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Gearing Up for Black Friday on Thursday

Remember when Thanksgiving was one of the few days of the year where every store was closed and Black Friday mayhem was reserved for, well, Friday? Well, not anymore. These days more and more stores are starting their Black Friday sales on Thursday – sometimes as early as 6 a.m. At least it’s good to know we have options when we get tired of turkey and/or family.

If you are one of the 140 million people that the National Retail Federation expects to shop this weekend (33 million of whom are planning to shop on Thanksgiving Day), remember to have fun and, most importantly, stay safe. To that end, insurer Chubb has provided the following infographics for both retailers and consumers who want to stay out of harm’s way and make sure their experience is a success.

Happy Thanksgiving.

 

Most Companies Do Not Expect – And Remain Unprepared For – Lawsuits Against Their Directors

Seeing a chasm between risk perception and risk reality has ceased to surprise me. Virtually every survey, study and report I come across reveals that executives either (a.) don’t understand the risks they take or (b.) understand the risks they take but just opt not to do anything about them.

Well, here is another surprisingly-not-surprising revelation: 80% of public companies think it is unlikely that their directors and officers will be sued. This is despite the fact that, according to the latest “Chubb Public Company Risk Survey,” 23% of companies have already been sued, and the rising risks of more lawsuits in the future due to rising mergers-and-acquisition activity and increasing enforcement actions related to the Foreign Corrupt Practices Act (FCPA).

Let’s look at the latter part first: FCPA.

The Walmart bribery scandal in Mexico has brought this once-dormant law into mainstream focus, but it is the Justice Department’s behavior in recent years that highlights the growing risk for companies. In 2010, DOJ imposed $1.7 billion in fines on companies for FCPA violations/settlements. By contrast, that number was just $2.7 million in 2002.

As a multinational company, you can’t look at these numbers and see anything but a federal priority to stamp out illicit corporate behavior overseas. And that means more risk of fines, lawsuits and settlements that could be even more damaging to a reputation as they are to a bottom line. Insurance may protect against some of this, but not all.

“An FCPA investigation can cost a company millions of dollars, and violators have faced enormous fines,” said Evan Rosenberg, senior vice president and global specialty lines manager for Chubb. “D&O policies can cover directors’ and officers’ defense costs for an alleged FCPA violation and fines for non-willful violations of the act.” (For more on that, here is a good breakdown of all the FCPA insurance issues companies should be aware of.)

Regardless, more than two-thirds of survey respondents (78%) are not worried about an investigation due to an FCPA violation, and 13% have decreased the financial and human resources they devote towards mitigating FCPA-related losses.

The mergers and acquisitions risk is also foolish not to consider.

But … and stop me if you’ve heard this one before … most companies are acting foolishly.

A full 64% of the survey respondents have been involved in a merger, acquisition or restructuring over the past two years. Yet, more than one-quarter of companies (26%) do not have documented merger and acquisition protocols and have no plans to develop them in the next 12 months.

“While M&A-related lawsuits may be covered by the company’s directors and officers liability policy, documented protocols may help improve the company’s defense in court or result in a lower settlement amount,” said Rosenberg.

Business Travelers Refuse Assignments to Dangerous Areas

When bossess tell employees they have to travel to dangerous locations — effectively asking them to put their company’s profits ahead of personal safety — workers are increasingly saying thanks, but no thanks. According to a new report by the insurer Chubb, nearly one-fourth of people surveyed would refuse to go on a business trip to a location they consider dangerous unless their employer provided them with emergency medical and other services. In all, 23% of business travelers said they would refuse to go on the business trip, 21% said they go but would refuse to go on the next trip, and 14% would go but look for a new job after returning.

Workers apparently become more willing if services are provided, however. If their employer provided access to reliable emergency medical services, 42% said they would go on the assignment, and 47% would travel if their employer provided pre-travel information about the country. If their employer provided access to legal assistance abroad, 38% would agree to go.

“Organizations that fail to address the risks may lose employees as the economy improves, and even face reputational damage and legal liability,” said Jim Villa, senior vice president of Chubb’s accident and health business.

Chubb, not so surprisingly, offers some products and services to mitigate travel to high-risk locations. As do others. I spoke with Charlie LeBlanc, an exec at ASI Group, last year following all the turmoil in Egypt. With Cairo in chaos, he helped several Westerners get out safely.

Here’s an excerpt of the piece I wrote at the time.

Having traveled to Egypt many times, he knew there were many foreign nationals living and working there who would need assistance when the riots broke out. He did not know there were close to 80,000 expats, however. And he never imagined there would be an event so widespread that so many would need his company’s advice at once. “It seemed like all 80,000 were calling at the same time,” said LeBlanc. He expects that this will be the largest event of this type that he will ever come across. “We can’t envision a larger-scope scenario,” said LeBlanc. “You know, short of Armageddon.”

LeBlanc’s company is who you want to call if you are trapped in such a situation. Through a 2008 acquisition, his ASI Group, which was founded in 1989 as Air Security International, became part of MEDEX, a travel assistance and international medical insurance provider that works with insurers including Travelers and Chubb.

Immediately following the unrest in Egypt, the ASI team had some 30 corporate clients seeking consultation on how to keep their employees safe. All told, the company directly chartered more than 800 people out of Egypt in short order.

There were many others who wanted advice but wound up on State Department flights. ASI provided them with information on where they needed to go and how to sign up to get evacuated, but they made final arrangements on their own. LeBlanc does not know how many cases of indirect assistance his firm was involved in. “We stopped even counting,” he said.

For most people, all they wanted was a way out of the country. “When you’re talking to these folks,” said LeBlanc, “they’re frustrated, they’re upset, they’re discouraged and some of them…are worried that they’re not going to be able to get off the ground.”

Situations like this help illustrate that travel assistance services can be of value. The Arab Spring scenario was unprecedented in many ways, but it’s likely that companies working in the Middle East or other treacherous locations may find themselves in need of help when their employees get stuck.

And according to this latest Chubb survey, it will be increasingly harder to even get them to go in the first place if you have no plan to help them out when trouble arises.

The Top 25 Property/Casualty Insurance Writers

No, neither Johnathan Franzen nor myself made the list. We’re talking about the companies that wrote the most business in 2010. Here’s the full list of the top 25 U.S. carriers in terms of net premiums written, according to AM Best.

1. State Farm Group—$50,808,635
2. Allstate Insurance Group—$24,796,656
3. Liberty Mutual Insurance Cos.—$21,483,996
4. Berkshire Hathaway Insurance—$21,358,316
5. Travelers Group—$20,594,458
6. American International Group—$19,687,720
7. Nationwide Group—$14,489,531
8. Progressive Insurance Group—$14,476,676
9. Farmers Insurance Group—$14,129,512
10. USAA Group—$10,679,414
11. Hartford Insurance Group—$9,688,760
12. Chubb Group of Insurance Cos.—$8,927,736
13. CNA Insurance Cos.—$6,188,618
14. American Family Insurance Group—$5,324,290
15. Allianz of America—$4,666,301
16. Auto-Owners Insurance Group—$4,485,442
17. Munich-America Holding Corp.—$4,413,834
18. Zurich Financial Services NA Group—$4,400,123
19. Erie Insurance Group—$4,019,273
20. Ace INA Group—$3,705,475
21. Transatlantic Holdings Inc. Group—$3,418,020
22. W.R. Berkley Group—$3,392,330
23. The Hanover Insurance Group Property & Casualty Cos.—$3,053,508
24. MetLife Auto & Home Group—$2,983,236
25. Cincinnati Insurance Cos.—$2,965,462