Wednesday, August 24, 2011

Welcome to the Cavalcade of Risk!

Welcome to the Cavalcade of Risk. This is the 138th time that the Cavalcade of Risk has gathered blog postings from around the web on topics relating to risk.

The submissions to this Cavalcade were across-the-board thoughtful and informative. I've put them in order from the most general risk (for example, world-wide collapse) to most personal risk (for example, your own insurance rates going up).

The global risk of too much investment diversification:

Jason Shafrin goes against conventional wisdom and argues that on the large scale investment diversification increases risk: When does diversification Increase Risk posted at Healthcare Economist.

The risk from too few women in power at insurance companies and elsewhere:

At Risk Management Monitor, Morgan O'Rourke presents an excerpt of an interview with Bermuda Premier Paula A. Cox, Bermuda Premier Paula A. Cox on the Lack of Women Leaders in insurance and government. Although the article does not address insurance issues per se, it contains a link to a more comprehensive piece in which Cox talks about Bermuda's efforts to retain captive and reinsurance business and the effect of the many recent natural catastrophes on Bermuda's insurance industry.

The risk from insurers failing to recognize improvements in healthcare technology:

Jaan Sidorov at Disease Management Care Blog writes about "Software Eating the World of Healtcare." He reflects on the implications of a software-based health care world. It sounds pretty good to me.

The risk to disability and other insurers from failing to recognize changes in demographics:

Russell Hutchinson presents Insuring Older Lives: It's about employment, pricing, and claims management posted at Chatswood Consulting Moneyblog.
Hutchinson considers the termination age of 65 for a number of insurance benefits to be too young in the light of continuous improvements in mortality and an increasing number of people working past age 65. He considers other ways insurers could design the product termination.

The risks that have caused rising worker's comp insurance rates and what business owners can do to keep their own rates down:

Nancy Germond has a comprehensive post on why worker's comp rates are rising, and how business-owners can keep their costs down: Are work comp costs eating your lunch? posted At Risk Management for the 21st Century.

The risk to mental health workers of inadequate workplace protections:

Julie Ferguson presents Inadequate: Protections for mental health workers posted at Workers' Comp Insider.

The risk of your auto insurance premiums increasing as a result of accidents that may or may not be your fault.

On Dough Roller there's a very informative post on How Do Points Affect Your Auto Insurance Rate? The article points out the wide variation from one state to another about how both at-fault and not-at-fault accidents can hike your rates.

The risk of assuming you don't have insurance coverage

Free Money Finance posts Your Insurance May Cover More than You Think It Does. The moral of this post: Don't assume your insurance doesn't cover a specific loss. If the cost is high enough, it's worth asking if the company will pay.

The risk of having a really bad day

And, finally, ending with a smile, my favorite post of this Cavalcade: Henry Stern, LUTCF, CBC presents Why you need disability insurance posted at InsureBlog.

The next Cavalcade of Risk will be hosted by Emily Holbrook at Risk Management Monitor.

Tuesday, August 16, 2011

For all you civil procedure buffs . . .

Greg Straughn filed a lawsuit alleging that he was injured in a construction site accident while employed by James Czech because the general contractor, Williams Building Company, failed to maintain safe conditions.

Western World Insurance Company had issued a general liability policy to Czech under which Williams was an additional insured. It sought a declaratory judgment that it had no duty to defend or indemnify Williams because Czech had stated on his policy application that he had no employees. Williams filed a counterclaim seeking a declaration that Western World is obligated to defend it.

Czech did not answer the declaratory judgment complaint and was defaulted. Western World moved to dismiss Williams' counterclaim on the ground that the default judgment established that Czech's misrepresentation on his application caused the policy to be rescinded.

Williams opposed the motion on the grounds that the default judgment was improperly entered by the clerk rather than the court, and that the default judgment is interlocutory in nature.

In Western World Ins. Co. v. Czech, __ F.R.D. __, 2011 WL 2460934 (D. Mass.), the court held that a motion for declaratory judgment on the issues of defense and indemnity under an insurance policy are not for a "sum certain," and therefore the clerk was not empowered to enter the default judgment. It also held that in a multi-defendant case a court should withhold granting a default judgment against one defendant until a decision is reached on the merits against the remaining defendants.