk to all of us.   

ZoomSafer shares my same goal.  They developed an application that silences cell phones while vehicles are in motion.  Calls are sent to voicemail.  Text and email notifications go silent.  Permissions can be adjusted for priority calls and texts, but the intent of the service is to silence the distractions.  I use the service myself, and it does work.

Employees need to use phones for work.  If an employee causes an accident while using their phone for work, then the company can be held liable for the resulting damages.  The company can be held liable.

The best defense is a written corporate policy that regulates employees' cell phone behavior behind the wheel.  Together, ZoomSafer and I prepared a white paper to assist companies in developing these policies.
An effective cell phone usage policy should contain:

 Mission statement
 Definition of prohibited behaviors
 Employee/driver acknowledgement statement
 Enforcement and discipline guidance
Once you have a policy, be sure to enforce it.  If managers don't take it seriously, the employees won't either.

You can download this paper for free at ZoomSafer's website.  Enter a few details to access the white papers section.  Select the one with the above title.  I hope that this paper will be of help to your company.  Please don't hesitate to contact me or post a reply with questions.

From PC Recycler: Keep your computer safe and your data safer...

Great info about information security from one of my clients, PC Recycler, in Chantilly, VA.

PC Recycler's New Mobile Degausser

PC Recycler, Inc. introduces a new mobile data security solution – the Data Security HPM-1 Degausser. [This unit] meets National Security Agency (NSA) requirements for purging classified information on hard drive media. Along with hard drives, this degausser also accepts floppy disks, zip disks, and tape media including DLT, LTO, 8mm and DDS. This machine is a high-performance...

Read the Full Story

Your Copier and Identity Theft?

Making a copy on the Xerox machine at work seems like a pretty mindless task – doesn’t it? The copier scans the pages and spits the very same pages back at you. But did you know that these copiers hold more information than you think they do?...

Read the Full Story

TSI is Now One of Virginia's Fantastic 50!

Congratulations to my client, Transformation Systems, Inc.!  Please read about the below...


What does Jimmy do all day?  Follow him:

Sent using BlackBerry

-----Original Message-----
From: Teresa Hartnett <>
To: <>
Sent: Fri Apr 30 10:13:56 2010
Subject: TSI is Now One of Virginia's Fantastic 50!

On <<VA FAN 50.pdf>> behalf of Marta Wilson, I am delighted to share the news with select colleagues and friends of TSI.

Last night, the Virginia Chamber of Commerce announced that TSI has been ranked as #39 of the top growth companies in the Commonwealth of Virginia. TSI is now one of Virginia’s Fantastic 50.

The Fantastic 50 Award is the only statewide competition for Virginia (privately owned) companies recognized for their growth and community citizenship. This year was especially competitive, with a very high number of nominations from all corners of the commonwealth. Other companies in the Fantastic 50 include ITA International, BOSH Global Services, Suntiva and The Tauri Group. Three-year growth rates ranged from 153% to 5,779%.

TSI ranked #39 of the top 50, as it ranked #1810 of Inc Magazines’ top 5000 companies in America as well. It is the first time TSI has won the Fantastic 50 award, recognizing the impact of both growth through professional excellence and our shared commitment to community service.

Along with the Inc5000 ranking and Washington Business Journal’s recognition, this award honors our own staff but also the inspiration and support we receive from our colleagues and friends. For this reason and many others, we are pleased to be your neighbors in this vibrant economic region.

For more information, please feel free to see our full-page ad in the May issue of VIRGINIA BUSINESS, or, for a quick look, here is a link:

If you haven’t visited our website recently, check out the launch of this year’s Virtual Community Help Initiative, about which you’ll hear more details in the coming months.

Thank you for your friendship and continued support!


TSI - Keeping Leaders In Motion 

Teresa Hartnett

Director of Strategic Initiatives | Transformation Systems, Inc.

2011 Crystal Drive  |  Suite 400  |  Arlington  |  Virginia  |  22202-3709

v  703.682.6853  | <blocked::blocked::blocked::

Click to see TSI’s new book, Leaders in Motion, now available at Amazon <blocked::blocked:: <<image001.png>> r=8-1>


Sunday, April 25, 2010

A Quick & Dirty E&O Sketch

Errors & Omissions Insurance is a large nebulous title. It’s not one of those policies that rings with concrete meaning like Auto, Homeowners, and the ubiquitous Life Insurance. Errors & Omissions policies essentially promise to pay damages due to “wrongful acts” that are not excluded in the policy. Nice and concrete, don’t you think?

Coverage is not stated.  Rather, it is implied by the language outlining what is not covered.

Have you ever tried to read one of these things? It takes me a while, and I’m in the business!  I’ve read my share, and so I feel that I can provide a sketch for the major points common to most E&O policies:

INSURING AGREEMENT – Part 1: Wrongful Act

This is where the carrier tells you that they will pay damages because of a claim resulting from your wrongful act. Damages, Claim and Wrongful Act are all defined later in the policy. These words have “ ” to indicate that the policy tells you what they mean – not the dictionary.

The Insuring Agreement also dictates a time period when the claim or act must have occurred in order to trigger coverage.

Most E&O policies are CLAIMS-MADE. Claims of this type usually have a long tail on them. For example, you work on a client’s network in January 2008, but the claim doesn’t occur until January 2010. In this example, the policy in effect in January 2010 will be the policy that responds. Coverage dates are very important dates with regard to Claims-Made policies.

Important Dates on your E&O policies:
Retroactive Date:  This is the beginning of time as far as your policy is concerned. Any acts that occur after this date are covered. Any acts that occurred before this date will not count.
Policy Period: Every policy has effective dates of coverage, usually 1 year.

Extended Reporting Period:  If coverage lapses, the policy provides an extended period of time in which to report claims resulting from acts during the coverage period. E&O policies usually have a built-in ERP or Tail for 90 days. Policyholders have the option to purchase extended Tails spanning multiple years. The company will charge a premium, which must be paid upfront.
To be covered, Acts must occur after the Retroactive Date. Claims must be reported during the Policy Period or ERP. Insureds cannot have knowledge of any pending claims prior to the Inception Date of the policy.


Your insurer also spells out the conditions under which they will pay for your defense. The policy states that they have the “right and duty to defend” even if the claims brought against you are “false and groundless.” They may either appoint counsel for you or approve the counsel you request.

Defense coverage ends when the limit of liability is exhausted (worn out, depleted, kaput).

Be sure to know how whether your policy covers defense costs INSIDE or OUTSIDE the Liability limit. Outside the limit is preferable. If the policy only provides Defense INSIDE the limit, then make sure that your coverage limit is high enough to protect against potential defense costs plus damages. $500,000 in defense will leave only $500,000 left to pay damages on a policy with a $1,000,000 limit.


Cue the Darth Vader music. This is where the rubber hits the road. Insurance companies hestiate to tell you what is covered, but they will emphatically tell you what ISN’T covered. Be sure to read your Exclusions. Here are some biggies:

I.  Exposures covered elsewhere

The insurance industry has a policy for everything. When an act is excluded, that means that it can probably be ensured either by purchasing an endorsement or through a separate policy.

  • Bodily Injury, Property Damage, Personal & Advertising Injury – covered under a Commercial General Liability policy.
  • Discrimination, Humiliation, Harassment – can covered under an Employment Practices Liability policy (for employees), General Liability (for 3rd parties), or Directors & Officers
  • Pollution – can be covered under a Pollution Liability policy.
II.  Standard Stuff

Fraudulent Acts – if this insurance existed, it would sell itself.

Contractual Liability – this is a large and complicated topic. Too big for the scope of this post. Maybe we can get into this later. Insurance companies generally do not insure situations where you are held liable simply because you agreed to be so in a contract. There has to be some negligence or breach of duty on your part to trigger coverage.

Nuclear – tough to find this coverage anywhere.

Wear & Tear – can’t be found on any policy. Insurance is for sudden and accidental events. If loss comes from equipment that is not properly maintained, then the insurance company may exclude it.

III.  Hot topics.

The following exclusions are built into most E&O policies. Coverage for these exposures can usually be added by endorsement for additional premium.

Patent/Copyright infringement – Claims alleging that you violated someone else’s intellectual property are not covered. If these claims are prevalent in your profession, be sure to add this back. I recommend that all of my Technology clients have this coverage.

Unauthorized Access – This term can have more than one meaning in an E&O policy. Expect to see quotation marks around it. Unauthorized Access can refer to access to your system as well as access to your client’s system. The access is perpetrated by a 3rd party without permission. What type of damages will a client demand if they pay you to secure their network, and it gets hacked because of something you failed to do?  See my prior post, Access Unauthorized?  Claim DENIED!  If in doubt, add this coverage by endorsement.

Personal & Advertising Injury - These exposures are normally included in a standard CGL policy.  However, professions who need E&O coverage usually find this exposure excluded from their CGL and standard E&O policies.  "Personal & Injury" includes claims alleging false arrest, malicious prosecution, wrongful eviction, libel and slander.  It is best to add this coverage back to your E&O policy by endorsement.

If you've made it this far, you probably understand that "quick" is a relative term.  As policy summaries go, I'm flying at breakneck pace.  I've covered many important points here, but there are a few more sections that require examination.  I will hit those sections in future posts.

In the meantime, if you have any questions, please post any questions (or corrections) you might have.

Wednesday, March 24, 2010

Mass Privacy Legislation: Other States too?

Below is Kathleen Zortman's response to my question as to whether VA, MD or DC have laws similar to that which recently went into effect in Massachusetts. Read on!


What does Jimmy do all day? Follow him:

Sent using BlackBerry

From: Kathleen Zortman,
Professional Risk Solutions

As promised, I spoke with our attorneys re: any law or legislation in DC, MD or VA (or other states) that is similar to the new Massachusetts Privacy Legislation. Our quick research indicates the following:

· Virginia, Maryland and District of Columbia have enacted breach notification laws—which require notification to consumers of security breaches involving personal information (e.g. name, ss#, driver’s license #, credit card #, etc.). In fact, they are part of the approx. 45 states that have done so (see PDF list attached). However, according to a March 1, 2010 article by The Compliance Authority, Inc., it appears that only Massachusetts and California have called for access control—i.e. the monitoring operations and encryption of data requirements as set forth in Massachusetts law (20 CMR 17.00).

· Other articles suggest that the Massachusetts law (20 CMR 17.00.) is breaking new ground in data protection requirements, just as the California state data breach notification law <> that was passed in 2003 did for state data breach notification laws. It appears that the Massachusetts government didn't believe that data breach notification alone was sufficient to protect its citizens especially in the midst of the current climate of consumer protectionism. The effect of the Massachusetts law has already been seen though, as other states (such as Michigan) are looking at passing similar tough data protection requirements for their state residents' personal information.

It appears that this is a burgeoning area of the law. Therefore, we will continue to monitor the situation and let you know of any meaningful changes. I hope this information is helpful. Please let me know if you have any further questions.



Kathleen O. Zortman


Professional Risk Solutions

285 Davidson Ave, Suite 101

Somerset, NJ 08873

p. 732.764.1000 x17

m. 908.230.5731


Thursday, March 18, 2010

Does Your Company Have a Cell Phone Policy?

I'm working on a white paper with my client Zoom Safer about corporate liability that arises from employee cell phone use behind the wheel. Zoom Safer has begun to explore this topic here. In this new paper, we discuss the elements of a sound company policy that addresses employee cell phone use.

Essentially, if businesses don't address it, then they can be accused of condoning irresponsible driving behavior resulting in loss to life or limb.

The first step is to institute a written Fleet Safety policy that addresses cell phone use while driving.

Does your company have a policy? What does it include? How is the policy enforced?

New Privacy Legislation For Companies with Clients in Massachusetts

I received the following notice of a new law regarding private information contained on any residents of the state of Massachusetts. This information must be secured in manners outlined by the law. If not, and the information is leaked or exposed, then companies can be liable for suit from the Massachusetts Attorney General. Customers, whose information was exposed, can also use violation of the law as further basis for their violation of privacy suit.

iability from exposure of private information is NOT covered by a General Liability policy. Specialized coverage must be secured through a Cyber Liability policy - or possibly endorsed onto an Errors & Omissions (E&O) or Directors & Officers (D&O) policy.

Thanks to the specialists at Professional Risk Solutions ( for sending this information out to agents.

More states might follow suit in the future.

New Massachusetts ‘Personal Information and Privacy’ Law: 201 CMR 17.00

Effective March 1, 2010

This affects:

Any company who maintains private, personal or confidential information on residents of Massachusetts. Confidential information includes financial, medical, credit, SSN, driver’s license, insurance policy numbers, and the like. Banks, leasing companies, insurance companies, brokerages, mortgage companies, credit companies, online retailers, utilities, medical firms could all be affected by the new law.

Our recommendation:

For any company that maintains records on residents of Massachusetts, we urge you to review:

· data security procedures and practices to make sure they comply with the new law

· the Massachusetts compliance checklist

· insurance coverages and limits, including Cyber Liability and D&O

What the law says

Starting March 1, the new law requires that any company that holds personal information on Massachusetts residents, must abide by certain standards and practices to protect and store that information, and prevent it from ‘leaking out’ or being exposed to unauthorized persons.

The law apparently applies independently of other data security regulations. So even if a company complies with HIPAA regulations, for example, the new Massachusetts requirements still apply.

It doesn’t matter whether the company or organization is based in Massachusetts or not - - only that they hold personal or private information on residents of Massachusetts.

What’s the insurance and liability issue

If a company failed to follow these established standards and security practices -- and customer records were ever exposed, whether maliciously or accidentally -- the company could possible be liable for action by the Massachusetts Attorney General. Or, consumers whose records or information were compromised could sue for damages. Having a stringent law ‘on the books’ about safeguards could conceivably strengthen their cases.

Kathleen O. Zortman


Professional Risk Solutions