Insurance Market Source Winter 2023/Spring 2024 by Crain's Detroit Business

INSIDE: ON-THE-RISE: AI EXPOSURES AT WORK | 10 SNAPSHOT: SURGING ENERGY RISKS, COVERAGE OPPORTUNITIES | 16 CHAMPIONING DIVERSITY, EQUITY & INCLUSION EFFORTS | 18 EXCLUSIVE CONVERSATION WITH CHAIRMAN, PRESIDENT AND CEO ALAN JAY KAUFMAN | 34

INSIGHT FOR BROKERS AND AGENTS WINTER 2023/SPRING 2024 | VOL. 33

WEATHERING THE STORM

Finding insurance solutions in today’s turbulent market

IN PARTNERSHIP WITH:

TABLE OF CONTENTS 04 FROM THE CO-PUBLISHERS

This year’s co-publishers discuss the company’s ongoing commitment to guiding partners through an ever-changing marketplace.

CONSTRUCTION INSURANCE

RESIDENTIAL PROPERTY INSURANCE

CYBER AND PRIVACY LIABILITY INSURANCE

FLOOD INSURANCE

ARCHITECTS & ENGINEERS INSURANCE

RISK SNAPSHOT: SURGING ENERGY RISKS

CHAMPIONING DIVERSITY, EQUITY & INCLUSION

CONSTRUCTION INSURANCE

MANAGEMENT LIABILITY INSURANCE

PRIVATE CLIENT INSURANCE

RESTAURANT HOSPITALITY INSURANCE

OVERVIEW: CONTRACTORS PROFESSIONAL LIABILITY

OVERVIEW: TRANSPORTATION INSURANCE

TRENDING RISKS

EMBRACING OPPORTUNITY & INNOVATION

Hazardous construction accidents can lead to multiple injuries, high-profile cases and large awards.

Lingering high prices keep construction costs rising; homeowners could find themselves underinsured.

As businesses seek artificial intelligence solutions, they also open themselves up to a whole new world of data risks, cyber threats. Storms with unprecedented rainfall are leaving homes and businesses to deal with floods, business interruptions and other damages.

Architects, consultants and contractors could face costly legal battles years after project’s completion.

The oil and gas industry, along with renewable energy companies and contractors, face unique exposures and require complex solutions to match.

Kaufman prioritizes a welcoming environment while embracing DE&I as a key business imperative.

Expert Nicholas Freeman discusses key risk management recommendations for the construction industry.

Expert Melissa Martin shares how companies both large and small can protect themselves in the event of a lawsuit.

Expert Sarah Chandonnet explains why high-net-worth individuals require a specialized approach to risk management and insurance.

Expert Connor Farquharson discusses property and liability risks that impact businesses in the hospitality industry today.

The uptick in severity of claims for contractors is a key topic in a discussion moderated by Bryant Steele of Burns & Wilcox.

The recent softening of the transportation market was one of the many highlighted topics during a discussion moderated by John Woods of Burns & Wilcox.

Health system data breach violates HIPAA; Workers Compensation claim trends; Wastewater plant leaks sewage; Tragic boating accident leads to lawsuit.

A conversation with H.W. Kaufman Group Chairman, President and CEO Alan Jay Kaufman about building a global organization and the industry’s future. 3

INSURANCE MARKET SOURCE | WINTER 2023/SPRING 2024

FROM THE CO-PUBLISHERS

A family tradition since 1991 This year’s co-publishers discuss the company’s ongoing commitment to guiding partners through an ever-changing marketplace

nsurance Market Source was first published in 1991 by our late grandfather, Herbert W. Kaufman, founder of Burns & Wilcox and its parent company H.W. Kaufman Group. Then called Agents Market Source, the magazine provided an opportunity for the company’s experts to share their industry-leading perspectives through the lens of emerging trends and current events.

INSIGHT FOR BROKERS AND AGENTS WINTER 2023/SPRING SPECIAL EDITION 2024 | VOLUME 33 CORPORATE HEADQUARTERS 220 Kaufman Financial Center 30833 Northwestern Highway Farmington Hills, MI 48334 248-932-9000 Attention: Marketing Department info@insurancemarketsource.com burnsandwilcox.com FOUNDER • 1924–2001 Herbert W. Kaufman

While the publication has evolved under the direction of our father, Kaufman Chairman, President and CEO Alan Jay Kaufman, the exclusive insights continue to provide our clients with expert counsel to navigate a changing marketplace.

PUBLISHERS Alan Jay Kaufman Chairman, President & CEO H.W. Kaufman Group ajkaufman@hwkaufman.com

In this issue, our first as co-publishers, we examine the role specialty insurance plays within the broader insurance ecosystem. Today’s hard market conditions are not abating, which makes it even more important to find the right solutions to address a multitude of risk factors.

Danny Kaufman President Burns & Wilcox djkaufman@hwkaufman.com

Our experts take a deep-dive into sector-specific challenges, including those associated with Construction, Residential Property, Cyber, Flood and Architects & Engineers. We also tackle emerging categories such as Energy, how the regulatory environment is impacting Healthcare and why workforce dynamics are resulting in an uptick in Workers Compensation claims. We also look at the role that Diversity, Equity & Inclusion plays both culturally and as a key lever to combat industry challenges.

Jodie Kaufman Davis Executive Vice President H.W. Kaufman Group jkaufmandavis@hwkaufman.com ASSOCIATE PUBLISHERS Steven D. Kaufman Richard Shipley Corporate Vice President, Marketing rwshipley@hwkaufman.com

Finally, our editorial team offers readers an exclusive one-on-one conversation with our father. After receiving the prestigious Lifetime Achievement Award from Business Insurance magazine, he sits down to share his thoughts on a legendary career that continues to inspire insurance professionals worldwide.

MANAGING EDITORS Kelly Viviano Senior Director, Digital Marketing keviviano@hwkaufman.com

Please enjoy this edition of Insurance Market Source. On behalf of our family and the 2,000+ Kaufman associates worldwide, thank you for your ongoing partnership.

Danny Kaufman President Burns & Wilcox

This publication was produced in partnership with Crain’s Content Studio, a division of Crain’s Detroit Business, 1155 Gratiot Ave., Detroit, MI 48207

Jodie Kaufman Davis Executive Vice President H.W. Kaufman Group President Burns & Wilcox Canada

CONTRIBUTORS Jessica Sparkes, Writer Kayla Byler, Art Director Allie Jacobs, Content Marketing Specialist Clare Pfeiffer, Content Studio Manager Kristin Bull, Senior Director Crain’s Content Studio

INSURANCE MARKET SOURCE | WINTER 2023/SPRING 2024

IN THE NEWS: MANHATTAN CRANE ACCIDENT CAUSES INJURIES, BURSTS INTO FLAMES

CRANE CRASH CALAMITY Hazardous construction accidents can lead to multiple injuries, high-profile cases and large awards

construction crane accident in New York City injured 11 individuals and shut down traffic after the crane burst into flames 45 stories above ground. The top portion of the crane, which was lifting 16 tons of concrete at the time as it worked on a 54-story building in Midtown Manhattan, struck a neighboring building as it fell on July 26, The New York Times reported. Two firefighters were among those injured.

Casualty, Burns & Wilcox Brokerage, Chicago, Illinois. “When something goes wrong, it is usually in the news.” Accident-related expenses could be covered by a construction company’s Commercial General Liability (CGL) Insurance which can cover third-party bodily injury and property damage claims. Excess liability insurance for crane businesses has become increasingly more difficult to obtain as insurance carriers have exited the class due to some of the high-profile incidents and large awards, Smith said.

Witnesses described the terrifying scene as unlike anything they had seen before, with one nearby resident saying he heard “a big bang and then the fireball.”

This is especially true given that it occurred in the middle of the day and in a crowded area, said Nicholas Freeman, Associate Managing Director, Burns & Wilcox Brokerage, North Dallas, Texas. “It could have been exponentially worse,” he said. “You have untold numbers of construction workers on that site who could have been

“When a crane goes down, it happens in a bad way. It is very high-hazard,” said Adrian Smith, Managing Director, Broker, 6

hurt, and the general public. In Midtown Manhattan, the streets are packed and so are the sidewalks. With the size of that crane, we could have been talking about dozens of fatalities. The fact that it did not happen is pretty miraculous.”

Construction Insurance WHY YOUR CLIENTS MIGHT NEED IT: Construction companies and construction-related industries should obtain CGL in the event of a fire or accident on a work site.

Tower crane collapses often catastrophic

PROTECTS AGAINST: Structural/property damage, third-party injuries and construction defects.

Two days after the incident in Manhattan, another crane collapse made headlines in Baltimore, Maryland, after a crane fell onto I-70, injuring one construction worker and shutting down the highway, CBS News Baltimore reported July 28. While neither accident involved fatalities, the two reports point to the high-risk nature of construction work involving cranes.

LEARN MORE ABOUT THIS POLICY: Search “Construction” at burnsandwilcox.com or burnsandwilcox.ca.

According to the U.S. Bureau of Labor Statistics, an average of 42 crane-related deaths occur each year, over half of which involve a worker being struck by an object or equipment. Crane collapses are also a concern in Canada, where the Ontario Ministry of Labour launched an initiative in 2021 to boost health and safety guidelines for tower cranes, Canadian Occupational Safety reported.

“With the size of that crane, we could have been talking about dozens of fatalities. The fact that it did not happen is pretty miraculous.”

According to Smith, companies that operate tower cranes may have difficulty obtaining high enough limits on their CGL Insurance. “A lot of insurance carriers do not want to insure tower cranes,” he said. “It is very difficult to get capacity on excess limits.”

— Nicholas Freeman, Associate Managing Director, Burns & Wilcox Brokerage, North Dallas, Texas

High-profile crane collapses can worsen that situation, Smith said. “As soon as there is a big crane accident in the national news, it just brings the risk more to the forefront of underwriters’ consciousness.”

“A lot of insurance carriers do not want to insure tower cranes. It is very difficult to get capacity on excess limits.”

Insurance concerns amid social inflation Some of the most tragic crane collapses have led to major payouts. In April, a jury awarded over $860 million to the family of a Dallas, Texas, woman who was killed when a crane collapsed during severe weather and crashed through her apartment roof in 2019, NBC DFW reported. In March of 2022, a jury in Seattle, Washington, awarded $150 million to some of the victims of a 2019 tower crane collapse that killed four individuals and injured several others, TV station KING 5 reported.

— Adrian Smith, Managing Director, Broker, Casualty, Burns & Wilcox Brokerage, Chicago, Illinois

Liability Insurance in the event they operate a fleet with on-road exposure, and more.

“Nuclear verdicts,” often defined as judgments or settlements of more than $10 million, are an increasing concern in this industry, Smith said. Average settlements have surged more than 65% over the past decade ending in 2022, Daily Business Review reported in April.

Construction companies should “work with a specialist wholesale broker who understands this class of business,” Smith added. “The Casualty Insurance market has generally stabilized; however, there are still high-hazard micro areas within the casualty segment that have firmed up — and the crane business is definitely one of those segments that is still a very challenging space,” he said.

“If somebody was severely injured in a crane accident and it gets in front of a jury, that is where the nuclear verdicts can come in,” Smith said. “What is causing these inflated jury verdicts is social inflation, which refers to rising litigiousness. It is not slowing down. If anything, it is getting worse.”

Reviewing policies like CGL Insurance and Excess Liability Insurance is crucial to avoiding surprises after a claim arises, Freeman said. “When a company is operating several stories off the ground in one of the most crowded cities in the world, they do not want to find out that they are inadequately covered or have a poorly written policy after the fact,” he said.

This makes Excess Liability Insurance particularly relevant for construction companies, Freeman said. Many construction companies will need to layer multiple Excess Liability Insurance policies to achieve sufficient limits.

While not every tower crane accident can be prevented, companies can mitigate their risk by maintaining their equipment and keeping maintenance logs, for example. “Many of these accidents can be prevented,” Freeman said. “When you are the owner of a crane company or the operator who is working 40 stories in the air, you kind of owe it to the public more than many other companies do to make sure your equipment is in fine working order and that you are doing everything you can to prevent this sort of thing from happening.” ■

“When talking to companies like this that operate with more potential for severe loss, it is important to make sure they are completely covered from a limits standpoint,” Freeman said.

Avoiding coverage surprises Working with a specialized insurance broker who can advise on OSHA guidelines and best risk management practices is a key step. They can also discuss the company’s need for Workers’ Compensation Insurance to respond to worker injuries, Auto 7

INSURANCE MARKET SOURCE | WINTER 2023/SPRING 2024

IN THE NEWS: LINGERING HIGH PRICES KEEP CONSTRUCTION COSTS RISING

INFLATION IMPACT With repair and replacement costs still well above ‘normal,’ homeowners could find themselves underinsured

nflation in the U.S. has continued its decline in 2023, with Americans seeing some relief on the cost of some necessities like groceries, according to The Associated Press. However, experts said interest rates would still be higher given the overall strength of the economy and a “return to normal” in pricing, in some markets, still a ways off.

“We are finding that more homeowners are underinsured,” said Brandon McCarty, Regional Practice Group Leader, Burns & Wilcox, Philadelphia, Pennsylvania. “The labor rate is more expensive, gas prices are up, and then you add in the cost of installation. Repairs for a house fire could cost triple what it did previously because everything across the board is so expensive.”

That means that inflation’s continued effect on construction costs and other factors could leave homeowners vulnerable to losses that are not completely covered by their insurance policies. In March, one survey found that only 9% of homeowners had looked into adjusting their coverage for inflation, Property Casualty 360 reported.

While Homeowners Insurance and Personal Articles Floater policies could include annual inflation adjustments, these may not be sufficient and do not replace a thorough review with an insurance broker, said Heather Posner, Associate Vice President, National Product Leader, Private Client, Burns & Wilcox, Cleveland, Ohio.

Inflation, along with supply chain issues and labor shortages, may affect how much coverage is required to rebuild or replace a homeowner’s valuables. In the U.K., the inflation rate for rebuilding materials hit record highs in 2023, around 20.3%.

“You always want to make sure that you are properly insured,” she said. “Whether it is jewelry or art or the cost of rebuilding your home, the first thing that individuals need to understand is that they need to be properly insured. The problem is the cost to rebuild 8

or replace something does not stay the same, it is not stagnant; the cost changes based on factors in the economy, including inflation and market costs or trends. If insureds are not having their assets reevaluated by experts that know the cost to rebuild or replace their assets, then there is a good chance they could be vastly underinsured.”

Residential Property Insurance WHY YOUR CLIENTS MIGHT NEED IT: Homeowners Insurance is key for any homeowner; reviewing the policy annually with an experienced broker is highly recommended to adjust for estimated costs of building materials in the event of a loss, or in the event of making significant home upgrades.

The importance of adjusting policies for inflation As supply chain issues, labor shortages and rising material costs continue to affect the amount of Homeowners Insurance individuals need to adequately protect their homes, greater awareness may be needed among property owners. Last June, a woman in Phoenix, Arizona, told CBS 5 that she spent $25,000 out of pocket to rebuild her home after a fire because she was underinsured on her policy.

PROTECTS AGAINST: Costs associated with a loss, including rebuilding costs, in addition to renovation or installation costs.

“I’m not sure whether homeowners are in denial or simply unaware of just how bad the situation is,” McCarty said. “They might not believe that their house would cost that much to be replaced or that they need that level of coverage. However, the cost of getting a project done is currently astronomically higher due to inflation.”

“What happens a lot is that renewals will come out automatically and they may include a small inflation on the home that might not keep up with the market inflation. … Really working with a broker to verify that your home is insured properly is what needs to happen.”

LEARN MORE ABOUT THIS POLICY: Search “Residential Property” at burnsandwilcox.com or burnsandwilcox.ca.

Last summer, it was reported that higher construction costs, labor shortages and the rising threat of severe weather events made homeowners more likely to be underinsured on their policies. In November of last year, a survey found that 60% of home and auto policyholders were worried about being underinsured, Fox Business reported.

— Heather Posner, Associate Vice President, National Product Leader, Private Client, Burns & Wilcox, Cleveland, Ohio

“It is important to ask questions. If you do not know what something means on your policy, ask your broker to explain it,” McCarty advised. “Do your homework on your retail insurance broker — make sure it is someone in the community who is trusted — and do not be afraid to shop and compare coverages. Also understand that the cheapest is not going to be the best when you are pricing Homeowners Insurance.”

“Repairs for a house fire could cost triple what it did previously because everything across the board is so expensive.”

The insurance broker is a key resource in this situation, Posner added. “They can talk about what proper insurance looks like, whether it is for their home, their art or their jewelry, based on inflation factors that may be happening in the market or based on market trends,” she said. “What happens a lot is that renewals will come out automatically and they may include a small inflation on the home that might not keep up with the market inflation or the cost to rebuild. It is more common for homeowners to renew their policy without having a conversation. Really working with a broker to verify that your home is insured at the correct rebuild value is what needs to happen.”

— Brandon McCarty, Regional Practice Group Leader, Burns & Wilcox, Philadelphia, Pennsylvania

help deter criminals. “Smart home technology is becoming more reliable and more affordable,” McCarty said. “The move to smart home technology may not get you a discount like the larger home security systems will, but it can be a deterrent. Homeowners should utilize professionals and experts to ensure they have the correct risk management strategies in place, along with having their home and collectibles insured to the proper value in today’s market.”

It is all the more important, she added, amid the ongoing rise in both the frequency and severity of major weather events. “Homeowners who can secure the full limits should make sure they are doing that,” she said. “It is all about working with the right experts.”

As homeowners assess their potential vulnerabilities, they should also consider household behaviors that could place them at greater risk — such as a celebrity or individual with a more public profile who posts regularly on social media about their daily activities, Posner said. “Homeowners do not think like criminals or risk managers; they are not trained to think about what might cause an insurance claim or make them vulnerable,” she said. “There are experts you can bring in for this type of evaluation and they can customize plans and insurance programs for you. They can help make sure you, your family, and your valuables are the safest they can be.” ■

Personal risk management remains essential In addition to working closely with an insurance broker to review policy limits on Homeowners Insurance and any Personal Articles Floaters a homeowner may have, insurance professionals can also assist in advising property owners about risk management strategies to help prevent losses, Posner and McCarty said. For example, security measures like doorbell cameras and security systems could help homeowners avoid costly claims. In Pine Belt, Mississippi, police recently told WDAM 7 News that Ring doorbell cameras and similar tech could 9

INSURANCE MARKET SOURCE | WINTER 2023/SPRING 2024

IN THE NEWS: BOTS BRINGING BOTH TECH SOLUTIONS, DATA RISKS TO BUSINESSES

AI EXPOSURES AT WORK As businesses seek artificial intelligence solutions, they also open themselves up to a whole new world of data risks, cyber threats

Until more is known about the risks, organizations should tread lightly when it comes to integrating generative AI into their operations, said Gino Franco, Broker, Professional Liability, Burns & Wilcox, Denver, Colorado. They should also ensure that they are protected with Cyber & Privacy Liability Insurance in the event their data is compromised.

s artificial intelligence is increasingly integrated into the business landscape, experts are raising concerns over the risks it could introduce to data security — particularly with the rise of generative AI models such as ChatGPT. Forbes recently reported on how the platforms could affect the data privacy of businesses, and companies like Apple and Samsung have taken steps to prevent employees from using the systems for the sake of confidentiality.

“You are essentially asking a bot to do the work of a human, which cannot fully be done,” Franco said. “If it is not monitored in the correct way, that opens them up to security issues.”

The AI chatbots have also been in the news for a number of other concerns, including privacy red flags with social media app Snapchat’s new chatbot feature, and reports that students at Texas A&M University–Commerce were falsely accused of using a chatbot to write an assignment.

‘Checks and balances’ needed for AI AI tools rely on gathering data points, the International Association of Privacy Professionals noted in a report, and there are currently some uncertainties about the personal information they could collect about users, due in part to evolving privacy laws.

“What it really comes down to is if you are going to use AI, you have to be educated on what you are using it for and which AI tech is going to get you the outcome you are looking for, whether it is in education, at work, or in your daily life,” said Allison Arnold, Broker, Professional Liability, Burns & Wilcox, Indianapolis, Indiana.

U.S. officials have called for regulations on AI and the White House announced plans for federal research on the issue, ABC News reported. In Canada, ChatGPT parent company OpenAI has faced government scrutiny over data collection and usage concerns, Firstpost reported. 10

These are important steps, Arnold said, especially as more businesses and individuals use the technology. Two months after ChatGPT launched in late 2022, it reached 100 million monthly active users and broke records for the speed with which its user base grew, Reuters reported.

Cyber and Privacy Liability Insurance WHY YOUR CLIENTS MIGHT NEED IT: It is critical for companies electronically storing customers’ personal information. Attacks and data breaches can happen in any industry, and cyber attacks are getting more advanced. While not as many breaches are happening, losses are getting more severe and costs of recovery are steeper.

“These technologies can have dire effects if we do not have control of them,” Arnold said. “We really need a solid checks-andbalance system when we are dealing with AI.” As the risk grows, Cyber & Privacy Liability Insurance could become even more important for business owners. When a business experiences a data breach, the policy can help pay for breach response, investigation, ransomware payments, lawsuit settlements, and more. Cyber & Privacy Liability Insurance policies can also provide risk management services to help companies reduce their chance of being targeted. Excess Liability Insurance can provide additional liability limits if needed.

PROTECTS AGAINST: Data breaches, cybersecurity attacks, phishing, forensic costs, call-center monitoring, notification, business interruption expenses, and related lawsuits.

Like other technologies, the use of AI is a potential opening for cybercriminals, Franco explained. “If you do not protect your business against cyber threats, it could really ruin a business.”

“Taking some steps away from your employees who have to do certain things on a daily basis could be beneficial, but if the AI does not know to double-check something or take precautions, then that really ramps up a lot of the risk for cybersecurity claims scenarios happening.”

LEARN MORE ABOUT THIS POLICY: Search “Cyber and Privacy Liability” at burnsandwilcox.com or burnsandwilcox.ca.

Managing workplace AI hazards Generative AI is currently being used in a wide range of industries. According to a 2022 survey of professionals in the U.S., 37% of marketing and advertising professionals and 35% of technology professionals had used AI to help with tasks at work, Statista reported in May. Industries with lower use rates included accounting at 16% and health care at 15%. Whatever the industry, general best practices apply and should be reviewed regularly with a cybersecurity professional, Franco said. As companies work to strengthen their defenses, restricting chatbot use appears to be a wise start, according to Arnold.

— Allison Arnold, Broker, Professional Liability, Burns & Wilcox, Indianapolis, Indiana

“I do hope companies move toward having a flat-out restriction against employees using it,” she said. “The fact that these AI bots and companies have no guarantee of privacy is very concerning. It also pushes liability to the user and does not take on liability.”

“You are essentially asking a bot to do the work of a human, which cannot fully be done. If it is not monitored in the correct way, that opens them up to security issues.”

Companies that allow chatbot use should fully research the platforms they utilize. “Who is the data shared with? Is it ever destroyed or removed from that system? It goes back to doing your research and due diligence,” Arnold said. Even with policies against employee chatbot use, the rapid integration of AI means “you cannot really stop it,” Franco said. “It is already in place in so much of what we do,” he said.

— Gino Franco, Broker, Professional Liability, Burns & Wilcox, Denver, Colorado

Importance of the ‘human factor’ Generative AI is expected to continue to change how many businesses operate, including further personalization of digital interactions, increased software accessibility, and the ability to create code to automate actions, Harvard Business Review detailed in a report. Adding guidelines for the software is critical, the article noted.

Cyber & Privacy Liability Insurance policies “come with a lot more than just monies to make yourself whole again after a data breach,” she added. “They bring a lot of expertise to the table, including forensic investigators to figure out how the hacker got into the system, and they know every state’s notification requirements. They will handle that for the business, and they can also help with any reputational harm.”

“Taking some steps away from your employees who have to do certain things on a daily basis could be beneficial,” Arnold said, “but if the AI does not know to double-check something or take precautions, then that really ramps up a lot of the risk for cybersecurity claims scenarios happening. They are eliminating that human factor, which could cause some major issues.”

As generative AI continues to evolve, there needs to be strong, conscious decisions and thinking around where we are going with this technology, Arnold emphasized. “The good it can do is really incredible, but the bad it can do can be astronomical,” she said. “Do your research, do your due diligence, and ask the right questions about that data privacy.” ■

For now, business owners should speak with their insurance broker about their cybersecurity coverage and make sure they have risk management systems in place. 11

INSURANCE MARKET SOURCE | WINTER 2023/SPRING 2024

IN THE NEWS: EXTREME DOWNPOURS CAUSE AIRPORT FLOOD, FUEL CRUNCH

FLOODING FRUSTRATIONS Storms with unprecedented rainfall are leaving homes and businesses to deal with floods, business interruptions and other damages

increases the frequency and intensity of severe weather — a threat that exposes the vulnerabilities of critical infrastructure like airports, said Brad Turner, Associate Vice President, National Product Manager, Flood, Burns & Wilcox, Morehead City, North Carolina.

Officials called it a “1,000-year storm,” meaning it would only be expected to occur once in a millennium, but these types of events are occurring more often, the Miami Herald reported. The estimations are less useful today as climate change

“We keep throwing around 1 in 1,000 years or 1 in 500 years, but we are really seeing this happen every year now,” Turner said. “In the 2030s and 2040s, we are going to see this kind of event rapidly start to occur more and more often. It brings up infrastructure concerns. A lot of these areas do not really have the infrastructure to accommodate the current-day risk.”

early 26 inches of rain in two days flooded parts of South Florida, grounding flights at Fort Lauderdale-Hollywood International Airport while its tarmac looked “like a lake” and causing a seaport deluge that led to disruptive gas shortages. Officials across the region said the severity of damage from the April storm made them question the region’s readiness for other similar disasters.

The Fort Lauderdale storm also left many homeowners with major flood damage, much of which may not be covered by insurance because Homeowners Insurance excludes flood and many Florida property owners do not carry Flood Insurance. One resident told the South Florida Sun Sentinel that he could not afford to fix the damage to his home and did not have Flood Insurance because he was told his neighborhood was not in a flood zone.

Flood Insurance WHY YOUR CLIENTS MIGHT NEED IT: Because of climate change’s impact on the number and severity of storms, a growing number of homes and businesses are at risk for flooding, but few are insured to protect against it. PROTECTS AGAINST: A separate policy from Homeowners Insurance that covers property damage to homes, buildings and belongings.

“Just because individuals are not located in a ‘flood zone’ does not mean they cannot have major storms and rain,” said Kristopher Guasch, Underwriter, Personal Insurance, Burns & Wilcox, Fort Lauderdale, Florida. “What happened in Fort Lauderdale is the perfect example of that.”

LEARN MORE ABOUT THIS POLICY: Search “Flood” at burnsandwilcox.com or burnsandwilcox.ca.

Preparing for the increasing risk of flood In addition to property damage, airport delays and other impacts, the mid-April downpour in Fort Lauderdale also set off a days-long gas shortage in the region. According to an April 18 CBS Miami report, fuel supplies could not be delivered at Port Everglades because the pumps were “inundated with water” and could not be accessed. Many gas stations temporarily closed amid a wave of “panic-buying” among consumers, CNN Business reported April 19.

“In the 2030s and 2040s, we are going to see this kind of event rapidly start to occur more and more often. It brings up infrastructure concerns.”

“The pumping stations were just not prepared for that amount of rain,” Guasch said. “It caused a domino effect that led to backups and panic-buying. Driving by those gas stations, it looked like there was a Category 5 hurricane approaching with everyone trying to get gas.”

— Brad Turner, Associate Vice President, National Product Manager, Flood, Morehead City, North Carolina

Earlier this year, Port Everglades had been selected for a $32 million infrastructure grant to help address the threat of rising sea levels, the Miami Herald reported. It is one example of many investments that are currently in the works in coastal communities to mitigate flood risks, Turner said.

“Just because individuals are not located in a ‘flood zone’ does not mean they cannot have major storms and rain. What happened in Fort Lauderdale is the perfect example of that.”

“It is really a community issue, if not a national issue, in a lot of these coastal areas,” he said, noting that even nuisance flooding can have a widespread impact. For both commercial property owners and homeowners in coastal areas and beyond, Flood Insurance is vital for covering property damage caused by flood. Policies are available through FEMA’s National Flood Insurance Program (NFIP) or the private insurance market, where property owners can access higher limits and coverage for basement property, swimming pools and other features that are not typically covered by the NFIP. Coverage for loss of use, which can include housing and meals while a property owner is displaced, may also be available.

— Kristopher Guasch, Underwriter, Personal Insurance, Burns & Wilcox, Fort Lauderdale, Florida

installs physical sensors on the property that will monitor the building for water intrusion. When water reaches a predetermined height, a payout becomes available without the standard claims process.

Without Flood Insurance, many homeowners who experience flood damage are left seeking assistance from FEMA, which may be limited or come in the form of loans. “Oftentimes after a flood, you have many homeowners who did not have Flood Insurance,” Guasch said. “Unfortunately, there are too many homeowners out there who feel like they could fall back on FEMA.”

“A lot of communities are now exploring new avenues to insure this type of risk,” Turner said. “With an airport, for example, traditional Flood Insurance does not typically approach the risk in a great way, but parametric coverage is unique in that it is data- and sensor-based.”

In other cases, they may assume flood is covered on their Homeowners Insurance if the flooding was related to a storm. “They may be under the impression that it is covered when in reality it is not,” he added. “Anything that is considered rising water — whether from rain or a storm — the peril that caused the damage is the flooding, not wind or a hurricane.”

This can expedite the process for commercial property owners looking to get back up and running faster, Turner said. “Highly exposed areas are turning to parametric coverage to provide quicker funds,” he said. Turner expects to see more businesses turn to parametric coverage as flood risk continues to evolve. “A lot of experts believe it is the future of insurance,” he said. “With everything being data-oriented and going in that direction, it is a creative approach and something we will likely see more and more of. Even down to small businesses, it is definitely something to explore because it does fill in a lot of gaps.” ■

Benefits of parametric coverage For commercial property owners, protecting against flood losses is possible through standard Flood Insurance policies or a newer type of insurance known as parametric coverage, which can offer significant benefits, Turner noted. With this type of coverage, the insurance carrier 13

INSURANCE MARKET SOURCE | WINTER 2023/SPRING 2024

IN THE NEWS: HUMANA SUES FIRMS, SAYING STRUCTURAL ISSUES FOUND IN ’80S HEADQUARTERS

EMBATTLED BUILDING Architects and contractors could face legal battles if challenged with design errors, sometimes years after a project’s completion

ealth insurance company Humana filed a lawsuit against multiple firms involved in the construction of its 27-story corporate headquarters in Louisville, Kentucky, which was built between 1983 and 1985. The company first found “latent defects” with the building during a renovation project in 2019, according to news reports, and the removal of drywall and other construction components eventually revealed faulty welds connecting the building’s structural columns.

Filing a lawsuit nearly 40 years after construction is highly unusual, said Matt Baxter, Vice President, Broker, Professional Liability, Burns & Wilcox Brokerage, Atlanta, Georgia. Depending on the circumstances, expenses related to this type of claim could be covered under a design firm’s Architects & Engineers Professional Liability Insurance. “That is just an incredible amount of time that has gone by for a claim to arise,” Baxter said. “I have seen things pop up after five or 10 years, but never after more than 30 years. You could likely run into problems proving fault after that amount of time.”

The lawsuit named architecture firm Michael Graves & Associates, DeSimone Consulting Engineering Group, and Wehr Constructors, alleging professional negligence, breach of contract, and building code violations, the Louisville Courier Journal reported. It seeks an unspecified amount to cover the “significant” expense of repairs, which are estimated to take up to five years.

‘Continuous’ insurance coverage crucial for design companies Humana’s corporate headquarters building in downtown Louisville was designed by the late famed architect Michael Graves and is considered an icon of postmodern architecture. 14

The lawsuit is a clear example of why design professionals should always carry continuous Architects & Engineers Professional Liability Insurance, also known as Errors & Omission Insurance, Baxter said. This type of policy can cover legal defense, regulatory penalties, rectification costs, settlements, and other expenses.

Architects & Engineers Insurance WHY YOUR CLIENTS MIGHT NEED IT: Provides financial protection against alleged professional negligence and includes coverage for directly related bodily injury and property damage. Construction projects that have structural or other issues often can lead to lawsuits of at least $1 million.

“If they have prior acts coverage going back to when they designed this building, those policies should react to this lawsuit — at least from a defense standpoint, until they figure out who is at fault,” Baxter explained.

PROTECTS AGAINST: A range of legal-, property- and injuryrelated exposures, including those resulting from the design professional’s negligence or error. Includes financial restitution for costs related to legal defense, material defects, bodily injury and property damage.

Professional Liability Insurance policies are generally “claimsmade policies,” meaning claims must be made during the time period in which the policy was in effect in order to be covered.

LEARN MORE ABOUT THIS POLICY: Search “Architects & Engineers Insurance” at burnsandwilcox.com or burnsandwilcox.ca.

“On the policy, they can have a retroactive date, which is the date they first started buying the coverage and it follows the policy as long as they continuously buy coverage,” Baxter said. “If these companies were buying coverage back in the ’80s and continued to do so, then they technically could still have coverage.”

“The main advice I would give for design firms is that at the beginning of their business operations, they put a Professional Liability Insurance policy in place right away before they start working on anything and they keep that policy in place throughout the time they are in business.”

This is a point that could get overlooked by newer design professionals or those who are unsure about maintaining coverage when business is slow, Baxter said. “It is very important to continuously buy coverage,” he said. “You are buying not only a policy for what is happening right now, but also you are buying a policy for everything you have done in the past.”

Understanding extended reporting periods for post-construction claims In April of 2022, The New York Times reported on a rise in complaints and legal claims related to alleged construction defects in pandemic-era new housing developments, including a 46% increase in complaints per building. Construction defect claims were also on the rise in some areas as of 2019 following a boom in the construction industry, with defect complaints in Florida increasing from 31 in 2008 to nearly 1,000 in 2017, Daily Business Review reported in 2019.

— Matt Baxter, Vice President, Broker, Professional Liability, Burns & Wilcox Brokerage, Atlanta, Georgia

Last fall, an engineering firm in Florida was sued for $11 million over allegations of breach of contract related to design errors in a five-story student housing building, Daily Business Review reported. According to the lawsuit, repairs cost $6.9 million and the owners faced $4.3 million in economic losses since the apartments could not be occupied during repairs.

Design professionals must also understand the importance of coverage after operations slow down or stop completely, Baxter said. “If a firm closes or the design professional passes away and operations are shut down at that point, what becomes available is an extended reporting period,” he said. “There are different lengths available, and this just gives extra time to report a claim that may arise that would have fallen within that policy period.”

“Correcting design errors can be really expensive,” Baxter said. With litigation costs on the rise, legal defense coverage is increasingly important for companies. According to Statista, large companies in the U.S. spent $22.8 billion on litigation in 2020 and were estimated to spend $23.71 billion in 2021. Canadian companies have steadily increased legal spending over the past five years, according to the Thomson Reuters 2023 Canadian Legal Market Update, and 40% of companies surveyed planned to increase their legal spending in 2023.

Wrongful acts must still occur on or after the retro date, he pointed out. “The advice is always to buy the longest period you can for the extended reporting period,” Baxter said. “Every business is different, and everybody has different concerns that factor into that decision, but you want to protect yourself even after the business is gone. Once the extended reporting period ends, there is no coverage anymore. There is no going back to the policy. The owners would be left holding the bag for any claim that arises after that point.”

In some cases, defense costs alone could exceed policy limits before indemnity payments, or settlements, are even factored in. “The main advice I would give for design firms is that at the beginning of their business operations, they put a Professional Liability Insurance policy in place right away before they start working on anything and they keep that policy in place throughout the time they are in business. Even though it is a cost to them, it can protect themselves in the long run for unforeseen exposures that could pop up down the road.” ■

The cost of correcting design errors According to World Construction Today, design errors comprise more than half of all claims against engineers. When design errors occur, they can be exceedingly expensive to correct. 15

INSURANCE MARKET SOURCE | WINTER 2023/SPRING 2024

RISK SNAPSHOT: SURGING ENERGY RISKS The world’s primary fuel sources, Oil and Gas (O&G), require highly complex processes for their production and distribution — from upstream to midstream to downstream. As a result, the O&G industry faces unique exposures, including pollution risks and perils that accompany the transportation and storage of gas and oil. Alternatively, the fastest-growing power source, Solar Power, is turbocharging the renewables market — offering “clean energy.” From site preparation and transportation to installation and operation, the Renewables industry also faces distinct risks. O&G and Renewable companies and contractors, demand highly complex and powerful insurance solutions to match. Ensure your clients have the right coverage for their surging risks by working with an expert who understands the complexities within the growing Energy sector.

AREAS OF SPECIALTY • Upstream Sector (U.S.) • Midstream Sector (U.S.) • Wind, Solar & Other Renewables (U.S. & Canada) Learn more at BurnsandWilcox.com and BurnsandWilcox.ca.

Petroleum and natural gas account for nearly 40% of U.S. energy production

Renewable energy sources account for about 22% of U.S. energy production

Price of oil has risen to $90 per barrel & is forecast to increase almost 6% in the last quarter of 2023

There are 630 active drilling rigs throughout the United States and 119 in Canada

Coal, oil & natural gas remain the world’s primary fuel sources

Renewable energy sources include wind power, solar power, bioenergy (organic matter burned as fuel) & hydroelectric, including tidal energy

Solar generation is the fastest-growing electricity source

Companies are increasingly aware of Environmental Social Governance (ESG) trends, investing in technologies to speed toward net-zero carbon emissions

Canada has released a plan for a 40% cut in carbon emissions by 2030

Sources: Energy Information Administration (2022); Energy Information Administration (September 2023); YCharts (September 2023); Environmental and Energy Study Institute (2023); United Nations (2023); Center for Climate and Energy Solutions (2023); CBC.CA (2023).

INSURANCE MARKET SOURCE | WINTER 2023/SPRING 2024

CHAMPIONING DIVERSITY, EQUITY & INCLUSION Kaufman prioritizes a welcoming environment while embracing DE&I as a key business imperative

All photos featured are from Kaufman Employee Resource Groups. 18

he insurance industry has long faced challenges in terms of attracting and retaining top talent. Today associates and sought-after candidates desire companies that invest in their culture and focus on building a warm and welcoming environment in which team members can perform at their best. Since 1969, H.W. Kaufman Group has always put its people first. Founder Herbert W. Kaufman took great pride in celebrating his associates. More than 50 years later, Kaufman is operating under its third generation of family leadership. The tradition of honoring and celebrating associates remains in place. Today that extends to the company’s Diversity, Equity and Inclusion (DE&I) platform, which is woven into Kaufman’s culture and so much more than a “nice-to-have.” “We recognized there was a significant opportunity to lean into DE&I and leverage the unique perspectives and backgrounds of our associates to solve real business challenges,” said Jodie Kaufman Davis, H.W. Kaufman Group Executive Vice President, and Board Member. Kaufman associates have established seven Employee Resource Groups (ERGs). Beyond serving as an important and positive space for cultural discussions, the ERGs are prioritizing recruiting and targeting outstanding professionals who may have otherwise chosen a career path other than insurance.

Kaufman Employee Resource Groups • APAC (Asian/Pacific) • HOLA (Hispanic/Latino Organization for Leadership and Advancement) • Umoja (Unity) — African American Association • WINS (Women in Insurance) • Kaufman Family Advocacy Network — K-FAN • Kaufman Pride & Allies • Kaufman Military Families — KEVLAR Learn more at www. burnsandwilcox.com/dei or www.hwkaufman.com/dei

“We are beginning to attract a different type of associate across all departments,” she added. “Our IT team includes top tech talent who are building breakthrough and innovative new products. Recent college graduates are coming to us from student associations that reflect the makeup of our ERGs. Importantly, they are choosing an insurance career rather than banking, consulting or another similar field.” Kaufman Davis notes that the work is just beginning. “The potential is significant and mutually beneficial for our company, team and clients. Our culture is thriving. Associates feel supported and valued. Together, we are addressing real challenges that will enable Kaufman to continue driving long-term and sustainable success.” 19

INSURANCE MARKET SOURCE | WINTER 2023/SPRING 2024

ASK THE EXPERT: CONSTRUCTION

Q&A WITH NICHOLAS FREEMAN Associate Managing Director, Broker, Casualty, Burns & Wilcox Brokerage, North Dallas, Texas

Construction Insurance WHY YOUR CLIENTS MIGHT NEED IT: Accidents happen at construction sites large and small, and the current legal climate has seen increasingly large judgments. PROTECTS AGAINST: Claims of property damage and worksite injuries for personal and commercial construction projects; it also protects against issues related to subcontractors. EXPERT OPINION: Construction companies will want to pay attention to what is in their policies — not every CGL Insurance policy is written the same. LEARN MORE ABOUT THIS POLICY: Search “Construction Insurance” at burnsandwilcox.com or burnsandwilcox.ca.

As cranes and scaffolding dominate skylines in major cities across the U.S., it is clear that the construction industry is bustling in many areas. To learn how Construction Insurance helps protect construction companies, we spoke with Nicholas Freeman, Associate Managing Director, Broker, Casualty, Burns & Wilcox Brokerage, North Dallas, Texas.

What are the greatest risks in the construction industry today?

N.F.: It is more expensive now to do business than it was several years ago. The pandemic has had an impact on that as far as costs and finding employees, but it is also the legal climate in a number of states when it comes to judgments and the cost of legal defense.

What should companies be aware of relative to these risks?

N.F.: As far as the cost of claims and resulting court judgments, construction companies can take steps to mitigate their risks. They cannot fully get away from it but I would suggest making sure that their risk management and safety procedures are updated to make the workplace as safe as humanly possible and to reduce the number of accidents. This includes training their employees and following Occupational Safety and Health Administration (OSHA) guidelines. They should also make sure that they are requiring the proper insurance coverages of their independent contractors

“[Construction companies] should make sure their risk management and safety procedures are updated to make the workplace as safe as humanly possible and to reduce the number of accidents. This includes training their employees and following Occupational Safety and Health Administration (OSHA) guidelines.” — Nicholas Freeman, Associate Managing Director, Broker, Casualty, Burns & Wilcox Brokerage, North Dallas, Texas

along with indemnification wording in their contracts. That way, if there is an accident or claim involving one of those independent contractors, they are essentially protecting themselves and pushing the claim to the proper party.

Which insurance policies can help them respond to these threats? N.F.: Important policies include Commercial General Liability (CGL) Insurance, Auto Liability Insurance, Workers’ Compensation Insurance, and Excess Liability Insurance. The CGL Insurance is responsible for covering thirdparty bodily injury and property damage, and the Excess Liability Insurance sits on top of that and provides increased limits. The Auto Liability Insurance is for the vehicles they are using in their daily course of business, Workers’ Compensation Insurance is for worksite injuries and the employer liability portion of that, and Excess Liability Insurance can sit over top of those as well. Construction companies 20

will want to pay attention to what is in their policies — not every CGL Insurance policy is written the same.

What are the greatest opportunities for brokers to get into Construction Insurance? N.F.: Definitely wholesale insurance and the opportunity to put creative solutions together for retail clients. It is an extremely challenging and rewarding position to be in because it is fast-moving but also what we are doing on a daily basis varies greatly.

What advice would you give brokers to increase their success rates with these products? N.F.: Know your products and know your forms. Read and research. Make an effort to understand your product and know what you are talking about. If you do not know your product and how the forms interact with one another, it is very difficult to put solutions together and know that those solutions are the correct ones. ■

ASK THE EXPERT: MANAGEMENT LIABILITY

Q&A WITH MELISSA MARTIN Broker, Professional Liability, Burns & Wilcox, Los Angeles, California

Management Liability Insurance WHY YOUR CLIENTS MIGHT NEED IT: In an ever-changing legal landscape, companies both large and small need to be adequately protected in the event of a lawsuit or exposure. PROTECTS AGAINST: A company’s assets, directors and officers, and personal assets. EXPERT OPINION: Having a strong command of a company’s actual exposures should be top of mind. Protecting its assets and balance sheet with the right insurance packages, protecting directors and officers from liability, as well as personal assets being on the line for mismanagement are essential. LEARN MORE ABOUT THIS POLICY: Search “Management Liability” at burnsandwilcox.com or burnsandwilcox.ca.

Running a company can result in a number of liability exposures, from employment matters to financial decisions. To learn more about management liability and the types of insurance that can address it, we spoke with Melissa Martin, Broker, Professional Liability, Burns & Wilcox, Los Angeles, California.

What are some of the greatest risks today when it comes to management liability? M.M.: We are living in an environment where there is a lot of consolidation, including mergers and acquisitions activity. Those can present management liability risks to the existing board of directors as well as the acquiring company’s board. We also see many companies being run on a skeleton crew or experiencing major layoffs, which comes with its own challenges — both from an employment practices perspective, as far as whether employees were let go, and proper compensation; and also because the company may not have the workforce to address smaller issues before they become larger. There are also more risks for companies that are operating in spaces that have maturing legal landscapes, like the cannabis market.

What should clients be aware of relative to these risks? M.M.: Having a strong command of a company’s actual exposures should

“Companies need to be properly educated and nimble enough to either be proactive in order to avoid risk or swiftly reactive when they have run afoul of the new laws and there is an actual lawsuit.” — Melissa Martin, Broker, Professional Liability, Burns & Wilcox, Los Angeles, California

be top of mind. Protecting its assets and balance sheet with the right insurance packages, protecting directors and officers from liability, as well as personal assets being on the line for mismanagement are essential. They should also be aware of the constantly changing legal landscape; there are a lot of laws being drafted and passed at the state level. Companies need to be properly educated and nimble enough to either be proactive in order to avoid risk or swiftly reactive when they have run afoul of the new laws and there is an actual lawsuit.

Which insurance policies can help them respond to these threats, and what are the limits and examples of covered expenses? M.M.: Management Liability Insurance is key for liability exposures. That includes Directors & Officers (D&O) Insurance, which protects the entity itself and the individual directors and officers of the company who make the managerial decisions; and Employment Practices 21

Liability (EPL) Insurance, which has to do with having proper employment hiring procedures, the workplace environment being conducive, and making sure that companies are addressing any issues of harassment or discrimination. These policies can cover the cost of legal defense, settlements, and more. Policies can also respond to fiduciary liability, including the management of employee benefit plans, as well as things like commercial crime, embezzlement of funds by employees, and workplace violence.

What features of Management Liability Insurance policies are specific to Burns & Wilcox, and what are the advantages of these? M.M.: Burns & Wilcox has strong carrier partners who we have worked with to develop our own proprietary wording and endorsements that provide enhanced coverage over what would typically be available. That starts off negotiations with a leg up in terms of the breadth of coverage. ■

INSURANCE MARKET SOURCE | WINTER 2023/SPRING 2024

ASK THE EXPERT: PRIVATE CLIENT

Q&A WITH SARAH CHANDONNET Underwriting Director, Private Client, Burns & Wilcox, Detroit/Farmington Hills, Michigan

Private Client Insurance WHY YOUR CLIENTS MIGHT NEED IT: If standard auto and home policies are not sufficient to cover all exposures for high-net-worth individuals. PROTECTS AGAINST: Property damage and large liability exposures, including what they share on social media. EXPERT OPINION: With Private Client Insurance, we typically write all lines of business for that client. This could include Homeowners Insurance, Personal Umbrella Insurance with personal injury coverage, Excess Flood Insurance, Personal Inland Marine Insurance, and more. We try to cover all exposures. LEARN MORE ABOUT THIS POLICY: Search “Private Client” at burnsandwilcox.com or burnsandwilcox.ca.

From professional athletes to corporate executives, high-net-worth individuals require a specialized approach to risk management and insurance. To learn more about Private Client Insurance, we spoke with Sarah Chandonnet, Underwriting Director, Private Client, Burns & Wilcox, Detroit/Farmington Hills, Michigan.

What type of clientele are you seeing in the Private Client Insurance space?

S.C.: The type of clientele we are seeing in our space ranges from high-profile entertainers to professional athletes, attorneys, doctors, or CEOs. They usually work with a business manager or family office risk manager to handle their financial aspects. These are extremely well-managed individuals who take their risk management and their insurance very seriously.

What are some of the greatest risks these individuals face, and what should they be aware of relative to these risks?

S.C.: Property damage and large liability exposures are among the greatest risks. We see very high-valued properties in California to Florida and other coastal areas where they may have primary or secondary residences. Many of our clients today are active on social media and there is a huge liability exposure with that. They also may collect luxury items such as

“The type of clientele we are seeing in our space ranges from highprofile celebrities to professional athletes, attorneys, doctors, or CEOs. …These are extremely well-managed individuals who take their risk management and their insurance very seriously.” — Sarah Chandonnet, Underwriting Director, Private Client, Burns & Wilcox, Detroit/Farmington Hills, Michigan

cars or jewelry. Some also live in areas with high exposure to hurricanes, flood or wildfire.

What kinds of insurance policies can help individuals respond to these threats? S.C.: With Private Client Insurance, we typically write all lines of business for that client. This could include Homeowners Insurance, Personal Umbrella Insurance with personal injury coverage, Excess Flood Insurance, Personal Inland Marine Insurance, and more. We try to cover all exposures. Whether it is purchasing a new home or adding a new piece of jewelry, it’s important that it is properly insured.

What steps should individuals take to complement their insurance coverage from a prevention standpoint? S.C.: Investing in water monitoring and shutoff devices, hurricane windows and shutters, and wildfire protection for their homes, as well as monitored alarms, sprinkler devices, and home safes for 22

jewelry and other valuables. In many cases, their risk managers maintain their risk portfolio and public profile. How they represent themselves — including a clean social media presence — is also very important, especially in a hard insurance market. Insurance carriers are becoming extremely selective, and they are always underwriting the individual first and then the actual property.

Why have your Private Client Insurance brokers had such success? S.C.: Most of our brokers have known their clients for over 20 years. They have helped catalog their assets and reviewed their policies at length yearly, making recommendations on their clients’ behalf to get the broadest coverage possible. They advocate for their clients, and they are also part of a well-managed, reputable broker that partners with the Burns & Wilcox Private Client Practice to leverage and negotiate the best terms with top markets and carriers. Providing niche expertise in the private client space is extremely important, which all of our brokers have. ■

INSURANCE MARKET SOURCE | WINTER 2023/SPRING 2024

ASK THE EXPERT: HOSPITALITY

Q&A WITH CONNOR FARQUHARSON Manager, Commercial Insurance, Burns & Wilcox, Dallas/Fort Worth, Texas

Hospitality Insurance WHY YOUR CLIENTS MIGHT NEED IT: Restaurant owners and individuals in the hospitality industry should consider their assets, know their potential risks, and always protect staff and customers. PROTECTS AGAINST: Potential losses associated with liquor liability, kitchen fires, food spoilage, cybersecurity, delivery services, physical injuries, and weather damage. EXPERT OPINION: For restaurant and bar owners, they have to make sure they have the correct controls in place and that their employees have the proper training, especially for dealing with situations like intoxicated customers. LEARN MORE ABOUT THIS POLICY: Search “Hospitality” at burnsandwilcox.com or burnsandwilcox.ca.

From altercations between patrons to overserving alcohol, bars and restaurants face a number of risks that could lead to costly liability claims. To learn more about the risks and insurance solutions in the hospitality industry, we spoke with Connor Farquharson, Manager, Commercial Insurance, Burns & Wilcox, Dallas/Fort Worth, Texas.

What are some of the greatest risks in the hospitality industry today? C.F.: The erosion of insurance coverage coupled with the increasing price of insurance is probably the biggest risk in the hospitality industry. Additional coverages are decreasing; for example, you may see lower limits or exclusions on assault and battery, firearm exclusions, or defense inside of the limits. They are getting less in terms of coverage because it just has not been profitable for the insurance carriers. Assault and battery is something that does happen at bars, unfortunately, and these claims can be very expensive. If a policy has those exclusions, then the owners are the ones left holding the bag. New ventures starting up may also have a hard time finding coverage, as they do not have the experience and that makes it very difficult on the carriers.

What should business owners be aware of relative to these risks? C.F.: They should be aware of the exclusions and stipulations that are on their policy and the sublimits on the

“Have formal, rigid controls for things like intoxication, and have the staff properly trained to make sure they can handle those situations correctly. Be ahead of it.” — Connor Farquharson, Manager, Commercial Insurance, Burns & Wilcox, Dallas/Fort Worth, Texas

policy. Every insured and every broker should be looking through these policies very carefully to see what is excluded and what is intended to be covered. For business owners, they also need to make sure they have the correct controls in place and that their employees have the proper training for situations like intoxicated customers.

What insurance policies can help them respond to these threats, and what are the limits and examples of covered expenses? C.F.: For bars, taverns and restaurants, Commercial General Liability (CGL) Insurance and Liquor Liability Insurance are very important. If they do not have assault and battery coverage, which can be excluded or sublimited to very low sublimits, that could end up being a huge problem if they have a claim like that. They should also look for defense coverage outside of the limits, which means that the defense costs will be paid outside of the policy’s limit. That is huge, because defense costs can suck up a ton of the limits immediately, before you have even started paying the claim. They 24

should also look at their Commercial Property Insurance or Business Personal Property Insurance, including any wind and hail or storm deductibles, as well as Equipment Breakdown Insurance.

What steps should business owners take or services should they invest in that complement insurance coverage from a prevention standpoint? C.F.: It is always important that the business owners understand what their risks are and have controls in place. Have formal, rigid controls for things like intoxication, and have the staff properly trained to make sure they can handle those situations correctly. Empower your employees and support them whenever they do have to go through those controls.

What are the greatest opportunities for brokers to get into Hospitality Insurance? C.F.: Outwork your competition, understand the forms, and understand what the coverages are and what is excluded. It is a very difficult marketplace but there are still solutions to be found. ■

INSURANCE MARKET SOURCE | WINTER 2023/SPRING 2024

WEBINAR

Hosted March 23, 2023

PANELISTS

Gina Jones, Vice President, Director, Environmental Programs, Burns & Wilcox

Derek Kilmer, Associate Managing Director, Broker, Professional Liability, Burns & Wilcox

Erica Rangel, Manager, Professional Liability, Burns & Wilcox

Bryant Steele, Regional Vice President, Managing Director, Burns & Wilcox

OVERVIEW: CONTRACTORS PROFESSIONAL LIABILITY

he state of the professional liability market for contractors includes both challenges and opportunities. While the market is generally stable, there has been a recent increase in the severity of claims, which has increased the costs of settling them. It is one of several trends discussed in a recent webinar hosted by Burns & Wilcox and moderated by Bryant Steele, Regional Vice President, Managing Director, Burns & Wilcox, Chicago, Illinois. “Overall, the cost and time to settle a claim is increasing,” said Derek Kilmer, Associate Managing Director, Broker, Professional Liability, Burns & Wilcox, Detroit/Farmington Hills, Michigan. “It is taking an average of much more than a year to settle a matter.”

Contractual requirements contribute to greater demand Demand is high for Contractors Professional Liability Insurance policies, and a growing number of today’s contractors need to carry Errors and Omissions (E&O) Insurance based on owner requirements. “We have been seeing a great uptick in the buying market for Contractors E&O Insurance,” said Erica Rangel, Manager, Professional Liability, Burns & Wilcox, Chicago, Illinois. In addition to coverage for professional errors, many contractors also need insurance policies that will address pollution exposures, as well as emerging risks associated with the use of new technologies. The world has changed since the COVID-19 pandemic, and consumer buying trends have influenced construction projects away from shopping malls and movie theaters and toward constructing data, logistics and distribution centers, and life sciences headquarters. “There is a lot of opportunity out there for contractors, and finding the right policy to protect them is really important,” Rangel said. This includes a noticeable uptick in market demand for artisan contractors, such as HVAC experts, painters, electricians, and more, Kilmer said. They are more likely to purchase 26

coverage because of owner requirements but an increase in claims has motivated many of these contractors to actively seek professional liability coverage on their own. “Faulty workmanship comes up a lot in this artisan space,” he said.

Learn more Watch this entire webinar at www.burnsandwilcox.com.

Assessing environmental risks Another pressing issue for contractors is whether they are protected against pollution-related claims, which are on the rise. Many businesses do not understand the potential threats that exist and would benefit from purchasing a Contractor’s Pollution Liability Insurance policy or Contractor’s Professional Liability Insurance policy, said Gina Jones, Vice President, Director, Environmental Programs, Burns & Wilcox, Denver, Colorado.

“There is a lot of opportunity out there for contractors, and finding the right policy to protect them is really important.” — Erica Rangel, Manager, Professional Liability, Burns & Wilcox, Chicago, Illinois

“Every single account has an environmental exposure,” Jones said. “The absence of loss does not necessarily mean the absence of risk.” The environmental space has the capacity and plenty of aggregate limits, she explained, and rates have remained relatively steady and affordable compared with other sectors. Contractor’s Pollution Liability Insurance can provide extra protection that standard liability policies do not offer, since many Professional Liability Insurance policies have exclusions or limits.

• The policy should align with specific project needs — Adjust the policy based on the type of work contractors are doing, especially when it comes time for renewal.

Key takeaways for brokers and agents

“It is important to enlist a broker who understands the class of business you are looking at and is an expert in that,” Jones added, pointing to the importance of claims examples. “At the end of the day, obviously it is up to your client if they are going to purchase it or not, but you are doing your job to at least let them know what their exposures and the claims examples can be.”

• Identify opportunities for additional coverage — Consider other add-ons that a company may need, such as Employment Practices Liability (EPL) Insurance or Cyber & Privacy Liability Insurance.

Brokers and agent should also consider the following when working with contractors: • Increase in severity of claims — The cost and time to settle a claim is on the rise, especially with pollution-related claims.

INSURANCE MARKET SOURCE | WINTER 2023/SPRING 2024

WEBINAR

Hosted June 5, 2023

PANELISTS

Courtney Galle, Underwriter, Transportation, Burns & Wilcox

OVERVIEW: TRANSPORTATION INSURANCE

he Transportation Insurance sector has been in a hard market for roughly a decade in the United States. It has since turned softer as a result of increased competition for business, according to Courtney Galle, Underwriter, Transportation, Burns & Wilcox, Indianapolis, Indiana.

“Carriers are expanding their appetite and opening up for additional capacity,” she said, noting that these insurance carriers are also using more data to evaluate risks. “There is a broad range of markets being offered across the board. It is an exciting time to be in the transportation industry.”

John McGlynn, Director, Transportation, Burns & Wilcox Canada

The trend was among many issues addressed in a recent webinar hosted by Burns & Wilcox and moderated by John Woods, Vice President, National Practice Group Leader, Transportation, Burns & Wilcox, Scottsdale, Arizona. As capacity has increased during the first half of 2023, renewal rates have stabilized to flat, minor increases or even small reductions, and brokers and agents have been able to seek out the most complete coverage at the best rates.

Confronting industry challenges While a softening market can produce flat to lower insurance premiums for some transportation companies, it does not solve one of their biggest issues: the continued driver shortage. Tyler Myers, Director, Transportation, Burns & Wilcox

“We are seeing a consistent trend through the last decade, and that continues with an upward trajectory,” said Tyler Myers, Director, Transportation, Burns & Wilcox, Dallas/Fort Worth, Texas. “Some of the variables include licensed drivers that no longer want to be in the industry, which is reportedly an issue with low pay, working conditions, and pay structure being based on mileage.” Potential solutions include creating new bonus structures to emphasize quality, safety, and load management. Recruiting foreign drivers, subject to acceptance by insurance carriers, and veterans could also build up the candidate base.

John Woods, Vice President, National Practice Group Leader, Transportation, Burns & Wilcox

While submissions are increasing, renewal retentions are falling in this softer U.S. market. In fact, retention rates of only 50% to 60% are common and are historically lower than the over 70% retention rates usually seen. 28

Inflation has further stretched operational budgets. Given a more competitive increased capacity, companies are price shopping, looking for the opportunity to reduce insurance costs. Given this competitiveness, it is “a race” for agents to get quotes for their clients, Galle said, and this trend is expected to continue in the foreseeable future.

Learn more Watch this entire webinar at www.burnsandwilcox.com.

Unlike the U.S., Canada remains in a “very, very tight market” with firm premium levels and limited capacity, said John McGlynn, Director, Transportation, Burns & Wilcox Canada, Toronto, Ontario. This has caused many independent brokers to recruit new sources of capital to help support client needs through agency/broker captive facilities. Building liability towers remains difficult in this environment, especially given inflationary pressures.

“Carriers are expanding their appetite and opening up for additional capacity. … It is an exciting time to be in the transportation industry.” — Courtney Galle, Underwriter, Transportation, Burns & Wilcox, Indianapolis, Indiana

Nuclear verdicts and the use of technology It was hoped the frequency of nuclear verdicts in the U.S. would diminish, Woods said, but despite a short-term downtick at the start of the pandemic, these verdicts may worsen. Industry statistics indicate there was a 10% increase in truck and bus accidents that resulted in one or more deaths in 2022 compared with 2019 (about 5,000 in total), and an 8% increase in the number of fatalities from those accidents.

Key takeaways for brokers and agents

Fortunately, technology supports the need for trucking companies to have more visibility into their drivers’ routes and on-the-road operations. Many insurance carriers offer subsidies for clients installing camera and reporting technologies.

• Complete submissions are required — These include five-year loss runs, four quarters of international fuel tax agreements (if applicable), and a complete narrative of the account.

Even with increased competition for the transportation sector, new business opportunities will be more abundant than before: • Increased demand for auto and trucking — Burns & Wilcox offers a full range of products to help meet the needs in this space.

• Be proactive and organized — Submitting complete submissions 90 days in advance of the effective date is almost essential to prevent being blocked.

“The value they are getting out of this technology is immeasurable,” Woods said.

INSURANCE MARKET SOURCE | WINTER 2023/SPRING 2024

#TRENDING

Health system pays $1.25 million in HIPAA settlement over 2016 data breach

ore than six years after a data breach that disclosed 2.81 million patients’ protected health information, Banner Health has agreed to pay $1.25 million to the U.S. government to settle potential violations of the Health Insurance Portability and Accountability Act (HIPAA), Campus Safety Magazine recently reported. The Arizonabased healthcare system also agreed to implement changes to better protect patient information. “The precedents have been set for how the government is requiring companies to protect data, so this will not be the first time we see a higher penalty,” said Derek Kilmer, Associate Managing Director, Broker, Professional Liability, Burns & Wilcox, Detroit/Farmington Hills, Michigan.

Recent reports show that the number of data breaches in the healthcare industry remains higher than pre-pandemic levels. This makes data security efforts and broad Cyber and Privacy Liability Insurance increasingly important for healthcare companies, said Karl Olson, Vice President, Professional & Management Liability Practice Leader, Burns & Wilcox Brokerage, San Francisco, California. Cyber and Privacy Liability Insurance can also cover business interruption costs in some cases, as well as bodily injury claims related to the breach. “If a network goes down and a patient cannot be seen and that creates further harm to that patient’s condition due to lack of access to a facility because their network was not operating, there can be coverage for those types of allegations as well,” Olson said. A key takeaway is that “this is not going to be the largest fine that we are going to see, and it does happen after the fact — in this case, more than six years,” Kilmer said. “You will get caught with a fine, it just depends on when.” ■

500,000 gallons of sewage leaks into river after wastewater plant malfunction

pproximately 500,000 gallons of wastewater that had not been fully treated leaked into the Willamette River in Portland, Oregon, earlier this month after a malfunction at a sewage treatment facility. The incident prompted officials to issue an advisory urging residents to avoid the waterway for 48 hours due to bacterial concerns. Potential impacts from the leak include illnesses caused by higher levels of bacteria, harm to area aquatic life, and disruption of business activities along the river. Pollution-related damages are generally excluded under Commercial General Liability (CGL) Insurance, making environmental policies such as Pollution Legal Liability Insurance and Environmental Insurance necessary. “This incident speaks very clearly and loudly to why this type of client should really contemplate having environmental

coverage in place,” said Karim Jaroudi, Manager, Environmental, Burns & Wilcox, Toronto, Ontario. If a population of fish or other aquatic life is killed, Natural Resources Damage (NRD), an important component of Environmental Insurance, can pay for replenishing that supply. Business interruption coverage is typically an add-on for policies like Environmental Insurance and Pollution Legal Liability Insurance. “If someone has a business where they do kayak tours, and they have to close their business for two days, that might turn into a claim 30

against the wastewater treatment plant,” said Timothy Donnellon, Senior Broker, Environmental, Burns & Wilcox, Charleston, South Carolina. Wastewater treatment contractors may also require Transportation Pollution Liability Insurance and Non-Owned Disposal Site Insurance, which can address the risks associated with moving and disposing of potential pollutants, Donnellon said. These options are especially relevant today, as new information emerges about PFAS, or so-called “forever chemicals,” he said. ■

#TRENDING

Report: Workers’ Compensation claims fueled by job inexperience, aging employees

recent study of on-the-job injury reports by Property Casualty 360 found brand-new hires were responsible for 34% of all claims assessed. “It appears that these claims are happening even more now than in the past,” said Justin Dorman, National Product Manager, Workers’ Compensation, Burns & Wilcox, Charleston, South Carolina. The new data linking work experience and age with Workers’ Compensation Insurance claim frequency and severity makes sense given labor shortages and other “unprecedented volatility” in the workforce during the COVID-19 pandemic, said Morgan McCoy, Underwriter, Workers’ Compensation, Burns & Wilcox, Charleston, South Carolina.

Woman sues charter, captain after tragic boating accident

mother of two who was severely injured after a tragic boating accident on Lake Michigan has filed a lawsuit against the boat rental company, its owner and the boat’s captain. According to a recent report in the Chicago Sun-Times, Lana Batochir was floating on a raft with her friends at Chicago’s popular “Playpen,” a no-wake boating area on Aug. 13, 2022, when a rented yacht drifted and smashed into them.

When workers are injured on the job, Workers’ Compensation Insurance can pay for the employee’s medical expenses, a portion of their salary while they recover, rehabilitation services, return-to-work programs, and more. “Workers’ Compensation Insurance is the very first policy that is going to be triggered when any type of injury claim happens,” McCoy said, noting that Commercial General Liability (CGL) Insurance and other policies could later be involved.

Marine Insurance generally includes Hull Insurance to cover physical damage to the boat itself and P&I Insurance for third-party property damage and bodily injury coverage. This liability coverage usually extends to third parties outside of the boat and those on the boat, with the exception of any crew. In the case of a serious accident that leads to a lawsuit, covered expenses could include legal defense, medical bills and settlements, Wheeler said. When obtaining insurance, companies would need to specify whether they offer captained charters or bareboat charters.

The accident reinforces the importance of stringent safety measures for boat rental companies and the need for Marine Insurance, particularly Protection and Indemnity (P&I) Insurance, said Noah Wheeler, Broker, Marine, Burns & Wilcox, Fort Lauderdale, Florida.

Given the risk of severe losses, Excess Liability Insurance is often recommended. “At a minimum, a company would have $200,000 in liability limits up to $1 million or $2 million. Sometimes policies can exclude punitive damages, as well,” Dewart said.

“It is full of young individuals, many of whom are intoxicated, and there are many boat motorists who may not be properly trained,” said John Dewart, Senior Broker, Casualty, Burns & Wilcox, Chicago, Illinois.

Business owners in this industry should have their rental agreements and liability waivers reviewed by an expert, Wheeler suggested, and they should work with an insurance broker who specializes in Marine Insurance. ■ 31

Over the past several years, Workers’ Compensation Insurance rates have remained stable or declined, but a continual rise in claims or claim costs could start to reverse that, Dorman noted. “I do not think carriers are going to increase rates right now, but we may have a better idea of the impact of these trends in two to three years,” he explained. “However, I do not think we will see it become a hard market because of how slow the industry moves. It is an industry that we can monitor closely and keep up with the trends.” ■

INSURANCE MARKET SOURCE | WINTER 2023/SPRING 2024

resulted in expanded policy language to include coverage for technology services and products, as well as network security as part of a contractor’s professional services.

PROFESSIONAL MARKET UPDATE June 27, 2023 — Today’s construction industry is faced with numerous challenges given ongoing supply chain issues, inflationary concerns and labor shortages. The result is a complex environment where contractors are often taking on additional responsibilities and facing new risk exposures that traditional policies exclude. The RB Jones Professional team developed and launched ProConstruct, an exclusive program providing Professional Liability coverage to a broad range of professionals within the construction lifecycle. The ProConstruct policy includes updated language to address a number of emerging issues. Increased legal liability for contractors for negligence resulting from the management of a project, including managerial oversight, constructability reviews, subcontractor selection and scheduling. ProConstruct includes language specific to managerial

Need to preserve the relationship between the contractor and the project owner requires language that provides for rectification expense coverage and protection for claims that allege faulty workmanship from negligent managerial oversight. Both coverages are vital for the contractor as it ultimately keeps projects on time and avoids cost overruns. oversight, subcontractor selection and constructability review, adding to the definition of professional services while removing the licensing requirement. Broader language enables ProConstruct to address coverage gaps because these services are typically excluded within the general liability policy. Greater use of and integration with technology across construction projects, from design and installation of “smart” HVAC systems to robust data centers, has

Growth in use of less-experienced subcontractors due to labor shortages and inflationary pressures has led to project delays, extended project delivery times and worker safety concerns. A contractor protective indemnity clause provides dedicated excess limits over subcontractor policies. This helps prevent “claim creep” from uncovered claims eroding the contractor’s professional liability limits. A protective also forces quicker settlements from subcontracted staff and ensures projects remain on track. ■

INSURANCE MARKET SOURCE | WINTER 2023/SPRING 2024

EMBRACING OPPORTUNITY & INNOVATION A conversation with H.W. Kaufman Group Chairman, President and CEO Alan Jay Kaufman about building a global organization, the importance of trusted relationships, and the industry’s future

n July, Business Insurance presented H.W. Kaufman Group Chairman, President and CEO Alan Jay Kaufman with the prestigious 2023 Lifetime Achievement Award in New York City. Mr. Kaufman was also inducted into the Business Insurance Hall of Fame.

It was 15 years later that I spoke to my father about leading H.W. Kaufman Group.

What early influences would later shape your vision for the company? AJK: While studying in London, I worked for a Lloyd’s of London broker and underwriting agency.

The recognition reflects his unwavering commitment, visionary leadership and unparalleled contributions to the insurance profession. Having inspired countless colleagues worldwide, he has shaped the next generation of industry trailblazers.

It was exciting and a stark contrast to what the perception of the insurance industry was in the United States. Looking back on that experience, it had a profound influence on me.

Insurance Market Source recently sat down with Mr. Kaufman for a one-on-one conversation to explore his legacy and what he envisions for the future.

In the early 1990s, H.W. Kaufman Group and Burns & Wilcox were growing across the country, but I aways felt that the real opportunity was to build the business internationally. In 1996, after returning the company from public to private family ownership, I was determined to rapidly expand our international presence. Beyond the United States, today there are Kaufman companies in Canada, London, across the United Kingdom and Europe, along with South America. Our global footprint creates significant opportunities for our associates, clients and partners.

Looking at your career milestones, did you always envision working within the insurance industry and leading the family company?

AJK: I was encouraged to go after my passions. As a young teenager, I ran a landscaping operation and other small businesses. It was my love of animals that led me to Michigan State University with the intent of becoming a veterinarian. However, my interest in business, civics, and law ultimately took me to the university’s business school.

What was behind the decision to return the company to private ownership?

Following graduation, I pursued a law degree at the University of Notre Dame and spent over a year studying abroad in London.

AJK: It was the biggest gamble of my life. I had to raise funds personally and refinance my home. Nearly 30 years later, our private ownership remains a tremendous competitive advantage.

I was certainly exposed to my father’s insurance business, but at the time I was motivated by my passion for entrepreneurship and building something of my own. In the late 1970s I started my law firm and took on business and insurance-related clients.

As a privately held, family-owned and operated organization, our financial flexibility gives us the freedom to make the required investments that elevate our associates. Our competitors, who are beholden to Wall Street, private equity or other outside investment, do not have a similar ability.

I was able to maintain a connection to the industry and watch as H.W. Kaufman Group and Burns & Wilcox continued expanding. 34

As an independent organization, we are in an enviable position that enables Kaufman to always put our people first — that is a pillar of our company, which began with my father more than 50 years ago. He would call every associate on their birthday. He personally gave out pins to celebrate and recognize their years of service, which is a tradition we continue today. A hallmark of our culture today is the commitment to make significant investments in our associates. We built Kaufman Institute as an industry-leading continuing education platform to foster the continued career development of our team members. Right now, we are in the midst of $100M technology implementation that will transform our systems, speed processes and make it much easier for our associates to be successful.

Alan Jay Kaufman receives the 2023 Business Insurance Lifetime Achievement Award and was inducted into the Insurance Hall of Fame.

There is a long list of companies that were once on top but deteriorated rapidly after taking on sizable debt and outside investments. Our leadership, expertise, global reach and capabilities place Kaufman in an enviable position and primed for decade-over-decade growth. That is our playbook today and always.

What type of impact have your children, Danny and Jodie, had on the organization? AJK: It gives me great pride to work alongside them every day. Danny and Jodie share my vision that Kaufman remains fiercely independent, with the intention that their children and grandchildren will serve as the next generation of leaders. The industry has historically been slow to adapt and reluctant to embrace change or evolve. Danny and Jodie have championed our own transformation, without disrupting the core fundamentals of our company.

Alan Jay Kaufman with his father and founder of H.W. Kaufman Group, Herbert W. Kaufman.

We have pushed to bring on new talent from outside the insurance industry. Our organization is committed to adopting new technology solutions that will drive efficiencies and spark significant growth. Importantly, we understand the value in caring for and propelling our associates forward. Under their leadership, we have created events such as the Producer Forum to honor our top performers along with an industry-leading DE&I initiative that is embracing the uniqueness of our associates to tackle complex business challenges.

Looking into the future, where does Kaufman go from here? AJK: The company will continue expanding its presence, across North America and worldwide. We will be aggressive in targeting the very best talent available, along with making strategic acquisitions that extend our footprint and broaden our capabilities. Kaufman will also evolve to respond with solutions as risks continue emerging and the world becomes increasingly complex. It is an exciting time for our industry and proudly, Kaufman and our 2,000 associates worldwide are built for this moment.

Alan Jay Kaufman travels to Antarctica with the Detroit Zoological Society. Mr. Kaufman is on the Board of Directors for the organization.

the trust and confidence of our clients and partners. The award reflects the strength of our collective team. The industry overall will continue to protect clients, manage risks and deliver much-needed assistance when catastrophe occurs.

Tell us about receiving the Lifetime Achievement Award, and share your perspective on what’s next for the insurance industry overall.

Throughout my career the industry has evolved. The speed, quality and service will also improve — for the brokers, agents and carriers, as well as the policyholders that depend on us.

AJK: Receiving the award was a humbling experience and very touching. Even though it is a Lifetime Achievement award, I am just getting started and am ready for my “second act.”

Technology will continue to play a prominent role and transform how we transact business. At the same time, relationships will remain our most powerful asset. Market conditions are hard. New risks are emerging every day. The most successful companies will lean into their trusted relationships — delivering creative solutions regardless of market conditions or risk climate. ■

My name may be on the award, but our team, clients and partners are really the recipients. The energy and hard work of the 2,000+ dedicated Kaufman professionals worldwide have built the company into the global leader it is today. Together, we have earned 35