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.