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Imagine you are a prime contractor to a Department of the United States of America supplying logistical support for the war on terrorism in Afghanistan. As the prime, you are kicking on all cylinders, including purchasing comprehensive Employer’s Liability, Workers’ Compensation and Defense Base Act (DBA) insurance to cover your own employees against a worker injury claim abroad.

Then the phone rings.

iStock-187940286-falling-ladder-300x224A 30-year-old American worker hired by your subcontractor working on base encountered a swarm of bees while painting; he fell and was crippled. The sub isn’t paying his medical expenses and is apparently nowhere to be found. The injured employee’s bulldog lawyer is on the line threatening to sue your company directly for his client’s devastating injuries.

How can this be?

DBA coverage is workers’ compensation insurance that employers may turn to in the event that an employee is injured while working on a contract financed by the U.S. Government and performed outside the United States. Section 5(a) of the Act provides that “a contractor shall be deemed the employer of a subcontractor’s employees if the subcontractor fails to secure the payment of compensation.”

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Cloudy-300x168Last week, I had the great fortune of going to Cancun with my family. Sun, white sand beaches, amazing Mayan ruins (and traditions) intact. I’m sure you know what it’s like—kids buried in sand, beaming smiles, you relaxing in the sun (perhaps a touch of pink on the shoulders and nose), and an umbrella drink (or two).

Paradise.

And then, with little more than 30 minutes warning, came the rain. And I mean RAIN. Tons of it. Don’t believe me? See for yourself.

That is road, not a river. Those are cars, not boats.

Being in the insurance recovery business, after family concerns my mind immediately started accounting for the losses arising from the storm-related floods. Who was ready for this? Who thought they were ready for this? Who was totally unprepared? And did any of that matter?

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In our previous post, we started answering the question whether specialty cyber policies are likely to respond to two of the top five cyber threats for 2017 identified by Experian Data Breach Resolution in its industry forecast. In this one, we examine the remaining three.

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It’s a jungle out there. Penalties imposed under the Foreign Corrupt Practice Act for bribery charges proliferated like vines in 2016. In the dramatic conclusion of the Brazil-based Operation Car Wash probe, Brazilian construction giant Odebrecht-Braskem agreed to pay U.S., Brazilian and Swiss authorities $3.5 billion for paying bribes to government officials around the world. Teva, the international pharmaceutical company, was revealed to have paid bribes to Russian, Ukrainian and Mexican officials, and would have to pay nearly $500 million in penalties.iStock-512289218-jungle-path-300x200

But while these penalties are eye-catching, the internal investigations that responsible corporations undertake to avoid them can be even more expensive. A thorough internal investigation includes hiring outside attorneys, accountants, experts and consultants and sending them around the globe to probe potential bad acts in a company’s foreign offices. Sometimes, the fees continue to roll in even after settlement, when companies are ordered to pay outside monitors to make sure they are still complying with their FCPA obligations. A company may easily find itself on the receiving end of a multi-million dollar bill.

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No matter the industry, businesses continue to face ever-escalating workers’ comp insurance premiums. In an effort to keep costs down, many companies are turning to an increasingly popular alternative to traditional “guaranteed cost” or “retrospective premium” workers’ comp programs: “large deductible” (LD) policies. LD policies theoretically give businesses greater Chain And Padlock Around Dollar Bundlecontrol over claims exposure and costs while at the same time satisfying regulatory requirements by having an insurance company as the ultimate guarantor of claims payments. But while some businesses may save money with LD policies, they may also find their assets tied up for years unless they challenge some common—and often problematic—terms and conditions of their LD policy programs.

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In The Odyssey, Homer describes Orion as a giant hunter armed with bronze club. As the legend goes, Orion was killed—either by the sting of a great scorpion or by the bow of Artemis—and was placed among the stars, creating the well-known constellation.

Orion-stars-256x300Orion Insurance Company is now set to join its mythic namesake as an artifact of history, though without the long-lasting twinkle. Barring one important, if remote, opt-out scenario, Orion and its sister company, the London and Overseas Insurance Company Limited (collectively OIC), are expected to dim and fade away over the next few years.

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