Volume 4 Issue 5

May 1, 2014
DONOVAN INSURANCE SOLUTIONS
Ri sk Management 1 01 b y P aul Donovan
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Risk Management
101
1
7 Steps Brokers take
when youre sued
2
Preventative Care
Keeping you
Healthy
2
Encouragement
Chronicles
3
Weird Insurance
Policies
3

Insurance News 4
Hurricanes 2014 4
Inside this issue:
Basic Risk Management (RM) involves the three core areas of identifying threats,
assessing vulnerabilities of assets and prioritizing risk reduction measures. There are
typically four ways to deal with risks that include:
1. Avoidance - eliminate or exit from activities
2. Reduction - take action to lessen/reduce the impact of risk
3. Share/Insure - transfer the risk to an insurance carrier
4. Retention - accept and budget for (= take no action)
The four categories of risks are:
1. Strategic Risks - deal with uncertainties associated with an organizations overall long-term
goals and management. Ex: Competition, availability of capital, technology, social trends, and
potential partnership that could strengthen the brand.
2. Hazard Risks - deal with uncertainties with the organizations reduction in value resulting from
effects of accidental losses. Ex: (think insurance) Tort liability, property damage, natural
disasters, fire, earthquake etc.
3. Operational Risks - deal with uncertainties associated with an organizations operations. Ex: Adequacy of utilities
that serve the company, customer satisfaction, reputation, supplies, integrity of the brand, quality control etc.
4. Financial Risks - deal with those uncertainties associated with an organizations financial activity. Pricing risks,
reimbursements, liquidity, government regulations, asset risks, currency risks, interest rates etc.

When people ask, How much insurance should I purchase for my home, life, business etc.? I always say,
everyones tolerance of risk is different, some people want to accept more risk than others, what are you trying
to fix, accomplish or avoid? Then we figure out the best options to accomplish their goals within their price
range. For example, some people think a large deductible of $10,000 is perfectly fine, for others, a $100
deductible is more suitable. The point is, everyone is different. Thankfully, most insurance professionals will
ask enough appropriate questions to determine the level of risk and types of exposure that exist for individuals and
businesses. If you have any questions about risk, please feel free to contact us at 727-935-4858.
The only way to keep your health is to eat what you dont want, drink what you dont like and do what youd
rather not.
Mark Twain
P A G E 2
I N S U R A N C E NE WS Y O U C A N US E
7 Steps Brokers take when you are sued by Barry Zalma Esq.
Everyone agrees that preventing a problem is easier than recovering from one. Thats the concept behind
all preventive care measures. Most preventive care measures include regular check-ups, immunizations and
screenings as some of the best ways to help keep you and your family healthy. This type of health care,
called preventive care, may also help you catch any health problems before they become serious. Talk to
your doctor about what care is right for you and see whats recommended for your age and gender:*
Most health plans cover preventive care without applying a copay, coinsurance or deductible when you see
a doctor thats in your network and when you meet certain requirements. However, some services may not
be covered (or have varying levels of service), so be sure to check the details of your plan before you make
an appointment with a doctor.
One of the keys to successfully navigating preventative medicine is knowing what is and isnt covered. Sometimes,
your doctor will order tests during your preventive care visit that are not preventive care. These tests may be subject
to deductibles, copays and/or coinsurance. Your doctor may also treat an existing condition (or you may have symptoms
of an illness at the time of your visit). Treatment or tests for that existing condition are not preventive care and are sub-
ject to deductibles, copays and/or coinsurance.
Your responsibility
Be sure you understand what is covered by your health plan before you make an appointment with your doctor. Call the
number on the back of your member ID card for information about how your health plan pays for preventive care. A
recommendation or discussion with your doctor does not guarantee coverage or a certain level of coverage.
Its important your doctor's office submits a claim to your health plan that clearly shows whether you received covered
preventive care. The provider is responsible for complete and accurate coding that reflects the services provided.* If
you have any questions about your coverage, please feel free to contact us.
Preventive Care helps keep you healthy and cut costs
In a recent article of P&C 360 Magazine attorney Zalma talked about the necessary steps to take when youre
presented with a lawsuit against you or your company. For instance, as insurance brokers we provide General
Liability insurance to our clients that are required to protect themselves with insurance coverage. When a suit
is filed against a person insured, the wording of every liability insurance policy requires the insured to report
that suit to the insurance carrier in writing. By custom/practice, most brokers accept email or verbal
communication as a first report and then the broker/agent completes a written Acord Notice of Loss form to
submit to the carrier (naturally copying the insured). Many states require agents to report the loss within 15
days from the moment of notification. Brokers must also do the following:
1. Recognize that their license obligates them to report the loss.
2. Immediately obtain from the client insured a copy of the summons and complaint
3. Properly fill out an ACORD notice of loss.
4. Attach the copy of the summons and complaint to the ACORD notice of loss.
5. Obtain from the insured the name, address and telephone numberboth office and cellof the per-
sons with knowledge of the claim and suit.
6. Obtain from the insured a brief summary of the facts that give rise to the summons and complaint.
7. Immediately after obtaining the basic information, deliver the ACORD notice and summons and
complaint to every insurer who may potentially provide coverage to the in-
sured for the claims alleged in the suit.

An insurance agent or broker should never:

1. Delay delivering notice of claim to the insurer.
2. Fail to respond to telephone communications from clients.
3. Fail to communicate or respond to inquiries from the plaintiffs counsel.
"A man is walking down the street smoking, drinking and swearing to himself. A preacher came over to
him and said, Im an old man and Ive never smoked, drank or swore in all my years. The man said, yes,
but youve never sold insurance for a living either.
I don't find health-related puns funny anymore since I started suffering from an irony deficiency. Anonymous
P A G E 3
V O L U M E 4 I S S U E 5
Wei rd I nsurance Poli ci es b y P a u l Do no v a n ( j u s t t he me s s e ng e r )
Encouragement Chronicles B y P a u l D o no v a n
There was an old mule. One day accidentally he fell into the farmers well. The farmer has evaluated the sit-
uation and thought to himself, that neither the well nor the old mule was worth the efforts to save them. Thus
he decided to haul dirt to bury the old mule in the well. So the farmer called his neighbors and together they
started shoveling dirt into the well. The old mule was terrified and hysterical in the beginning. But soon one
hopeful idea came to his mind every time when a shovel of dirt landed on his back, he would shake it off
and step up! He repeated these words to himself again and again: Shake it off and step up. This way he
could struggle the panic and encourage himself. After some time, the mule had stepped over the wells wall.
Although terribly tired, he was the winner, he saved his own life. He decided to face his adversity positively
and not to give up, and thus he won. What seemed like it would bury him, actually saved him, owing to his
confidence and unresting efforts. When life hits hard, shake it off and never ever give up.
Were all familiar with Life, Health, Auto, Homeowners and Commercial insurance policies. However, heres a list of
some of the craziest policies in existence.
1. Manufacturers pay handsomely for celebrities to endorse their products. "Ugly Betty" star America Ferrera's
smile for $10 million, NFL star Troy Polamalu's locks for $1 million, supermodel Heidi Klum's legs for $2.2
million and Dutch winemaker Ilja Gort, insured his nose for $8 million.
2. Think your insurance premiums are out of this world, consider SpaceShipOne, which, as the first non-government
backed space plane to leave the earth's atmosphere, carried a $100 million Lloyd's liability policy to a record-
breaking altitude of 62 miles (328,461 feet) in 2004. Insurance policies are also in effect that cover against being
maimed or killed by falling space debris and from disintegrating satellites. The future suggests "space weather"
insurance to businesses exposed to potential disruptions in power supplies, transportation and communications sys-
tems caused by magnetic storms expected to accompany the new 11-year solar cycle that begins in 2012.
3. Fine art requires care and specialized insurance. In 1991, an art dealer commissioned a frozen sculpture
that was a life-size cast of his head made entirely out of his own blood. Years later, during a kitchen renovation
builders unplugged the freezer containing the artwork. The ensuing trail of red liquid across the floor led right
back to the claims desk.
4. Wedding coverage has become commonplace as the average cost of a wedding in the United States has grown to
$29,000. It protects the nonrefundable expenses, including cancellation due to serious illness, injury, extreme
weather, a missing caterer or officiate, a bankrupt event facility. Theres even a change of heart. rider to help pay
counseling costs to help mend the broken heart. P.S. Coverage only applies if the wedding is called off 180 days
in advance, and only covers money spent by "innocent party financiers," i.e., the parents. Self-funding spouses-to-be
won't recover a dime.
5. Entertainers and professional athletes sometimes insure their best asset against loss of income if they're unable
to perform. Notable body-parts policies include soccer star David Beckham's $70 million legs, Bruce Springsteen's
$6 million voice, "Lord of the Dance" Michael Flatley's $40 million lower half and KISS front man Gene Simmons'
$1 million tongue. However, if Rolling Stones guitarist Keith Richards jams a finger and can't perform the open-
ing riff to "Start Me Up," he has a $1.5 million disability income insurance policy to back (or Start) him up.
6. No laughing mattersome of the funniest movies made in Hollywood have taken out million dollar policies if, by
chance, a moviegoer were to die from laughing.
7. Anti-Lottery winning insurance. With the large lottery payouts, employers are aware of office
employee pools that can be developed to share in the winnings and increase their odds. Employers
can now purchase insurance against two or more of their staff winning the lottery and not returning to
work. The coverage helps the employer replace them.
A liberal is just a conservative that hasn't been mugged yet. Anonymous
- The tragedy of the ferry sinking in S. Korea on April 16th, 2014 has left at least 302 people, mostly students, missing or
dead. Confirmed dead from this accident is at 188 lives.
- A massive mudslide on March 22nd, 2014 occurred just east of Oso Washington. The debris and mud field covered an
area of 1 square mile. As of April 29th, 2014, the slide had killed 41 people with 2 more remaining missing.
- April 30th 2014 Governor Risk Scott of Florida declared a state of emergency for 26 north Florida coun-
ties that have experienced high rain/flood damages. More than 300 calls have come in from people re-
questing evacuation.
- In conjunction with the same storm system flooding north Florida, the south eastern states experienced
sever damages from the same tornado packing storm system. The tornadoes have left millions of dollars in
destruction of property and at least 34 dead.
- The search continues for the missing Malaysian airlines plane in the Pacific Ocean west of Australia. Submarines
armed with sophisticated sonar equipment continue to scour the ocean floor.
- The recent scandal surrounding billionaire Donald Sterling, owner of the L.A. Clippers, over racist
comments has earned him a lifetime ban in the NBA. One can only speculate if the employees of the
company will file any (EPLI) Employment Practice Liability Insurance claims.
- Wildfires around the San Bernardino National Forest are burning out of control (over 1,000 acres) and have
forced the evacuation of nearly 2,500 homes in the Rancho Cucamonga, California area. Winds have been reported up to
70 mph which have further complicated efforts to control the blaze.
Pg. 4
Insurance stories Making headlines
Term limits would increase the likelihood that people who come to Congress would anticipate returning to
careers in the private sector and therefore would, as they legislate, think about what it is like to live under the
laws they make. George Will
Hurricane Prediction for 2014
Every year Colorado State University researchers predict the number of hurricanes that should occur
within the Atlantic basin. I always thought that was sort of like The University of Miami predicting
cattle futures, but what do I know.
This year the experts are predicting a below-average hurricane season citing the likely development of
an El Nio event and unusual cooling of the tropical and sub-tropical Atlantic (global warming
enthusiasts on both sides of the aisle can debate this).
The CSU Tropical Meteorology Project team is calling for 9 named storms during the Atlantic hurricane season,
between June 1 and Nov. 30. Of those, researchers expect 3 to become hurricanes and 1 to reach major hurricane
strength (Saffir/Simpson category 3-4-5) with sustained winds of 111 miles per hour or greater.
The team bases its forecasts on over 60 years of historical data that include Atlantic sea surface temperatures, sea level
pressures, vertical wind shear levels (the change in wind direction and speed with height in the atmosphere), El Nio
(warming of waters in the central and eastern tropical Pacific), and other factors.
The report also includes the probability of major hurricanes making landfall on U.S. soil:
- 35% for the entire U.S. coastline (average for the last century is 52%)
- 20% for the U.S. East Coast including the Florida peninsula (average for the last century is 31%)
- 19% or the Gulf Coast from the Florida panhandle westward to Brownsville (average for the last century is 30%)
- 28% for the Caribbean (average for the last century is 42%)
Everyone remembers the 2004 and 2005 FL hurricane seasons - lets keep vigil and not get complacent.
If a hurricane strikes, we can blame the president for not being there; we can blame Congress and FEMA;
we can blame the state governments; but in the end, it's the mayors and the local city governments that have
to be prepared for emergencies and be prepared to act.
Michael Bloomberg