When it comes to emerging risks, nowhere are they more apparent han in the insurance industry. From cyber liability to product recalls to Ebola, the list of risks insurers must anticipate for their
clients is long and varied, and continues to grow.
A new issue insurers will be grappling with encompasses losses involving
illegal or medical marijuana. Possessing, using or growing marijuana is
illegal under federal law, but many states are passing laws that conflict with
that statute. And while the generally accepted rationale for denying claims
is whether or not the loss is illegal under federal law, state statutes are
challenging that premise.
As a growing number of marijuana initiatives appear on state ballots, this
provides a complex coverage dilemma for insurers. More drivers under the
influence of drugs are getting behind the wheel of a car, increasing the risk
of accidents for all. A recent survey by the National Highway Traffic Safety
Administration found that the number of weekend nighttime drivers under
the influence of drugs has increased to 20 percent since 2007. The survey
also found that drivers under the influence of marijuana are more like to be
involved in accidents.
Then there is the question of coverage for losses involving legal and
illegal grow operations. Is an insurer liable if a homeowner is allowed to grow
marijuana for medicinal purposes and suffers a fire as a result? What if there
is a robbery and several plants are stolen? How will the insurers determine the
value of the plants and their potential crop yield? Is there coverage since the
federal government says growing marijuana is illegal, but the state says it is
allowed under specific circumstances? (Hint: While the Constitution says that
federal law trumps state law, the federal government seems to be turning a
blind eye to the conflict.) Our cover story examines these issues and more.
Another issue that has required creative risk management strategies
involves cybercrime. As hackers become even more sophisticated, it is not
a matter of if an insurer or its clients will be breached, but when. Having
proper insurance coverage, assembling an incident response team, providing
employee training and creating proper procedures are just some of the risk
management strategies companies should be employing. We tackle this topic
from several perspectives.
You can find out more about the emerging risks insurers face and how to
manage them at the America’s Claims Event (ACE) this June 17-19 at the Hilton
Austin in Austin, Texas. More information is available at americasclaimsevent.com.
I hope you’ll make it a priority to attend because you really can’t afford to miss it.
Patricia L. Harman