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Serving New York, New Jersey, Connec cut, Eastern Pennsylvania and Washington, DC
Cyber Security
(continued‌)
Vol. 127 No. 8 | April 25, 2016
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Contents
April 25, 2016 | Volume 127 Number 8
[COVER STORY] 22
In the Associations: UJA to Casserley, Dangelo, and Hershman at General Insurance Annual Dinner PIA Calls on Agents to Participate in Performance Surveys
16
Cyber Security (continued…)
23
In the Associations: Bill Wilson Honored with Jeff Yates Award
24
In the Associations: IIS Forms Insurance Development Forum
25
Guest Opinion: Zika: Crisis or Sentinel Event? Jane M. Orient, M.D.
26
On My Radar: Damage, Not Negligent Acts, is Occurrence Barry Zalma
28
Courtside: No Witness, No Evidence, Nothing but a Theory Held Sufficient to Sustain Jury Award in Pedestrian Fatality Lawrence N. Rogak, Esq.
30
Looking Back: March, 1991
33
Classifieds
[FEATURES] 4
Foreword: Vrooom Steve Acunto, Publisher
6
Exposures and Coverages: Court Rules for the Insured in First Late Notice/Prejudice Case; Expand Contingent BI/Dependent Properties Cover for Your Clients; Short Takes: Large Exposures Jerome Trupin, CPCU
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In the Associations: IIABNY CEO Dick Poppa to Retire After 38-Year Career The Social Notebook: Agency Website Metrics via Google Analytics Chris Paradiso On the Level: Sounding an Alarm for the Future N. Stephen Ruchman, CPIA In Focus: Summer Agency Marketing Strategies Kelly Donahue-Piro
[AD FEATURES] 15
PIA: 2016 Annual Conference
19
LICONY: Leaders Throughout Life Insurance Industry
info@insurance-advocate.com www.insurance-advocate.com INSURANCE ADVOCATE / April 25, 2016 3
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[ FOREWORD ]
STEVE ACUNTO
Vrooom
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VOLUME 127, NUMBER 8 APRIL 25, 2016
uThe New York Insurance Association (NYIA) advises that from 2014 to 2015 motorcycle thefts in New York increased by 23 percent. According to a report from the National Insurance Crime Bureau (NICB), motorcycle thefts nationwide increased by six percent during the same time period, rising for the first time in ten years. New York State had the fifth highest rate of motorcycle theft in the U.S. in 2015, up from a ranking of six in the
to his native Indiana with Kim and memories of great service to the system (see article this issue). Dick set out to be a relentless advocate of the agent and the system and measured up again and again to that goal. We wish the Poppas Godspeed, as should all agents in the State. … Percy Chubb, III passed away some days back and left a long string of accomplishments in the field and in philanthropy as a legacy. We join with all who mourn his
New York State had the fifth highest rate of motorcycle theft in the U.S. in 2015, up from a ranking of six in the previous year. From 2014 to 2015, the number of thefts of motorcycles in the state increased from 1,544 to 1,902, resulting in the 23 percent increase. previous year. From 2014 to 2015, the number of thefts of motorcycles in the state increased from 1,544 to 1,902, resulting in the 23 percent increase. The most thefts throughout the U.S. occurred in August, and the fewest thefts in February. This is consistent with theft rates in previous years and suggests a continued weather-related pattern. Good material for a client alert. … Dick Poppa has been on the road, on the podium and on the air for Independent Agents for nearly four decades and he is now heading back
loss. … PIANY has its LI RAP set for May 4th at the Crest Hollow – see you there. … A New Yorker may be tapped, we hear, to head the Florida Insurance Department – a talented one. … Charles H. Dangelo, Dominic Casserley and Richard Hershman will be honored by the UJA on May 31st in New York. On a personal note, happy to see Rich getting the accord as a long-time exponent of the industry and friend to so many, dating back to his days at Public Service Mutual. See this issue for details. … See you there.[IA]
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EDITOR & PUBLISHER Steve Acunto 914-966-3180, x110 sa@cinn.com CONTRIBUTORS Peter H. Bickford Jamie Deapo Kelly Donahue-Piro Michael Loguercio Christopher Paradiso Lawrence N. Rogak N. Stephen Ruchman Jerome Trupin, CPCU Barry Zalma PRODUCTION & DESIGN ADVERTISING COORDINATOR Creative Director Gina Marie Balog 914-966-3180, x113 g@cinn.com COPYEDITOR & PROOFREADER Maria Vano mariavano9@gmail.com SUBSCRIPTIONS P.O. Box 9001, Mt. Vernon, NY 10552 914-966-3180, x111 circulation@cinn.com PUBLISHED BY CINN Media, Inc. P.O. Box 9001, Mt. Vernon, NY 10552 (914) 966-3180 | Fax: (914) 966-3264 www.cinn.com | info@cinn.com President and CEO Steve Acunto
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INSURANCE ADVOCATE® (ISSN 0020-4587) is published bi-monthly, 20 times a year, and once a month in July, August, September and December by CINN ESR, Inc., 131 Alta Avenue, Yonkers, NY 10705. Periodical postage paid at Yonkers, NY and additional mailing offices. POSTMASTER Send address changes to Insurance Advocate®, P.O. Box 9001, Mt. Vernon, NY 10552. Allow four weeks for completion of changes. SUBSCRIPTION RATES $59.00 US, Canada $65.00, International $110.00. TO ORDER Call 914-966-3180, fax 914-966-3264, write Insurance Advocate® PO Box 9001, Mt. Vernon, NY 10552 or visit www.Insurance-Advocate.com. INSURANCE ADVOCATE® is a registered trademark of CINN ESR, Inc. and is copyrighted 2016. All rights reserved. No part of this magazine may be reproduced in any form without consent. Trademark registered U.S. Patent and Trademark Office.
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Power. Balance. Pride.
New York Insurance Association
KNOW KNOW BE BETTER T TER NEW NE W YORK YORK CONNECTIONS CONNEC TIONS www.nyia.org w w w.nyia.org
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[ EXPOSURES & COVERAGES ]
JEROM E TRUPIN, CPCU
Court Rules for the Insured in First Late Notice/ Prejudice Case; Expand Contingent BI/Dependent Properties Cover for Your Clients; Short Takes: Large Exposures Court Rules for the Insured in First Late Notice/ Prejudice Case In what may be the first appellate court case involving the 2009 New York law requiring the insurer to show that it was prejudiced by the insured’s giving late notice of an occurrence, the Fourth Judicial Department1 ruled in favor of the insured. The decision highlights the difficulties insurers will have in denying coverage for liability claims in New York due to late notice. On July 29, 2012, Lisa Slocum was riding in a car that was struck in the rear by another vehicle. On September 11, 2012, Lisa (probably through her attorney) found out that the policy covering the car that hit hers had a $50,000 limit. On June 6, 2013, she underwent cervical fusion surgery. She was entitled to underinsured motorist coverage via her mother’s Progressive Northwestern auto policy. In August, 2004, more than two years after the accident, Lisa notified Progressive of the accident and sought coverage under the supplemental uninsured/underinsured motorist (SUM) endorsement of the policy. Progressive disclaimed coverage due to late notice and Lisa started suit. The lower court rejected Lisa’s motion for summary judgment and Lisa appealed.
The policy required that the insurer be given notice of an occurrence as soon as practicable. The appellate court held that meant “with reasonable promptness after the insured knew or should reasonably have known that the tortfeasor (wrongdoer) was underinsured,”2 and that Lisa did
…the court concluded that Progressive failed to show that post-surgery examinations and medical records would not yield the information.
not meet that requirement. However, the court further ruled that Insurance Law § 3420 (a)(5) added the requirement that the insurer show that it was prejudiced in order to deny liability for late notice. Progressive submitted an affidavit from one of its claims representatives stating “that it was prejudiced because of its inability to examine the vehicles involved in the accident,” and that the insurer “suffered prejudice because it was unable to conduct an examination under oath or an inde-
Jerome “Jerry” Trupin, CPCU, is a partner in Trupin Insurance Services located in Sleepy Hollow, NY. He provides property/casualty insurance consulting advice to commercial, nonprofit and governmental entities. He is, in effect, an outsourced risk manager. Jerry has been an expert witness in numerous cases involving insurance policy coverage disputes and has taught many CPCU and IIA courses. Jerry has spoken across the country on insurance topics and is the co-author of over ten insurance texts used in CPCU and IIA programs including Commercial Property Risk Management and Insurance and Commercial Liability Management and Insurance. He regularly contributes articles to CPCU Society publication, the Insurance Advocate®, and others. He can be reached at jtrupin@aol.com. Thanks to Jerry Trupin for this article and to the CPCU Society for letting us reprint it.
pendent medical examination of plaintiff before she underwent cervical fusion surgery in June 2013.”3 The court decided that the cars would have been repaired in the time between the accident and the date that plaintiff was required to give notice under the policy. With regard to Progressive’s loss of the opportunity to conduct an independent medical exam, the court concluded that Progressive failed to show that post-surgery examinations and medical records would not yield the information. Obviously, prior to the new law requiring the insured to show prejudice, the court would have ruled in favor of Progressive. CONTINUED ON PAGE 8
1 The Fourth Judicial Department encompasses 22 upstate western and central New York counties. Its rulings are binding only on the lower courts in those counties. 2 Lisa L. Slocum v Progressive Northwestern Insurance Company, 2016 NY Slip Op 02182 Appellate Division, Fourth Department, March 25, 2016 Slocum v Progressive, Op. Cit. 3 Acronyms present a problem, too. Property insurance underwriters and adjusters refer to business interruption as “BI,” but to most other insurance practitioners, “BI” means bodily injury.
6 April 25, 2016 / INSURANCE ADVOCATE
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[ EXPOSURES & COVERAGES ] CONTINUED FROM PAGE 6
There was an interesting complication in this case. The amended law provides that after two years, the burden of proof shifts to the claimant to prove that the insurer was not prejudiced, rather than the insurer having to prove that it was prejudiced. Satisfying the burden of proof in a matter as subjective as prejudice is difficult. Progressive argued that the two years should start with the date of the accident. The court ruled, as noted above, that the two years starts when the claimant should have known that the other party was underinsured. The appellate court ruled in Lisa’s favor. Many insurance attorneys feel it will be difficult for insurers to win latenotice cases in New York if the report is made before the end of two years, when the burden of proof shifts to the insured.
Expand Contingent BI/Dependent Properties Cover for Your Clients The insurance industry is tripping over its terminology. When you talk to clients about Contingent Business Interruption and Dependent Properties coverage, do you get anything but a blank stare? Two names for the same, and to the public, undecipherable coverage. “Dependent properties” is the new name for what the industry has long referred to as contingent business interruption coverage. It has the advantage of being somewhat decipherable when you explain it to clients, they should have some idea how the name came about. I defy anyone to find any relationship between the title “contingent business interruption” and the coverage. After all, every insurance coverage is contingent. Fire insurance coverage is contingent on fire damaging the property. By whatever name you refer to them, dependent property or contingent business interruption4 are widely-overlooked coverages that result in large uninsured losses even for large insureds that have sophisticated brokers and/or skilled risk management departments. A case in point is a loss sustained by DIRECTV.5 DIRECTV provides digital entertain-
ment via satellite. Its satellite dishes pick up signals and transmit them to a DIRECTV set-top box (or “STB”), which is linked to the subscriber’s television. DIRECTV demonstrated good risk man-
“The fact that ‘direct supplier,’ in contrast, is not defined anywhere in the policy suggests that the parties did not intend the term to carry any technical or specialized meaning.”
agement diversification by contracting with four different manufacturers to produce the STBs. However, it turned out that all four depended on just two firms, Western Digital and Seagate, to supply the hard drives that were the key part of the STB. DIRECTV knew that the hard drives were manufactured by just the two firms as it discussed specifications and components for the drives with them. However, DIRECTV had no contracts or agreements with the hard drive manufacturers. In October 2011, extensive flooding, caused by the monsoons that year, severely damaged Western Digital’s hard drive manufacturing plant in northern Thailand. Western Digital was able to make up some of the lost manufacturing capacity by overtime work in its plant and DIRECTV was able to get some additional drives from Seagate. DIRECTV calculated that the resulting price increase for Western Digital hard drives and the expense of obtaining substitute drives from Seagate, cost DIRECTV approximately $22 million in extra expense. It looked to its insurer, Factory Mutual, for coverage for the loss. DIRECTV’s policy included coverage for business income and extra expense losses resulting from damage to facilities of direct suppliers. But Factory Mutual said that coverage did not apply to losses resulting from damage to those firms that sup-
plied the suppliers. DIRECTV sued. DIRECTV argued that the phrase “direct supplier” should be defined according to its usage in the electronics supply chain industry. However, the court pointed out that DIRECTV provided no evidence that the parties intended “direct supplier” to have some technical or industry-specific definition, nor was there any usage of that phrase either within or outside the policy that would suggest a definition other than the ordinary and popular one. Furthermore, the court noted that the policy does include specialized definitions such as “location,” “occurrence,” “wind,” “earth movement,” “flood,” “terrorism,” “contamination” and others, as well as definitions of less common phrases such as “soft costs.” The court concluded that “The fact that ‘direct supplier,’ in contrast, is not defined anywhere in the policy suggests that the parties did not intend the term to carry any technical or specialized meaning.”6 Apparently DIRECTV had contingent business interruption coverage, but did not have coverage for secondary dependencies. ISO introduced secondary dependency coverage in 2013 to cover business income and extra expense loss resulting from damage at secondary contributing and recipient locations not listed for dependent coverage. A secondary dependent location is defined as follows: “Secondary contributing location” is an entity which: a. Is not identified in the Schedule; b. Is not owned or operated by the Contributing Location identified in the Schedule; and c. Delivers materials or services to the Contributing Location identified in the Schedule, which in turn are used by that Contributing Location in providing materials or services to you. A road, bridge, tunnel, waterway, airfield, pipeline or any other similar area or structure is not covered as a “secondary contributing location.” Nor are water supply services, power supply services, wastewater removal services, communication supply, Internet access, and network access services. CONTINUED ON PAGE 10
4 DIRECTV v. Factory Mutual Insurance Company, CV 14-08673 U.S. District Court, C.D. California, February 1, 2016. DIRECTV is now a subsidiary of AT&T. I asked their risk management department for comment, but I haven’t had any response. 5 DIRECTV v Factory Mutual, op. cit. 6 “CONTINGENT TIME ELEMENT EXTENDED Protect Your Entire Supply Chain” https://www.fmglobal.com/products-and-services/products/businessinterruption-coverage
8 April 25, 2016 / INSURANCE ADVOCATE
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[ EXPOSURES & COVERAGES ] CONTINUED FROM PAGE 8
Coverage is similarly available for secondary recipient locations that receive materials or services from a recipient location identified in the schedule. An example should clarify these points; DIRECTV’s operations provide examples of both secondary contributing and secondary recipient locations. It’s two sides of the same coin. From DIRECTV’s point of view, Western Digital is a secondary contributing location; Western Digital manufactures hard drives that others incorporate into the product that DIRECTV needs. Viceversa, from Western Digital’s point of view, DIRECTV is a secondary recipient location; DIRECTV purchases a product from others that incorporates the hard drives manufactured by Western Digital. Such coverage would be triggered by damage to DIRECTV’s facilities that prevented DIRECTV’s direct contributing location from selling it set-top boxes that incorporated Western Digital’s hard drives. Thus, DIRECTV and Western Digital can sustain business income and extra expense losses by damage to property owned or operated by the other, even though they have no direct or contractual relationships. However, ISO’s Dependent Property form would not have applied to DIRECTV’s loss in this case. ISO’s form does not apply to losses that occur outside the policy’s coverage territory. ISO does offer limited international coverage in another endorsement (CP 1501 1012 Business Income From Dependent Properties Limited International Coverage). But it is, as the title implies, limited coverage. Factory Mutual and others can provide worldwide coverage and other enhancements, including contingent or dependent property direct and secondary coverage. Factory Mutual offers a coverage they call Contingent Time Element Extended (CTEE). The title is not exactly a model of clarity, but the coverage would apply to the DIRECTV loss. It states that “It’s unique in the marketplace—the only contingent time element coverage that extends, without limit to the length of the supply chain, beyond your direct suppliers and customers.”7 Apparently, DIRECTV’s Factory Mutual policy didn’t include CTEE.
Florida has 72 miles of ocean front, but New York, New Jersey and Connecticut have lots to worry about also. For clients, risk management theory dictates combining insurance with loss control whenever possible.
I haven’t been able to determine if it was offering it at the time of the loss or if DIRECTV didn’t buy it. Either way, I’m surprised. It’s true that ISO did not have an endorsement to provide that coverage until 2013. However, Factory Mutual prides itself on offering superior coverage and caters to large enterprises that are more likely to have the exposure than the typical ISO insured. As to DIRECTV, it had risk management professionals on staff even before their incorporation into the AT&T behemoth. Risk managers should have spotted the gap. PRACTICE POINT: You’re probably already asking about suppliers, customers, etc. on which the insured is dependent. Now add this question to your fact-finding interview: are any of your suppliers, cus-
tomers etc. themselves dependent on their own suppliers or customers?
Short Takes on Significant Topics: Large Exposures Big losses catch the insured’s attention. Watch for them. Here are three that I saw in the April 6th online edition of “Advisen Front Page News.” Flooding “The concrete block perches absurdly atop a piling, elevated about 10 feet above the beach sand. Is it art? A bulky milepost?” That’s the opening sentence in a New York Times online posting about erosion at the Kennedy Space Center at Cape Canaveral.8 The block was once at grade level to secure antenna towers and was 150 feet from the shoreline. Now the block is 10 feet in the air and just 10 feet from the shoreline. Florida has 72 miles of ocean front, but New York, New Jersey and Connecticut have lots to worry about also. For clients, risk management theory dictates combining insurance with loss control whenever possible. A suburban New York school district has had two flood losses in the past 10 years that caused $25 million in damages in total. In partnership with the municipality, they are building a pumping- and holding-tank system. The school district is contributing the land for the tanks and
CREDIT: MELISSA LYTTLE FOR THE NEW YORK TIMES
8 “NASA is Facing a Climate Change Countdown,” New York Times, Thursday, April 7, 2016 http://universewire.com/id/16230019422
10 April 25, 2016 / INSURANCE ADVOCATE
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[ IN THE ASSOCIATION ] about $1,000,000 to fund the project. In addition to avoiding the cancellation of classes and the sturm und drang that follows a major flood, they’re hoping to lower their insurance cost. Theft Huge theft losses still occur. In the middle of the night of March 14, 2010, in what sounds like the plot of a Hollywood movie, thieves broke through the roof of an Eli Lilly warehouse in Enfield, CT, rappelled to the floor, disabled the alarm system, and loaded more than $42 million worth of prescription drugs onto a truck they had parked at a loading dock. The roof area and the loading dock were the only areas not covered by security cameras. The gap had been identified in a security survey by Tyco (formerly ADT) which provided alarm service for the Eli Lilly building. In a no-good-deed-goes-unpunished scenario, Eli Lilly’s insurer, National Union, sued Tyco as subrogee of Eli Lilly. It was the report of the lawsuit, which National Union lost, that alerted me to this incident.9 Another School District Flood Loss – This Time Under Insured A school district in Deweyville, Texas faces an $11.5 million shortfall in its flood insurance coverage.10 Although the district carried a $30 million property policy, school officials were shocked to learn that the flood coverage was sub-limited to a much lower amount. Four hundred homes in the town were also caught in the flood and most of them were entirely uninsured. There are many markets that offer excess flood coverage. They should have looked for them. PRACTICE POINT: Be sure clients are aware of policy sub-limits. In addition to helping your clients, you may sell added coverages that your clients need. What’s more, you’ll avoid irate clients and E&O claims at the same time.[IA] 9 “Jury: Security firm not liable for $60M heist from Eli Lilly” Advisen Property Front Page News Thursday, April 7, 2016 http://www.advisen. com/tools/fpnproc/fpns/articles_new_3/P/2570 36014.html 10 “Deweyville ISD faces $11.5 million gap between damages, insurance” Advisen Front Page News 4/6/16 http://www.advisen.com /tools/fpnproc/fpns/articles_new_3/P/2569879 66.html
IIABNY CEO Dick Poppa to Retire After 38-Year Career uThe Independent Insurance Agents and Brokers of New York (IIABNY) announced that president and CEO Richard Poppa, CAE, AAI, will retire at the end of 2016 after leading the association for nearly 20 years. “When you say the name Dick Poppa to industry peers, a smile immediately appears. From the warmth and unwavering integrity with which he handles all people and business, to his tireless work ethic and forward-thinking strategic planning, his reputation precedes him,” said IIABNY Chair of the Board Todd Rockefeller. “Dick has dedicated his life’s work to strengthening the Independent Agency channel and his impact has been felt around the country. IIABNY has been blessed to benefit from his talent and inspiration for almost two decades of a storied career. He will be greatly missed.” A proud native of Indianapolis, Indiana, Poppa (pronounced “Poppy”) has served as IIABNY’s chief staff executive officer since 1996. Prior to that, he served as senior vice-president and chief operating officer for the Independent Insurance Agents Association of America; executive vice-president of the Independent Insurance Agents of Indiana; administrative vice-president of the Independent Insurance Agents and Brokers of California; staff member at the Insurance Institute of Indiana; and press aide to the lieutenant governor of Indiana. In addition to his work with IIABNY, Poppa was a catalyst for, and held a leadership position with, TrustedChoice.com. A recipient of many honors in his career, he most recently received the Jeff Yates Lifetime Achievement Award from the Independent Insurance Agents & Brokers of America. “It has been my privilege to serve independent agents, to innovate with an incredible team, and I’m proud of the work we have accomplished together,” said Mr. Poppa. “The true highlight of my career has been the amazing people we have been blessed to spend time with and now call
RICHARD POPPA
“Dick has dedicated his life’s work to strengthening the Independent Agency channel and his impact has been felt around the country. IIABNY has been blessed to benefit from his talent and inspiration for almost two decades of a storied career. He will be greatly missed.”
our lifelong friends. In my life, that means the most.” Dick and his wife Kim will enjoy their passion for travel in retirement, from a home base in Indiana. While Poppa will contribute to a few business projects and advisory boards, he is excited to increase involvement with charitable activities, especially animal welfare. The IIABNY Board of Directors has formed a search committee, comprised of agent leaders, and a national search firm has been selected.[IA] INSURANCE ADVOCATE / April 25, 2016 11
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[ THE SOCIAL NOTEBOOK ]
C H R I S PA R A D I S O
Agency Website Metrics via Google Analytics “Celebrate what you accomplish, but raise the bar every time you succeed.” - Mia Hamm uI don’t care who you are, where you come from, whether you’re an individual or an agency, or whether you’re in or outside of the insurance space…No one, no matter who, has the ability to improve without accepting some form of constructive criticism, realizing that they are not perfect; or tracking and taking advantage of where they went wrong and where they went right. How can we ever eliminate our weaknesses if we never begin by identifying them? Similarly, how can we capitalize our strengths if we can’t recognize them to begin with? This is why tracking metrics and analytics within your agency is so crucial, and today I’d like to tell you a little bit about tracking your website’s metrics in order to capitalize on your strengths, and push your weaknesses aside. You can develop your own constructive criticism by “looking in the mirror” when it comes to your agency’s website (which is your marketing powerhouse), but you need to start with some strong, quantifiable data, and that starts with Google Analytics.
the ball rolling. Also, GA tracks your audience’s behavior, so you’ll need a Privacy Policy online that lets your audience know that your website tracks online behaviors. If you need a sample of a Privacy Policy to take a look at, then check out ours at
You can develop your own constructive criticism by “looking in the mirror” when it comes to your agency’s website (which is your marketing powerhouse), but you need to start with some strong, quantifiable data, and that starts with Google Analytics.
Christopher Paradiso, CPIA , is President of Paradiso Financial & Insurance Service. He has been acknowledged by several insurance publications as a leader in the industry for his use of digital marketing and social media to help brand his agency and promote other small businesses within his community. Chris has also been recognized for his charity work with The Connecticut Children’s Medical Center. In 2011, Chris introduced “Paradiso Presents LLC,” a social media program aimed at teaching small agencies to not only survive, but compete in today’s complex online marketing world. Chris resides in Stafford Springs, CT with his wife and two children, Mia and Gianni.
An Introduction to Google Analytics Just in case you’re not familiar with Google Analytics (GA) yet, I’ll give you a basic rundown. It is a service that you can sync to your agency’s website to provide you with data, and very accurate data, that will tell you about your website’s activity, engagement, the demographics of your audience, the geographical location of your audience, the number of users and how they behaved on your website, and more. The first place to get started with GA is to sign up by going to analytics.google.com. Once you’re on the page, you can click “Sign Up” on the right side, and it will bring you through a series of prompts to fill out with your information and your website’s information to get 12 April 25, 2016 / INSURANCE ADVOCATE
www.paradisoinsurance.com/privacy-policy/. If you’re not exactly sure what you’re doing with writing a Privacy Policy though, seek professional help from a website designer or someone like an SEO specialist, which is who we go to for help at our agency.
Tracking Your Website’s Metrics After you get things initially set up with your GA account and your website’s information is all synced, you’ll be able to start tracking data, and data that is incredibly powerful. The main metrics that it provides
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[ THE SOCIAL NOTEBOOK ] you with (right on their main dashboard when you sign in) is the number of sessions, users, page views, pages per session, average session duration, your bounce rate, and your percentage of new sessions on your website. Let’s talk about each of these metrics individually, but it’s important to note that within GA you can adjust the timeframe of your data measured in the upper righthand corner of any screen. After you adjust the timeframe you’d like to measure, you can look at your data accordingly, by: Number of sessions, that is basically the number of times your website is accessed; User count, or the number of people who accessed your website; Page views, the total number of your website’s web pages that were accessed by your users; Pages per session, the average number of total web pages someone visited while they were on your website; Average session duration, basically the average amount of time a person spends on your website whenever it is accessed; Bounce rate, that tells you how many people exited your website after viewing only one landing page; and Percentage of new sessions, how many people accessing your website are visiting for the first time.
Data Driven Improvement So now that you have the data in front of you, what are you supposed to do with it? Well, thankfully Google is very specific and detailed in their tracking, so we can look for multiple places that we can maximize, optimize, and/or improve our presence online with all aspects of our digital marketing. First, you need to analyze some of the data on your GA dashboard, as ironic as that sounds. For each metric that we discussed above, you can actually click on it on your dashboard and get a graph, or a visual representation of the data. Anywhere the data dipped down too low, you can click on the graph to get a detailed report about what happened on that day and figure out where you went wrong, to eliminate your weaknesses. Similarly, you can also take a look at each day or spot on your charts that your data was very healthy, and figure out why, and then replicate that process in the future to get similar traction or results. As an example, if I had one day that had a huge dip on my graph of users, I may want to investigate that day. If I click on it, and I realize that it was Christmas that day, then essentially there may be nothing wrong there, because you will simply get
less traction online on a holiday. But, if I click into a day we had a dip and see that it’s a regular workday, and there were no outside influences that factored into my data, then it’s time to look at our posts and content for the day. We can compare the good days to the bad to see which content or posts performed better on each corresponding day, and leverage our future posts to get more engagement online. At the end of the day, we are looking to get more engagement in the digital world. More people will see our message
and brand, we will grow a larger audience, and overall, increase our agencies’ ROIs. Figure out what’s working and what’s not, and optimize wherever you see the opportunity by having real, measurable data. As always agents, happy marketing![IA]
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[ ON THE LEVEL ]
N. STEPHEN RUCHMAN, CPIA
Sounding an Alarm for the Future uFor decades, I worked with a local alarm company that knew my home alarm system inside and out. Early this year, I received a letter from a different alarm company based in Wichita, Kansas, informing me that it had taken over my local vendor and if I had any questions or issues, I could call their 800 number for customer service. You know where this is going: Earlier this month, I had a problem with my alarm. I must have pressed the wrong button, and now every time I open a window or door it beeps. So, I called the company in Kansas. The young woman who answered told me she was unfamiliar with my particular system, but she would read the manual and get back to me about my alarm beeping. After an hour and a half, I was frustrated. I called back and said I wanted to talk to someone who could help me with my local system. She said she couldn’t do that. Now, two weeks later, I am still waiting. Beep. Beep. Beep … This reminds me of a concerning phenomenon taking place in our industry. Independent agents are selling their businesses to investment companies at a pace we’ve never before experienced. When relatively young agents give up the entrepreneurial life to provide profits to the investment company, they lose their autonomy, their local connections and their ability to work as they see fit within their communities. But, the most worrisome part of this trend is that as the economy cycles, the investment companies will expect a continued rise in profits without concern for the individual businesses or their clients. And, when that trend subsides (and we know it will), they will sell off, merge or close the formerly independent agencies. It’s not difficult to see the similarity to what happened with my alarm system: Our clients try to get the service and attention from a local agent with whom they originally signed up, only to find they are no longer there. It makes me sad. Owning an independent agency is a good life. Admittedly, 14 April 25, 2016 / INSURANCE ADVOCATE
it is not easy, but the rewards are both financial and we get to choose our work and lifestyles for ourselves. We are captains of our own fates—a treasure worth working hard for. We can take pride in our success because it is ours, and we are responsible for it. No investment company or direct writer can claim it bailed us out.
It’s up to us as agents to contact our carrier partners and tell them what we need through our marketing reps, at producer panels and at every opportunity we have.
One way to maintain control of our destiny is to establish strong communication with our carrier partners. So often, we complain that our companies don’t listen to us; that we see our marketing reps too seldom. Since when are professional independent agents the types to sit and wait for someone to come to us? Another way we can take more control of our fate is to keep up with the times. Technology waits for no one. The investment we make in learning and using it usually pays for itself with efficiency, time saving and financial return. We need to work with our customers on their terms— or else we risk losing them to the direct writers. One initiative that can help every small independent agency do this is establishing the ability for an agent to bind a policy through the agency’s website. This would allow agents to compete with direct writers, auto dealers and others who are reaching out to our customers 24 hours a day, seven days a week. PIA has been working with ACORD to develop a Buy Button—an agent website
N. Stephen Ruchman, CPIA , is a retired independent agent and founder of Ruchman Associates, Inc. the agency he started in 1961. A past president of the Professional Insurance Agents of New York State, Inc., he is an active supporter of PIANY, and he has sat on or chaired nearly every committee including the Executive Committee and the Long Island Advisory Council and PIANY’s Political Action Committee. He can be reached via email at: nsruchman@gmail.com.
portal that would provide such access to customers any time, any place. Technology vendors say they are ready to go: the technology already exists to develop an interface with our agency management systems, but carriers say they have not heard their agents say they want it. Beep, beep! I believe the carriers are misguided. They aren’t hearing from their agent partners about this, so they are focusing marketing investments elsewhere. We agents need to use our strength as communicators to tell the companies clearly and strongly that we need a Buy Button. As professional independent agents, we are great at talking to customers face-toface. We can enhance this strength with the ability to bind a policy on site—from anywhere—while we are sitting with a client, with the simple click of a button. And, it would allow us to take back our weekends, which should not be left as an opportunity for direct writers to take business away from us. PIA’s Buy Button could facilitate all of this. It’s up to us as agents to contact our carrier partners and tell them what we need through our marketing reps, at producer panels and at every opportunity we have. Use your communicative strength to sound an alarm: Tell them you want a Buy Button.[IA]
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2016
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Registration info: Contact PIA’s Education and Conference Department at (800) 424-4244. Or visit us online at pia.org.
Download PIA’s new conference app @ PIANJ/ PIANY Annual Conference at Apple Store or Google Play. Or enter on your mobile browser: https://crowd.cc/s/dGgY We update the app with useful information constantly.
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Cyber Security
(continued‌) By Anna Murray
Anna Murray is a technology consultant and the CEO of emedia, LLC. She is the author of the best-selling book in the Wiley CIO series, The Complete Software Project Manager: Mastering Technology from Planning to Launch and Beyond. Her email address is AMurray@tmg-emedia.com. Further information can be found at www.emediaweb.com
16 April 25, 2016 / INSURANCE ADVOCATE
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According to the U.S. Department of Homeland Security, ninety percent of cyber-attacks originate on the application layer. Therefore, we must do a better job at developing less vulnerable software.
uA few months ago, my software team received the following request from an insurance company executive: “Please create a form on my WordPress website so potential clients and others can upload scans of sensitive documents.” He thought it would be an improvement over the current process: Gmail. Our client had no idea about the danger of his request. When we spoke to him and cautioned him to stop using Gmail to transfer sensitive documents, he immediately took action. This vignette may be an extreme example. But it illustrates the essential tension between software development and cyber security. Software development is efficiency-driven, deadline-driven, needs-driven and feature-driven. Achieving a first-mover advantage is critical, and in certain industries it may trump all other concerns. Obviously these drivers are in direct conflict with cyber security considerations. Here is one key rule to follow: Include cyber security thinking from the planning stage of software development all the way through launch. Your cyber security team will be an invaluable ally here. If you don’t have one, consider outsourcing. To follow the rule, use these essential guidelines: Questionnaire for Developers Send a cyber-security questionnaire to your software development agency. It can be as simple as providing OWASP Top 10 Vulnerabilities list and requesting them to address each one, or explain why a certain item is not relevant to your project. Include an essay question. Ask potential firms to comment briefly on their cyber-security experience and practices. Depending on your business and risk considerations, you may need to expand this document to include hiring and firing practices, background checks, and controlling access to sensitive data. You may want to confirm your vendor has appropriate roles-segregation practices. Which means the systems administrator doesn’t have the database password, and the database administrator doesn’t have the system’s password. Simply verifying up front that your development team follows best practices helps ensure security through the lifecycle of your product’s development. Choice of Platform More enterprise-y development products tend (tend is the operative word) to be more secure. If your software is being built on SharePoint or the Adobe platform, security features in the
framework itself are more likely to be handled for you. Such is not the case in the open-source community. Hundreds of thousands of community-built modules exist for WordPress, Drupal, and RoR. The problem: Enterprise-grade systems can cost multiples over open-source. Further, open-source frameworks have been a godsend in terms of truly achieving feature-rich software and rapid application development. If you are using an open-source framework, make sure your development team is taking security into consideration. What plugins are they using? Have they been thoroughly vetted by the community and reviewed as secure? Further, smaller businesses must remember to update opensource platforms like WordPress for the latest patches. This step is simple and often forgotten. Forms, Passwords and Entry Points Any place where a user enters data into an application is a potential vulnerability. Hackers can use these input opportunities to tunnel in to deeper layers of the software. Or, they can access the accounts of your users through tricky combinations of social engineering and brute-force password cracking apps that are freely available. Take a look at your forms, logins, and password-recovery practices. Best-practice guidelines are readily available. For things you don’t catch, a security test will help. Data Collection and Storage Understand the sensitivity of the data you plan to collect. Is it personally identifiable information (PII) such as emails, phone numbers, and dates of birth? If so, you must plan to encrypt the data in transit (as it’s being transmitted from the web form to the database), and at rest (when it is simply stored in the database waiting for retrieval). Integration Points Integration powers most modern software development. An integration point is where your application exchanges data with another system, such as when you retrieve a user’s account inforCONTINUED ON PAGE 18
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mation from your CRM and use it to show a profile page on your website. For example, to execute an integration, you might create something called a webservice between the two systems, and each system has an “endpoint.” But how do you know if the authorized system (CRM) is the one accessing your endpoint? To ensure security, methods such as IP whitelisting and VPN to VPN mutually trusted connections can be employed. HTTPS An ISP (internet service provider) can look at web traffic passing through their network and tell what sites a user has visited. They can (and do) sell that information to advertisers. If the ISP is hacked, that information is available to the hacker. Putting your site on an HTTPS url gives your users an added layer of protection. The pages visited on the site are encrypted against snooping by anyone trying to intercept the traffic, and so is any data exchange between your application and your users.
third-party QA, they are even less likely to do security testing. Both are essential. A general QA effort will ensure the functioning and stability of your software. Added testing for security vulnerabilities will validate that all your planning efforts have paid off in a secure software product.
Remember, hackers are constantly probing for vulnerabilities and developing exploits. Don’t let your application become an easy target!
You probably plan to introduce new features on your application. This means testing must be incorporated as a maintenance task. There are automated tools such as BurpSuite to test basic code vulnerabilities. You may also want to include a by-hand test at least quarterly to ensure ongoing security. Remember, hackers are constantly probing for vulnerabilities and developing exploits. Don’t let your application become an easy target![IA]
Temporary Environments and Backdoors In most software development, programmers set up non-production environments. These dev spaces are not behind firewalls, may not have encryption “turned on,” or have whitelisting active. Further, your software vendor may have been given temporary access to a company’s database for the purposes of setting up an integration. It is a good idea to treat these environments with care and apply security best practice there as well. Hackers don’t really care if it is the production environment or the test environment that they got access to. Once in, they are likely capable of navigating to any environment they want. Finally, once your software is launched, all these temporary environments must be retired and private access revoked. In short, from a security standpoint, decommissioning a dev environment (hardware, software, credentials, data) is as critical as launching your production application. Testing General third-party QA testing itself is one of the most overlooked areas of software development. “Our internal team will test the software,” is still commonly heard at companies. Needless to say, if organizations are reluctant to do general
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YOU NEED IIABNY. 18 April 25, 2016 / INSURANCE ADVOCATE
The association who give you access to the brand of the independent insurance agent.
www.iiabny.org/join
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LICONY
ADVERTOR IAL
LICONY
Leaders Throughout Life Insurance Industry A MetLife Senior Leader’s Observations about Government, Social Responsibility and the Industry By Mary A. Griffin, President & CEO, Life Insurance Council of New York, Inc.
T
his year through my programs, but are concolumn, I will be disstrained by limited budgets. cussing key issues with It is this balance between some of our most senior what government can afford leaders, so that you can gain to do, and what life insura better sense of the people ance companies offer, that involved in New York’s life provides a holistic solution to insurance industry. the societal risks facing indiI posed the following viduals, families and busiquestions to Michael A. nesses. In other words, life Zarcone, who is Executive insurers play a critical role in Vice President, Corporate helping government officials Affairs for MetLife, and do their jobs. MICHAEL A. ZARCONE Chair of the MetLife FounThere will always be dation. In 2014, Mike was some disagreement between the Life Insurance Council of New York’s government officials and insurers in terms of Chairman of the Board, and remains one the most appropriate level of regulation. of our Directors today. Before joining However, such differences of opinion should MetLife, Mike served as Associate Counsel not obscure the fact that life insurance comto Minority Leader Clarence D. Rappleyea panies share similar goals with government in the New York State Assembly. In this po- officials: to provide consumers with the best sition, he was Counsel to the Assembly products and services to meet their needs. Committees on Insurance, Banks and Commerce. What do you think government officials would find most surprising about Mike, when you meet with govern- the life insurance industry? ment officials, what is the one thing that When I began my career in Albany you want them to walk away knowing working for the Legislature, I didn’t have a about the life insurance business? choice in assignments and I was asked to The key takeaway is for government offi- focus on insurance issues. As I began to learn cials to understand that life insurance com- about the industry, I was surprised to hear panies are as pro-consumer as they are. about all the programs and investments life Life insurers provide a safety net to indi- insurers undertake to protect the environviduals and families to address the risks they ment, support medical research and, through face throughout their lives. Our companies charitable giving, make a positive difference also offer essential products and services to for the people, families and communities we businesses across the country, both large and serve. This impressive array of activities small, to help them grow. Government enti- spoke to my own sense of social responsibility ties provide certain consumer risk protection and community service.
For example, at MetLife, we have invested $2.9 billion in renewable energy projects since 2003, and our MetLife Foundation has provided more than $670 million in grants since 1976. In 2013, the Foundation committed $200 million over five years to ensure that more people across the globe have access to the quality financial services they need to build better lives. Of course, MetLife is certainly not alone in taking its responsibility as a good corporate citizen to heart. There are numerous other examples of the life insurance industry in New York State making investments in infrastructure, people and communities, the breadth of which would certainly surprise some government officials. The bottom line is that the world is a better place because life insurers are in it. [IA] Mary A. Griffin is the President and Chief Executive Officer of the Life Insurance Council of New York, Inc. LICONY is the principal voice of the life insurance industry in New York. LICONY works to create and maintain a legislative, regulatory, and judicial environment that encourages its members to conduct and grow their life insurance businesses here in New York State. For stories about New Yorkers who have benefitted greatly from purchasing the products of life insurers, go to www.licony.org, click on “Published Articles” in the NEWSROOM box on the homepage.
O: (212) 986-6181 F: (212) 986-6549 551 Fifth Ave., 29th Floor, New York, NY 10176 website: www.licony.org INSURANCE ADVOCATE / April 25, 2016 19
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[ IN FOCUS ]
K E L LY D O N A H U E - P I R O
Summer Agency Marketing Strategies uThe slow, lazy days of summer are a great time to revisit your marketing strategy for your company. Over the wintertime, you have been going along doing the necessary things but you aren’t sure if it’s really working. These quieter days provide the best opportunity to revisit and start tracking what really matters. There are several ways to go about this but we believe strongly in obtaining a baseline metric and then measuring it every quarter. Here are some items to start tracking: • Website Visitors-Google Analytics • Website Unique Visitors-Google Analytics • Email Open Rates • Facebook Fans • Facebook Post Reach • LinkedIn Connections • YouTube Video Views • Retention • Sources of New Business If you start now, by the end of summer you will see the fruits of your labor! Now that you have your tracking all set, you need to coordinate your marketing plan. Summer is a great time to get local and have some fun doing it. The best agencies aren’t talking about insurance during the summer, they are using the time to show their brand. Social media is an opportunity to (1) show your more fun side and (2) talk about the things people love that you insure.
Here are a few recommendations on how you can show your fun side on social media. Write blogs on: • Favorite iced coffee flavors • Favorite ice cream flavors • Cookout favorites • Local events • Best places to see fireworks • Weekend trips • Workout tips • Gardening strategies • Ways to keep cool • Back-to-School tips In addition, we have a list of some ways
Social media is an opportunity to (1) show your more fun side and (2) talk about the things people love that you insure. to show your insurance side, too: • Classic car insurance • Motorcycle insurance • RV insurance • Protecting your new college kid’s dorm room assets • Insuring landscapers • EPLI insurance for seasonal businesses
Kelly Donahue-Piro, founder and president of Agency Performance Partners, is a no-nonsense effectiveness expert who has helped hundreds of insurance agencies identify and capitalize on sustainable improvement opportunities. Her specialties include agency culture assessment and change; management and supervisory coaching and benchmarking; customer retention strategy development; digital marketing strategy, planning and implementation; and sales planning, management and skillbuilding. In 2014, she created Agency Performance Partners with a mission to “partner with insurance entrepreneurs who dream to take their business to the next level and beyond, by relentlessly pursuing excellence in worldclass service and sales strategies.” The centerpiece of the organization’s transformational work is its Agency Performance AssessmentTM, a comprehensive survey tool Kelly created to zero in on organization-wide improvement opportunities and provide the foundation for a customized agency action plan. Mrs. Donahue-Piro is an engaging speaker who is available to conduct in-person and online agency success presentations that complement her firm’s one-on-one on-site and virtual consulting practice. Connect with her on social platforms, via email at kelly@agencyperformancepartners, or by phone at 401-415-6205.
• Any other seasonal businesses you can think of Your goal is to track and have fun this summer! Make sure your social media posts have images in them. You can use free and easy tools like Canva.com to help you! Once you start posting, see what is engaging your audience. In marketing it’s completely okay to test and refine. You will learn more by reviewing the metrics than you think. [IA] 20 April 25, 2016 / INSURANCE ADVOCATE
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[ IN THE ASSOCIATIONS ]
UJA to Casserley, Dangelo, PIA Calls and Hershman at General on Agents to Insurance Annual Dinner Participate in Performance Surveys
uNEW YORK, N.Y.—UJA-Federation of risks they face. He joined Willis followof New York will honor Dominic ing a 30-year career at McKinsey & Casserley, president of Willis Towers Company, a global management consulting Watson, Charles H. Dangelo, presfirm in the U.S., Asia, and ident and CEO of Starr Indemnity the U.K., where he was and Liability, and Richard managing partner of its Hershman, senior advisor at FTI Greater China and later its Consulting, Inc., at its General U.K. operations. Insurance Annual Dinner on As president and chief Tuesday, May 31, 2016, at Grand operating officer of Starr Hyatt New York in Manhattan. Insurance Holdings, Hershman will receive the Dangelo provides leaderLifetime Achievement Award. ship for Starr’s insurance Maurice R. Greenberg, chairman companies and subof Starr Companies, and Peter A. CHARLES H. DANGELO sidiaries. He also serves as Weinberg, partner at Perella president and CEO of Weinberg Partners, will serve as Starr Indemnity & Liability event chairs and present the Insurance Company and awards. Starr Surplus Lines UJA-Federation’s Wall Street & Insurance Company, and Financial Services division hosts as vice chairman of Starr’s the General Insurance dinner each Bermuda-based insurance year to recognize a professional in company, Starr Insurance the industry for demonstrating and Reinsurance Limited. leadership and philanthropy, both Prior to joining Starr, he at work and in the community. Past served as vice president honorees include Jay S. Fishman of and chief reinsurance offiThe Travelers Companies, Inc.; DOMINIC CASSERLEY cer for American Evan G. Greenberg of ACE International Group. Limited; William H Heyman of Hershman recently The Travelers Companies, Inc.; retired as leader of FTI Constantine “Dinos” Iordanou of Consulting’s Global Arch Capital Group Ltd.; Kevin H. Insurance Services and Kelley of Ironshore; Donald continues as a senior adviKramer of ILS Capital sor. He has 45 years of Management; Stephen P. McGill of experience within the Aon Risk Solutions; Pamela insurance industry and Newman of Aon plc; and Patrick has been a frequent indusRyan of Ryan Specialty Group. try speaker and author. Funds raised go to UJA-Federation’s Hershman was recently annual campaign to sustain its netrecognized as a top insurwork of nearly 100 nonprofits that RICHARD HERSHMAN ance industry expert by touches the lives of 4.5 million peoWho’s Who Legal: ple each year. Insurance & Reinsurance. Prior to joining Under Casserley’s leadership, the Willis FTI, he provided insurance industry adviGroup focused on growing its global plat- sory services through a consulting firm he form and enhancing its offerings to com- co-founded, and also served as CFO of panies to help them better quantify and DSFX, a leading international intelligenceproactively manage the ever-changing set consulting firm. [IA] 22 April 25, 2016 / INSURANCE ADVOCATE
Anonymous survey gives voice to agents who rate their companies on performance items uGLENMONT, N.Y.—The Professional Insurance Agents of Connecticut, New Hampshire, New Jersey and New York State launched their Company Performance Surveys today. Each survey, available through June 24, 2016, gauges insurance producers’ views of the companies they represent in their respective states. Independent agents can rate the companies with which they do business on 20 performance items, including: claims handling, products and pricing, underwriting, technology and marketing support to gauge their relationship with the carriers. The surveys also ask several questions on how each carrier fits into the agency’s operations. The survey, which has been conducted for more than a decade in each of the states, is a popular tool for both companies and agents to gauge their relationship and the companies’ performance. “The survey will be available online until Friday, June 24, 2016,” said Gene Sandy, CIC, president of PIANY. “We encourage all agents to let their voices be heard and don’t forget to comment on companies’ strengths and areas for improvement.” “The focal point of the Company Performance Survey continues to be to foster relationships between professional, independent insurance agents and their companies,” said Charles J. Caruso, CIC, CPIA, president of PIANJ. “It stands to reason, when the relationships between agents and their companies are strong, everyone benefits; most importantly, our mutual clients.” “We urge all professional, independent
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[ IN THE ASSOCIATIONS ] insurance agents to take part in the survey, it’s not just open to PIA members,” said Loretta Lesko, CIC, president of PIACT. “Companies have told us they incorporate the data from this survey into their business plans, so we encourage you to be candid with your responses in this anonymous survey.”
“The focal point of the Company Performance Survey continues to be to foster relationships between professional, independent insurance agents and their companies” - Charles J. Caruso, CIC, CPIA, President of PIANJ
Launched in 2002 by PIACT, the biennial Company Performance Surveys have built on years of historical data collected by each respective association. PIA members can view this data on the PIA website at pia.org/GIA/cps/cpsjump.php. “This is the most comprehensive agent-company relations survey available in the four states,” said John Obrey, president of PIANH. “PIA has compiled data from the Company Performance Survey since it began collecting it.” Upon request, PIA-member companies may receive information comparing their results to survey averages as well as including specific, anonymous comments from agents on their services, among other information. Also upon request, agents will be given reports about their companies. To access each state association’s Company Performance Survey log on to: www.pia.org/CT for Connecticut; www.pia.org/NH for New Hampshire; www.pia.org/NJ for New Jersey; and www.pia.org/NY for New York state and click “Take the Company Performance Survey here” under “Read this NOW.” PIACT, PIANH, PIANJ and PIANY are trade associations representing professional, independent insurance agencies, brokerages and their employees throughout their respective states.[IA]
Bill Wilson Honored with Jeff Yates Award uWASHINGTON, D.C. – The Independent Insurance Agents & Brokers (IIABA or the Big “I”) has awarded Bill Wilson, CPCU, ARM, AIM, AAM, with the Jeff Yates Lifetime Achievement Award, the highest honor the association bestows on a non-agent, for a lifetime of work in the independent agency system. Wilson is Big “I” associate vice president of education and research and Virtual University director. He works via remote for the association from his home office in Gallatin, Tennessee. “The Big ‘I’ is proud to present Bill Wilson with the Jeff Yates Lifetime Achievement Award for his remarkable career dedicated to the independent insurance agent community,” said Randy Lanoix, Big “I” chairman and president of Lanoix Insurance Agency in Lutcher and Brusly, Louisiana. “Bill is one of the premiere insurance educators in the country and has helped thousands of agents nationwide– from Hawaii to Rhode Island–on a variety of issues including insurance coverage technical matters, agency management concerns and more through the VU’s ‘Ask an Expert’ service and has given hundreds of seminars, workshops and convention presentations.” Wilson joined the Big “I” team in 1999. He previously served as director of education and technical affairs for the Insurors of Tennessee and was a licensed insurance and surplus lines agent. Wilson’s professional affiliations include having served as president of the Middle Tennessee Chapter of CPCU, board member of the national CPCU Society, PMLG of the Honorable Order of Blue Goose, Intl., member of the Big “I” National Education Committee, member of the Certified Insurance Service Representative (CISR) National Advisory Committee, member of the Society of Insurance Trainers and Educators (SITE) and its SITE Journal editorial committee, member of the National Writers Association, chairman of the Tennessee Insurance Commissioner’s Education Advisory Committee, member of the Middle Tennessee State University Insurance Liaison Committee, member of the Nashville State Technical Institute’s
Financial Services Advisory Committee, member of the National Underwriter’s FC&S Editorial Advisory Board, and an
“Bill is one of the premiere insurance educators in the country…” instructor for insurance and risk management programs for Tennessee State University and Nashville State Technical Institute. Wilson is a recipient of the CPCU Society’s George M. Gottheimer Memorial Award which is presented periodically to a CPCU Society member who has made an outstanding contribution to the field of insurance education, risk management or insurance consulting. “Bill has been quoted in hundreds of news stories and his writings have been published in dozens of trade and business publications,” continued Lanoix. “Many in our industry and the media view him as the ultimate insurance guru and we are tremendously lucky to have him on our team.” Wilson earned a bachelor’s degree in fire protection and safety engineering at the Illinois Institute of Technology. He’s also an accomplished guitar player and regular on the Nashville area music circuit. He and his wife, Gail, have an adult son. The Jeff Yates Lifetime Achievement Award was established in 2013 in honor of Jeff Yates, a 39-year veteran of the Big “I” who served in numerous capacities within the association from 1975 to 2014. Yates served in the general counsel’s office from 1975 to 1982 (as executive vice president and general counsel for most of that period). In 1989, he spearheaded the association’s move from New York to its current headquarters in Alexandria, Virginia. In 1998 he was promoted to CEO and first retired in 2000. In 2001 he returned to the Big “I” to lead the ACT program as executive director and retired in 2014. Lanoix presented the award during the annual Big “I” Legislative Conference in Washington, D.C.[IA] INSURANCE ADVOCATE / April 25, 2016 23
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[ IN THE ASSOCIATIONS ]
IIS Forms Insurance Development Forum uNEW YORK, NY − IIS has announced the formation of the Insurance Development Forum (IDF), a collaboration between the United Nations, the World Bank Group and the insurance industry. The IDF aims to incorporate insurance industry risk measurement expertise into existing governmental disaster risk reduction and resilience frameworks and to build out a more sustainable and resilient global insurance market in a world facing growing natural disaster and climate risk. Led by a steering group of senior leaders from the insurance industry and governmental institutions, the IDF will be supported by an Executive Secretariat, housed at the International Insurance Society (IIS). The IDF will be chaired by ChairmanElect of the IIS Stephen Catlin, Non-executive Deputy Chairman of XL Catlin and Chairman of the Association of Bermuda Insurers and Reinsurers; with co-chairs Joaquim Levy, Managing Director and World Bank Group Chief Financial Officer and former Minister of Finance of Brazil; and Helen Clark, Administrator of the United Nations Development Program (UNDP), and former Prime Minister of New Zealand. The announcement followed a keynote address by UN Secretary General Ban KiMoon at a planning conference earlier in April with many CEOs of the industry, which emphasized the critical role that the insurance industry can play in building natural disaster resilience and helping meet the UN’s Sustainable Development Goals. The IDF mission is to better understand and utilize risk measurement tools that will help governments apply that knowledge at multiple levels in order to better deploy governmental resources targeting resilience to protect people and their property. The IDF acts as a Forum to enable the optimal coordination of insurance-related activities and to the development of strategic and operational relationships within and between governments, industry and international institutions with the aim of closing the growing Protection Gap. 24 April 25, 2016 / INSURANCE ADVOCATE
During its inaugural meeting, the IDF established four priority work streams: 1. Understanding Risk: the IDF will support a better understanding of hazards and the exposure and vulnerability of peo-
“The formation of the IDF is an important milestone in the evolution of the IIS, supporting the IIS mission to serve as a diverse and impartial global platform for the insurance industry to collaborate across borders and industry sectors, and to form alliances with governments and NGOs in order to mitigate the Protection Gap and build resiliency and sustainability.”
ple and assets to those hazards. By quantifying the risks and anticipating the potential impacts of hazards, governments, communities and individuals can make informed decisions on resilience, insurance, investment and wider policies and interventions. 2. Risk and Insurance Regulation, Legislation and Policy: the IDF will promote supportive and inclusive insurance regulation to increase access to insurance by the most vulnerable, and integration of quantitative and standardized climate and natural hazard risk disclosure into mainstream financial and accounting systems, and the appropriate adoption of resilience policies to protect lives, livelihoods and assets.
3. Risk Sharing, Transfer and Response: the IDF will fully support the delivery of the G7 InsuResilience Climate Risk Insurance Target and facilitate availability of climate and natural hazard risk sharing facilities in most regions. The IDF will identify and address challenges to wider insurance coverage (including sovereign, micro-insurance and conventional insurance facilities) and encourage insurance development metrics within updated official statistics and post-2015 indicators. 4. Risk and Resilience: the IDF will help build the capacity of developing and emerging countries to manage and implement sustainable financing and resilient investment from insurance and related sectors. It will support the creation of a Global Adaptation and Resilience Fund to invest in resilience related technologies, innovation and facilities. Michael J. Morrissey, IIS President and CEO, commented: “The formation of the IDF is an important milestone in the evolution of the IIS, supporting the IIS mission to serve as a diverse and impartial global platform for the insurance industry to collaborate across borders and industry sectors, and to form alliances with governments and NGOs in order to mitigate the Protection Gap and build resiliency and sustainability.” During the meeting the leadership announced the formation of seven working groups targeted to specific project goals. The working groups will report to the High Level Steering Group in September in the margins of the UN General Assembly. With regard to the launch, the Chair and Co-Chairs provided these comments: Insurance Industry Chair Catlin: “My grandchildren expect me to make responsible decisions that affect their future. Insurers’ risk management skills help us assess natural disaster risk and can be exported to allow governments at all levels to reduce future losses by designing resilience into infrastructure projects; and in increasing the use of insurance as a predisaster economic resource to allow people to protect their families, property and assets. Risk identification, measurement, pooling and diversification are essential features of any successful insurance program and regulation must recognize their value and purpose. These skills can increase the utilization of insurance which CONTINUED ON PAGE 27
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[ GUEST OPINION ]
J A N E M . O R I E N T, M . D .
Zika: Crisis or Sentinel Event? uAccording to the World Health Organization (WHO), Zika is, like Ebola, a Public Health Emergency of International Concern. Now the U.S. Centers for Disease Control and Prevention (CDC) has stated that it is “clear” that the Zika virus causes a serious birth defect, microcephaly (small head). CDC publishes a scary interactive map of cases diagnosed in the U.S. The highest number (78 yesterday, 82 today) is at the moment in Florida, colored an ominous brown. CDC is in high gear, with politically correct advice on Zika. Meanwhile, cases of dengue in Mexico have topped 10,000. Dengue is caused by a related but far more serious virus, carried by the same Aedes aegypti mosquito. And 78,000 people in Africa die every year of another relative, yellow fever. The vector was coming under good control decades ago, but is re-emerging now. Asking “why” should be the main response to Zika. Instead the advice seems to be: “Don’t travel, don’t have a baby, don’t let a mosquito bite you, stop climate change”—and give the authorities billions of dollars for a crash vaccine development program. What should people do about Zika? First, don’t panic. It’s not Ebola. Ebola and Zika are alike in that they were first recognized in Africa decades ago. Also, there is no cure or vaccine for either. But while Ebola has killed thousands, Zika has likely not killed anyone. Symptoms, if any, are mild: a few days of fever, rash, joint pains, and red eyes. Ebola is extremely contagious through personal contact. Zika is primarily transmitted by mosquito, although it may be carried in semen. The main problem with Zika is that, like rubella (German measles), it can apparently cause birth defects. (Rubella can cause microcephaly.) Zika virus has been found in the brain of a few babies born with microcephaly. But two things are very clear: MOST microcephaly is NOT caused by Zika. About seven in 10,000 babies born in the U.S. have microcephaly—no thanks to Zika. Most (more than 90%) of the
Brazilian babies recently confirmed to have microcephaly tested negative for Zika. Additionally, MOST mothers who have Zika during pregnancy give birth to a normal, healthy baby. Mothers in northeastern Brazil also had a lot of other problems, including malnutrition, heavy exposure to toxic agricultural chemicals, and an aggressive vaccination campaign. Panic can cause people to do things that might make the problem worse. For example, New York State’s Zika prevention kits contain the mosquito repellent DEET, which is absorbed through the skin. It is not known to be safe in pregnancy. Some animal studies have shown nerve toxicity. And what about vaccines? A March 22/29 JAMA article is entitled: “Pregnancy in the Time of Zika: Addressing Barriers for Developing Vaccines and Other Measures for Pregnant Women.” One barrier is “lack of a broadly accepted ethical framework” for clinical research during pregnancy. Basically, to test whether something harms a developing baby, you have to try it out on developing babies and see whether they are hurt. A registered clinical trial that sought 50 pregnant volunteers to test Tdap (adult tetanus, diphtheria, acellular pertussis) vaccine—in Vietnam—was scheduled for completion in 2015. But Tdap had already been given to thousands of Brazilian expectant mothers some months before reports of microcephaly started to surface. There was no control group of unvaccinated women. It was not, after all, research, but a public health response to an increase in pertussis (whooping cough) cases. A Zika vaccine would likely be a live virus, and all live virus vaccines are contraindicated in pregnancy—and possibly while nursing. That includes measles, mumps, rubella, chickenpox, shingles, and rotavirus. There is a case report of a nursing infant who got meningoencephalitis, probably from yellow fever vaccine virus. Nursing Labrador puppies got canine distemper, a relative of measles, after their mother got a booster shot. WHO and CDC are quick to indict Zika virus, which might eventually turn
Jane M. Orient, M.D. obtained her undergraduate degrees in chemistry and mathematics from the University of Arizona in Tucson, and her M.D. from Columbia University College of Physicians and Surgeons in 1974. She completed an internal medicine residency at Parkland Memorial Hospital and University of Arizona Affiliated Hospitals and then became an Instructor at the University of Arizona College of Medicine and a staff physician at the Tucson Veterans Administration Hospital. She has been in solo private practice since 1981 and has served as Executive Director of the Association of American Physicians and Surgeons (AAPS) since 1989. She is currently president of Doctors for Disaster Preparedness. Since 1988, she has been chairman of the Public Health Committee of the Pima County (Arizona) Medical Society. She is the author of YOUR Doctor Is Not In: Healthy Skepticism about National Healthcare, and the second through fourth editions of Sapira’s Art and Science of Bedside Diagnosis, published by Lippincott, Williams & Wilkins. She is the editor of AAPS News, the Doctors for Disaster Preparedness Newsletter, and Civil Defense Perspectives, and is the managing editor of the Journal of American Physicians and Surgeons.
out to be an innocent bystander. But the chief culprit is known: a breakdown in vector control. In 1970, the safest and most effective public health weapon in history—DDT— was banned by the U.S. Environmental Protection Agency. In the 1990s, Mexico agreed to abandon its DDT program as a condition of NAFTA. Mosquitoes travel. Alarm about Zika will be a public relations exercise, covering the waste of millions of human lives and billions of dollars on ineffective or harmful campaigns, if it does not open a discussion of why diseases on their way out in the 1970s are coming back now.[IA] INSURANCE ADVOCATE / April 25, 2016 25
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[ ON MY RADAR ]
BA R RY Z A L M A
Damage, Not Negligent Acts, is Occurrence An Insured Can Only Kill a Child Once uWhen a person is injured or killed as the result of the negligence of another, an insurer is obligated to defend and indemnify its insured up to the limits of liability of the insurance policy. Almost every liability insurance policy contains a per-occurrence limit of liability and an aggregate limit if more than one person is injured by the same occurrence. In Davis v. Kentucky Farm Bureau Mutual Insurance Company, Court of Appeals of Kentucky — S.W.3d — 2016 WL 929362 (3/11/2016), the Kentucky Court of Appeals was asked to apply an aggregate limit to a single death because multiple acts of negligence brought about the death.
FACTS On October 17, 2011, two-year-old Ja’Corey Davis died from asphyxiation after swallowing and choking on a push-pin while in the care and protection of Trina’s. After Ja’Corey’s death, the Cabinet for Health and Family Services investigated Trina’s and discovered multiple violations of Kentucky Administrative Regulations: (1) push-pins within the reach of young children; (2) inadequate staff-to-child ratios; and (3) negligent supervision. The Cabinet issued an emergency order suspending the license and operation of Trina’s. Davis and Woods, Ja’Corey’s parents and as co-administrators of Ja’Corey’s estate, filed an action against Trina’s in the Jefferson Circuit Court. In a second amended complaint, Davis and Woods alleged direct negligence claims against Trina’s and vicarious liability claims against Trina’s for the acts or omissions of its employees, including the multiple violations cited by the Cabinet. At the time Ja’Corey choked on the push-pin, Trina’s was insured by a commercial general liability policy issued by Kentucky Farm Bureau covering Trina’s and its employees. The Kentucky Farm Bureau policy limits coverage by the number of occurrences from which the claims 26 April 25, 2016 / INSURANCE ADVOCATE
arose, stating that each occurrence is limited to $500,000 and provides for an aggregate maximum of $1,000,000. The policy further provides that each occurrence limit is the maximum Farm Bureau will pay “because of all ‘bodily injury’ and ‘property damages’ arising out of any one ‘occurrence.’” Occurrence is defined in the policy as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.” Kentucky Farm Bureau and Davis and Woods resolved the claims against Trina’s, its officers and employees subject to an agreement that the dispute concerning the number of occurrences remained unsettled. Subsequently, Kentucky Farm Bureau filed this declaratory judgment action to resolve the dispute. The trial court ruled that the alleged negligent acts “combined to form a single occurrence, which resulted in the death of [Ja’Corey].”
DISCUSSION Kentucky appellate courts interpret an insurance contract as a matter of law and review the case as if it was sitting as a trial court. In doing so, the appellate court applies certain rules of construction, including that when the terms of an insurance contract are unambiguous and not unreasonable, the terms will be enforced as written. Although ambiguous terms are to be construed in favor of the insured, there is no requirement that every doubt be resolved against the insurer. Moreover, there must be an actual ambiguity. The mere fact that a party attempts to muddy the water and create some question of interpretation does not necessarily create an ambiguity. The trial court concluded the claims arose from a single cause and a single occurrence and granted summary judgment in favor of the insurer. Davis and Woods appealed, contending that the trial court erred because it was required to
Barry Zalma, Esq., CFE, has practiced law in California for more than 42 years as an insurance coverage and claims handling lawyer. He now limits his practice to service as an insurance consultant and expert witness specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He founded Zalma Insurance Consultants in 2001 and serves as its only consultant. Look to National Underwriter Company for the new Zalma Insurance Claims Library, at www.nationalunderwriter.com/ZalmaLibrary. The new books are Insurance Law, Mold Claims Coverage Guide, Construction Defects Coverage Guide and Insurance Claims: A Comprehensive Guide. The American Bar Association, Tort & Insurance Practice Section has published Mr. Zalma’s book “The Insurance Fraud Deskbook” available at http:// shop.americanbar.org/eBus/Store/Pro ductDetails.aspx?productId=214624, or 800-285-2221 which is presently available. Legal Disclaimer: The author and publisher disclaim any liability, loss, or risk incurred as a consequence, directly or indirectly, of the use and application of any of the contents of this blog. The information provided is not a substitute for the advice of a competent insurance, legal, or other professional. The Information provided at this site should not be relied on as legal advice. Legal advice cannot be given without full consideration of all relevant information relating to an individual situation.
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[ ON MY RADAR ] determine the amount of insurance coverage available by the number of causative acts that contributed to Ja’Corey’s death. Every accident is an occurrence. But not every occurrence is, strictly speaking, an accident. In the context of an insurance policy, “occurrence” is construed as synonymous with an accident or kindred act — an unforeseen occurrence resulting in bodily injury to a person other than the one indemnified which may give rise to a claim against the insured. For purposes of triggering insurance coverage, the prevailing rule is that the time of the occurrence of an accident is when the complaining party was actually damaged or injured and not the time when the wrongful act was committed. This approach is based on the fundamental notion that the tort of negligence is not deemed to have been committed unless and until some damage is done. The same approach is not necessarily taken when the question is whether there were multiple occurrences for purposes of the policy limitations. Although in most instances it is clear whether there are one or multiple occurrences, the question of what constitutes a single “occurrence” or “accident” within the meaning of a policy limits clause in a liability insurance policy generally arises under the prevailing cause approach, the number of occurrences is determined by whether there is but one proximate, uninterrupted and continuing cause which resulted in all of the injuries and damages. The maximum limit of liability of the insurer for any one occurrence was $50,000.00. The policy provided that all bodily injury arising out of continuous exposure to substantially the same general conditions shall be considered as arising out of one occurrence. Davis and Woods present an innovative argument that even where only a single injury results, under the cause approach the amount of coverage available depends upon the number of negligent acts that caused the injury. While a novel argument in Kentucky, it is arguably supported by only a handful of cases from other jurisdictions. Following the reasoning in Nationwide Mut. Fire Ins. Co. v. Kubacko, 124 Ohio App.3d 282, 706 N.E.2d 17 (1997), the Court considered the definition of occurrence in a case involving burns suffered by a child while in the care of an insured. After the child was burned, the child was placed in a bath-
tub containing hot water and the insured did not seek treatment for the child until several hours later. The Ohio Court of Appeal concluded that despite the number of negligent acts, the child’s injuries arose from a single occurrence. Finally, the Court of Appeal was also in agreement with the succinct summation given in Koikos v. Travelers Ins. Co., 849 So.2d 263, 271 (Fla. 2003): “The insured’s alleged negligence is not the ‘occurrence’; the insured’s alleged negligence is the basis upon which the insured is being sued by the injured party. Focusing on the immediate cause – that is the act that causes the damage – rather than the underlying tort – that is the insured’s negligence – is also consistent with the interpretation of other forms of insurance policies.” Davis and Woods allege various acts of negligence and theories of liability against Trina’s and its employees. As noted by Davis and Woods, they may pursue causes of action against Trina’s for its own negligence and for respondeat superior liability due to the negligent acts or omissions of its employees. They may also pursue claims against the employees individually for their negligence. Moreover, if there had been more than one insurance policy, Davis and Woods would have claims under those policies even though only one accident occurred. However, merely because there were multiple negligent acts that combined to cause a single injury or multiple causes of action may be asserted, does not mean there were multiple occurrences as that term is unambiguously defined in the Kentucky Farm Bureau policy. There are frequently multiple acts of negligence that cause a single injury. Under the unambiguous language of the policy, the meaning of “occurrence” in the Kentucky Farm Bureau policy is “accident.” There was only one accident, Ja’Corey’s choking on a push-pin. The $500,000 limit applies.
ZALMA OPINION Insurance is not a benefit provided to those wrongfully injured. It is a contract that must be enforced in accordance with its terms and conditions. Although the loss of a child is tragic and the parents should recover as much as they can from those responsible, the tragedy cannot change the meaning of the contract of insurance nor change the amount of coverage purchased.[IA]
IN THE ASSOCIATIONS CONTINUED FROM PAGE 24
will reduce the reliance on post-disaster aid and better target resources to the most important and needed humanitarian crises. Research has shown that a one percent increase in insurance penetration can reduce the disaster recovery burden on taxpayers by 22 percent. The IDF brings together the resources of the broader insurance industry reflected in the membership of the International Insurance Society, the Geneva Association, the International Cooperative and Mutual Insurance Federation, and the Association of Bermuda Insurers and Reinsurers.” World Bank Group MD and CFO Levy noted in oral remarks: We have seen growing demand from our client countries for solutions to manage the costs from disasters effectively, and this is best done by specifically addressing the different layers of risk. However, the insurance market is close to non-existent in many countries. Consequently, the formation of the IDF is a pivotal moment, with all the actors in the insurance industry coming together and strengthening partnerships. It can play an important role in people’s lives, whether it is with micro insurance for natural disaster risk, protection against pandemics or protection of assets. We at the World Bank Group are focused on eradicating extreme poverty and boosting shared prosperity. With only about 17% of people in low- and middle-income countries with financial savings and insurance, compared to 45% in high-income countries, it is the most vulnerable in our society who will benefit most from being insured. UNDP Assistant Administrator Michael O’Neill (on behalf of Co-Chair Helen Clark, Administrator UNDP) highlighted the importance of public and private partners coming together, saying that “It [had] been a long time coming and the insurance industry and the international community need each other. For the good of our planet, and especially for those countries and communities vulnerable to disasters. We at UNDP believe that the IDF has the potential to put vulnerable economies and societies on a path to a green, risk-informed, and sustainable future. And in the process to change the way we, in development agencies, and our partners in the private sector do business together.”[IA] INSURANCE ADVOCATE / April 25, 2016 27
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[ COURTSIDE ]
L AW R E N C E R O G A K
No Witness, No Evidence, Nothing but a Theory Held Sufficient to Sustain Jury Award in Pedestrian Fatality Oates v New York City Transit Authority A pedestrian was found crushed to death near a bus stop. Nobody saw or heard anything: not the bus driver, not the passengers, not anyone on the street. But the pedestrian’s estate sued the Transit Authority, claiming that the bus ran over her. A Bronx jury found the Transit Authority liable. The Appellate Division affirmed (with two dissents), holding that the theory of plaintiff ’s expert who looked at the scene six years after the accident and examined buses of a different model than the one involved in the accident were enough for a jury to find liability. The dissenting judges explain that there was no evidence to support a theory that the bus driver was negligent, nor even to explain how plaintiff was struck by the bus. – LNR uJudgment, Supreme Court, Bronx County (Norma Ruiz, J.), entered September 9, 2013, upon a jury verdict, awarding plaintiffs $300,000 for decedent Rachel Levy’s conscious pain and suffering; $150,000 for plaintiff Hadassah Levy’s past loss of custodial services, and $400,000 for her future loss of custodial services (over a ten-year period); and $100,000 for plaintiff Miriam Levy Oates’s future loss of nurture, care and guidance (over a five-year period), affirmed, without costs. Decedent, mother of Miriam and daughter of Hadassah, was found dead under one of defendant Transit Authority’s buses. While the bus driver had no explanation for how her body came to be there, plaintiffs’ evidence, including DNA evidence matching samples recovered from the bus, was sufficient to support the jury’s finding that the bus driver was negligent in operating the bus. The evidence showed facts and conditions from which negligence and causation could “be reasonably inferred.” In particular, plaintiffs showed that decedent’s body had been crushed by 28 April 25, 2016 / INSURANCE ADVOCATE
the bus at such an angle that the bus driver, pulling out of the bus stop, should have, with the proper use of his senses, seen decedent.
How decedent came to be run over is established by neither testimony nor physical evidence, and the conclusions advanced by plaintiffs’ expert witness attributing negligence to defendant’s driver have no foundation in the facts adduced at trial. Plaintiffs’ uncontroverted expert testimony that decedent was conscious and in pain for two to five seconds after being hit by the bus supports the jury’s finding that decedent sustained conscious pain and suffering prior to her death. There was sufficient evidence of decedent’s nurture, care and guidance to her daughter to justify the award to the latter. Further, the Transit Authority waived its argument that decedent’s mother could not recover damages for decedent’s wrongful death, since it failed to raise the argument at any time before this appeal. The amounts awarded are not excessive. Plaintiffs’ counsel’s remarks during trial did not deprive the Transit Authority of a fair trial, especially since the court gave curative instructions after many of the challenged comments. All concur except Tom, J.P. and Andrias, J. who dissent in a memorandum by Tom, J.P. as follows:
Lawrence N. ("Larry") Rogak has been practicing insurance law since 1981. He has defended over 23,000 lawsuits and arbitrations and has represented over 75 different insurance companies and self-insured corporations. Lawrence N. Rogak LLC is listed in Best's Recommended Insurance Attorneys, a distinction that requires written recommendations from at least 12 insurance carriers. A 1981 graduate of Brooklyn Law School, Mr. Rogak has published more books and articles on insurance law than any other New York attorney in the field.
TOM, J.P. (dissenting) Plaintiffs’ decedent’s body was found lying face down on the southbound service road of the Henry Hudson Parkway in the Bronx, approximately five feet from the curb near the front of a bus stop. After an investigation, it was established, by DNA evidence, that the decedent was run over by bus 8865 operated by defendant New York City Transit Authority. The bus driver, Vincent Brady, and the passengers in the bus at the time of the occurrence did not see, feel or hear the bus come into contact with decedent. How decedent came to be run over is established by neither testimony nor physical evidence, and the conclusions advanced by plaintiffs’ expert witness attributing negligence to defendant’s driver have no foundation in the facts adduced at trial. The ensuing verdict awarding plaintiffs damages for wrongful death is thus predicated on no more than speculation, and cannot stand. A call log from the New York City Fire Department shows that a report of “pedestrian struck” was received at 2:39 p.m. and that emergency medical technicians had arrived at the scene by 2:43 p.m. Police Officer Spiros Komis, an on-scene technician with the Highway Patrol Unit, testified that there was a fresh tire mark on the road surface leading directly to decedent’s body, which was consistent with a tire mark on
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[ COURTSIDE ] her back. His accident report indicates that the victim was pronounced dead at 2:42 p.m., and lists the weather conditions as clear and dry. Measurements he made indicate that decedent’s feet were positioned on the service road approximately 125 feet south of the intersection with 236th Street, and that the bus stop was located 134 feet, six inches south of the intersection. Komis testified that all of the photographs of decedent showed her feet and head pointing at a southeast angle on the roadway. A police sketch shows her head positioned five feet from the curb and her right foot about half that distance into the roadway, which is approximately 20 feet in width. An investigator’s scene report states that decedent was found “lying approx. 4 feet from sidewalk curb clutching tote bag and a bag full of groceries.” The death certificate lists the immediate cause as “Blunt Impact Injuries of Head and Torso.” Police Officer Michael O’Connor of the Highway Patrol Collision Investigation Squad testified that he and a Detective Ryan, now retired, went to the Kingsbridge Bus Depot to look for evidence that a bus had struck a pedestrian. Upon inspecting the undercarriage of bus 8865, he found what appeared to be “blood and body tissue just behind the right rear wheel of the bus.” Swabs were taken from various locations. However, a forensic anthropologist with the Office of the Chief Medical Examiner testified that DNA analysis confirmed the presence of decedent’s blood only on a swab taken from the right front tire of the vehicle. A “supplemental case information” report filed by Robert Yee, whose position is given as “medicolegal investigator II,” states that the tire marks observed on the roadway measuring 11 inches in width correspond to the tire mark on the back of decedent’s jacket. The report also notes the presence of “leaves against the sidewalk curb,” and states that a sergeant from the 50th Precinct “at the scene offers that the decedent was a home health aide and had just finished her shift with a client that resided nearby the bus stop.” Neither the sergeant nor the source of his information is identified. Decedent’s daughter, plaintiff Miriam Levy Oates, testified that her mother, who was 51 years old at the time of her death, worked every Sunday as a home attendant for an elderly woman who lived at the Briarcliff apartment building located
behind, that is, to the west, of the bus stop. However, decedent had recently found a new job, and the date of the accident, October 29, 2006, was her last day of work at that residence.
Because the family objected on religious grounds, neither a toxicology study nor an autopsy was performed. Accordingly, the heart was not examined and “the brain was not examined for stroke or hemorrhage.” However, blood and hair were submitted to the Medical Examiner’s forensic biology laboratory for analysis.
Decedent’s mother, plaintiff Hadassah Levy, testified that decedent had lived in her home virtually her entire life and was in very good health. Decedent always took the BX10 bus after finishing her work at the Briarcliff, where she customarily arrived at 9:00 a.m. and left sometime around 2:00 p.m. The bus driver, Vincent Brady, had been driving the BX10 route for about four years before the accident. He recalled picking up only one person at the 236th Street and Henry Hudson Parkway bus stop but admitted it may have been as many as three passengers. He did not see anyone in the vicinity of the bus when he pulled away from the curb. He heard nothing and did not feel any impact. He stated that there were two blind spots: one on the right side of the bus extending 10 feet back from the front passenger door that was not visible in the passenger-side mirror, and another extending toward the front where a passenger-side route sign blocked forward vision. None of his passengers mentioned seeing, hearing or feeling anything as he drove away from the bus stop. Dr. Monica Smiddy, a forensic pathologist with the Office of the Chief Medical Examiner, testified regarding the results of an external examination of decedent’s body. The accident victim was well nourished, approximately 62 inches in height, and 124 pounds. There were very severe
injuries to the pelvic region, chest and head, including pelvic fractures, multiple rib fractures, multiple fractures of the skull and facial bones, and multiple lacerations of the scalp. There were no leg fractures or fractures of the feet. Finally, there was “a small abrasion of the skin surface overlying the left knee.” Because the family objected on religious grounds, neither a toxicology study nor an autopsy was performed. Accordingly, the heart was not examined and “the brain was not examined for stroke or hemorrhage.” However, blood and hair were submitted to the Medical Examiner’s forensic biology laboratory for analysis. Donald Phillips, an accident reconstructionist with a bachelor’s degree in mechanical engineering, presented plaintiffs’ theory of recovery to the jury. He noted the proximity of the bus stop to the Briarcliff apartment building, which was situated “directly behind it,” and a light pole “where the accident took place.” Decedent’s body was found “just slightly north of that light pole,” which held the bus stop signs at the time of the incident. From police photographs, he noted that the body was positioned face down with the feet oriented to the northwest and the head facing southeast. Phillips, who did not visit the accident scene until more than six years after the occurrence, conceded that he did not know which direction decedent was coming from to the bus stop, where the bus stopped or started, the dimension of the bus or tires, or the path or rate of speed the bus was traveling. Yet, based primarily on photos of the position in which decedent’s body was found and his observation of three buses, not even the same type of RTS bus that was involved in this accident, coming and going at the subject bus stop more than six years after the accident, Phillips testified that he envisioned a “projection type impact,” with the right front corner of the bus, as it was pulling away from the curb, pinning or “trapping” decedent to the light post and then propelling her five feet forward out into the roadway and the path of the right front wheel of the bus. From separate paths that he plotted for the front and rear tires as the bus pulled away from the curb, he posited that “the right outside rear tire could have been the one that went over her head.” He offered CONTINUED ON PAGE 32
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no explanation for why decedent’s blood was only found on the right front tire. Phillips then, without any evidentiary basis, stated his opinion as to where decedent was positioned just before the accident, stating, “[B]ased on my review of the file materials and my understanding of the sequence of the accident, Ms. Levy would have been leaving her place of employment.” To recite facts to fit his position on how the accident occurred, he concluded “she would have been generally moving north” as she approached the bus stop. And that “she actually got caught between the pole in [sic] the front of the bus and that’s why she couldn’t escape in front of the bus because she would have been backed up to the pole.” He measured the distance from the base of the pole to the curb at 15 inches. He assigned no role to the blind spot in the vicinity of the front passenger door stating that for the right front tire to strike her, “she had to be in front of the bus,” and there was no sign that she was dragged out into the roadway. On cross-examination, Phillips conceded that the investigation had uncovered
J U S T
no evidence of any contact between decedent and the front or sides of the bus. He stated that he learned that decedent worked at the Briarcliff “from discussions
sibility that decedent could have been running alongside the bus to try and catch it “because then she would be to the side of the bus not in front of it to get the two different tire paths.” Following his testimony, which concluded plaintiffs’ case, defendant moved for dismissal on the ground that plaintiffs had failed to make out a prima facie case of negligence. Defendant contended that there was no testimony or other evidence showing that the bus was negligently operated or that the vehicle knocked down decedent, arguing that expert testimony had to have a scientific or medical basis and could not be based on speculation. The court denied the motion. Dr. Ali Sadegh, an accident reconstructionist for the defense, testified that the absence of any leg injury was inconsistent with being struck by the front bumper of a bus. In addition, there was no physical evidence on the front bumper or to the side of the bus to indicate that “there was any contact with anything.” Finally, he opined that the abrasion on the left knee indicated that decedent “must have been falling down” before the contact with the bus. It was error to deny defendant’s dis-
The jury’s assessment of the facts surrounding an incident must be made upon competent proof, and the conclusions drawn by plaintiffs’ expert witness lack any evidentiary foundation in the record.
with plaintiffs’ attorneys” and confirmed that if, under his hypothesis, decedent was approaching from the apartment building just before she was hit, she would have been facing the bus, because the bus stop was situated just north of a driveway leading to the entrance of the Briarcliff apartment building. He dismissed the pos-
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[ COURTSIDE ] missal motion. The jury’s assessment of the facts surrounding an incident must be made upon competent proof, and the conclusions drawn by plaintiffs’ expert witness lack any evidentiary foundation in the record. Rather, his theory of the accident is based on a series of unsubstantiated assumptions, the foremost of which is that decedent had just left her place of employment as a home care worker and was waiting for the bus (or possibly approaching the bus stop from the south) when she was struck. The only admissible evidence concerning when decedent’s work day ended was given by her mother, Hadassah Levy, who put the time at “around twoish.” When decedent actually left her workplace is simply unknown. Even accepting, for the sake of argument, that she left the Briarcliff at 2:00 p.m., there remains the question of what she was doing during the half hour before her death. Under the scenario advanced by Phillips, decedent was waiting at the bus stop directly in front of the light pole to which the bus stop signs were affixed. The obvious problem with this supposition is that a person waiting for a bus gets on the bus when it arrives, and how decedent wound up under the bus rather than on it is unexplained. The majority points to no evidentiary proof to support the conclusion that defendant driver’s negligence caused the bus to strike decedent and pin her to the light post and then propel her into the roadway. Clearly, there is not a scintilla of evidence to support Phillips’s opinion as to the sequence of events of the incident; rather, the record is totally inconsistent with his theory of occurrence. It is suggested that decedent was somehow trapped by the light pole and could not escape being hit by the front corner of the bus as the bus pulled out. If this were the scenario, the front bumper of the bus would have come into contact with decedent first, trapping and propelling her. The evidence showed that there were no injuries to her lower extremities, and there was no evidence of physical contact on the front bumper or side of the bus. Also, Phillips’s theory does not explain why, when the passenger door opened to let on a passenger (or passengers), decedent did not simply get on board, or why, if decedent were somehow “trapped” between the bus and the lamp post, the other passenger (or passengers) who boarded did not see or hear the impact of
the bus striking her and propelling her to the front of the bus and then rolling over her. Finally, the hypothesis that decedent was trapped and struck in front of the light
The position and location of decedent’s body completely repudiates Phillips’s theory as to how this incident occurred. pole and propelled onto the roadway is belied by the fact of where decedent’s body was found. Under Phillips’s theory, decedent would have been propelled south and east of the point of impact toward the direction the bus was traveling in, and, thus, her body should have been located south, not north, of the light pole. In other words, if the bus was traveling southbound and struck decedent in front of the bus stop and propelled her onto the roadway, decedent’s body should have landed south of the bus stop. However, decedent’s body was found face down situated north of the bus stop. The position and location of decedent’s body completely repudiates Phillips’s theory as to how this incident occurred. The alternative possibility, that decedent was moving toward the bus from the south, is equally irreconcilable with the evidence. Apart from the failure to explain why neither the driver nor any of his passengers observed decedent’s approach from the front of the bus, if decedent left the Briarcliff at 2:00 p.m., as plaintiffs’ expert assumed, why was she not already waiting at the bus stop, as his primary theory maintains, instead of approaching the bus from the south, as he speculated? The competent evidence is consistent with an alternative — and more probable — sequence of events. Decedent left her place of employment at about 2:00 p.m. She took the overpass to the other side of the Henry Hudson Parkway and bought a bag of groceries. She retraced her path back across the Parkway overpass, which left her at a crosswalk some 100 feet north of the BX10 bus stop. At some point while crossing the service road and walking south toward the bus stop, she saw the bus pull up and take on passengers, realized CONTINUED ON PAGE 34
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she might miss it, and began to run. Once alongside the bus, she would have been positioned on the right side of the vehicle, approaching the passenger door from the blind spot extending behind it. Burdened by a shopping bag in her left hand and a tote bag in her right, she was unable to wave or knock on the door to attract the driver’s attention, so she made the unfortunate mistake of turning to her left to step in front of the bus where the driver could see her standing in front of it. Tragically, she tripped over the defect in the curbing — or slipped on the leaves in the gutter or otherwise lost her footing — and fell or sprawled headlong with forward momentum into the roadway as the bus was pulling out. Unable to see her lying on the road surface because of the blind spot extending toward the right front of the vehicle due to the bus route signs, and with his attention directed to possible traffic to his left, the driver pulled out, running over her. The scrape abrasion mark on her left knee would indicate that she fell forward, scraping her knee on the roadway. Had decedent been struck by the bus and her body propelled approximately five feet into the roadway, as urged by plaintiffs’ expert, the contents of the grocery bag and her tote bag would have scattered onto the roadway. However, decedent was found face down with one hand clutching her tote bag and the other clutching a grocery bag, with the contents of the bags intact. Those facts support the inference that decedent suddenly tripped and fell while holding onto the two bags. That she was propelled approximately five feet into the roadway supports the conclusion that she fell while running, which explains how her body came to rest on the roadway at an angle facing southeast, five feet from the curb. This sequence of events is more plausible than the one presented by plaintiffs’ expert witness and has the distinct advantage of having a sound basis in the trial evidence. It explains what decedent was doing during the half hour immediately preceding her death. It also explains why no one saw her standing at the bus stop or approaching the bus as the driver prepared to depart. Most significantly, it conforms to the evidence — the bag full of groceries intact, the absence of any indication of contact between decedent and the front or 34 April 25, 2016 / INSURANCE ADVOCATE
side of the bus, the location of decedent’s body north of the light pole, the angle of her body to the roadway, and the scrape found on her left knee. The position of decedent’s arms as depicted in police photographs — elbows at her side, her hands
There is no evidence to controvert Vincent Brady’s testimony that he never saw decedent and that neither he nor any of his passengers were even aware of any impact with the bus. Thus, there is no proof of negligence on the part of the bus operator. positioned toward her head and still grasping her bags — is further suggestive of someone trying to break a fall. By contrast, the theory propounded by plaintiffs’ expert does not correlate with any of the facts and is merely specious. It required the jurors to speculate about facts not in evidence in order to accept its conclusions, which renders it “worthless as evidence” (Cassano v Hagstrom, 5 NY2d 643, 646 [1959]). To attribute negligence to Vincent Brady, plaintiffs postulate that decedent was present at the bus stop in a location where she could be readily observed by the driver, in the exercise of due care, when he pulled away from the curb. Their hypothesis rests on the expert’s assumption that decedent went directly to the bus stop after finishing work. No evidence supports this supposition. No one saw decedent at the bus stop, and the time of her departure from her job at the Briarcliff can only be approximated (“around twoish,” according to her mother). The physical evidence — a bag full of groceries — suggests that, contrary to plaintiffs’ theory, she may have gone shopping before attempting to catch the bus. Plaintiffs’ second major deviation from the record evidence concerns the mechanism of the accident. According to their expert witness, decedent was struck while standing in front of the light pole and projected forward and into the roadway by the front bumper of the bus. There is sim-
ply no evidence, either from the condition of the bus or the physical injuries sustained by decedent, that she came into contact with any other part of the bus other than the right front tire. Finally, her body was found north of the light pole, a location altogether incompatible with an impact between a bus traveling south and a person standing at that light pole. It is settled that the driver of a vehicle is not chargeable with negligence for failure to see a pedestrian who suddenly darts into the street (Rucker v Fifth Ave. Coach Lines, 15 NY2d 516 [1964], remittitur amended 15 NY2d 852 [1965], cert denied 382 US 815 [1965]; Williams v New York City Tr. Auth., 108 AD3d 403 [1st Dept 2013]). There is no evidence to controvert Vincent Brady’s testimony that he never saw decedent and that neither he nor any of his passengers were even aware of any impact with the bus. Thus, there is no proof of negligence on the part of the bus operator. Plaintiffs attempt to invoke the Noseworthy doctrine to subject this wrongful death action to a lower standard of proof (Noseworthy v City of New York, 298 NY 76 [1948]; see Wragge v Lizza Asphalt Constr. Co., 17 NY2d 313 [1966]). However, Noseworthy does not relieve a plaintiff of the obligation to establish that the defendant’s negligence substantially contributed to the injuries sustained (see Derdiarian v Felix Contr. Co., 51 NY2d 308, 315 [1980]). Moreover, under circumstances such as these, where there are no witnesses to an accident, the doctrine is inapposite, because the parties are equally situated, neither having knowledge of the surrounding events (see Wright v New York City Hous. Auth., 208 AD2d 327, 332 [1st Dept 1995]). Even where applicable, at least an inference of negligence must be established before a plaintiff may invoke the doctrine, and mere contact with a vehicle is insufficient for that purpose (Wank v Ambrosino, 307 NY 321 [1954]; Trillo v Gerry, 135 AD2d 625 [2d Dept 1987]). Accordingly, it is my opinion that the judgment should be vacated and the complaint dismissed.[IA]
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