This Week in Risk Management — Nov Issue #2
As we officially enter the holiday season, the rest of the world is moving forward differently. This week in risk management brings us a new phase of COVID-19-related trials, mammoth Astroworld lawsuits, data protection issues for local governments, and a glimmer of hope in tech innovation. Let’s dive in.
Astroworld Organizers Faces Massive Lawsuits
Ten individuals have now died, and at least 25 were injured after the crowd swarmed the stage during Astroworld Festival’s first night. Its founder and lead performer, Travis Scott, was on stage when hundreds of the 5,000-strong group rushed toward center stage. Naturally, everyone is wondering who is liable for the tragedy.
Legal experts offer their two cents, saying that Scott will face a considerable amount of liability. He could be in hotter water if the individuals died of suffocation (easier to spot) instead of being trampled (often hidden), especially if he recognized from the stage that there was a problem with the crowd’s behavior. We’re unsure of what coverages he carried — but we’re guessing the allegations will push the limits to the max (or beyond).
Unsurprisingly, Scott will likely face many lawsuits, and NRG Park might also face legal issues. Although NRG Park carried $1 million in primary coverage and a $25 million umbrella policy, the allegations could be too steep to cover entirely. The legal landscape will likely be extensive with OSHA and several legal firms involved.
COVID-19 Brings a New Legal Wave — Jury Trials
The global pandemic stirred up plenty of legal issues. Some issues involved companies suing their insurers for losses related to COVID-19 shutdowns. Only now are those lawsuits entering the phase of jury trials.
Most cases were open-and-shut, meaning the virus-specific exclusions made a judge’s job relatively easy. Rarely did any of these cases reach a juror’s ears until last month. The lawsuit between a restaurant owner and Cincinnati Financial in Kansas City, MO., marked the first federal court jury to reach this phase from roughly 1,800 COVID-19 lawsuits.
Although the insurer won, this particular case signifies the beginning of a new phase. We expect to see more large organizations push a little harder and judges take a second or third look at these types of cases moving forward. We’re in the high-stakes phase now.
Cybersecurity Is Steep for Local Governments
We’ve all seen the headlines about how hackers and cybercriminals worked overtime the past few years. Now, the cost is catching up to some organizations, specifically local governments. Unfortunately, city, state, and county governments are an easy target for cyberattacks, such as ransomware or phishing.
Insurers have tightened up the purse strings, demanding that these organizations meet higher security standards. For example, insurance costs increase by 300% for the Local Government Insurance Trust in Maryland. And that’s just for starters.
If the hikes continue, more organizations will turn to self-insurance. It’s not unlike the risk pools born out of the late 70s and early 80s; however, the scenarios will be different. It’s strange how cyber insurance used to be secondary coverage that insurers tossed into the mix, and now most people consider it a critical policy.
Insurers Embrace Technology Focused on a Better User-Experience
Historically, the insurance industry has been conservative and watched cautiously when other businesses launched forward at warp speed in technology and innovation. And for a good reason, the past (and not the future) generally informs insurance carriers.
However, we are thrilled that Apollo chose a different path, fanning the flames of future evolution in the meantime. Dillon Roher, a Silicon Valley web analytic expert, is helping to lead the way. Although Roher is from Apollo’s home base, the Kansas City area, he knew he needed Silicon Valley experience to spur innovation forward. And it worked.
After Roher joined Apollo in 2020, it released a new insurance enrollment platform called My Aspire Quotes. The technology empowers agents and might be open to the public soon if Apollo’s aspirations come to fruition.
Not only do we love this story because of how tech-enabled we are here at Founder Shield, but because of how bold Apollo is. Roher, and other leaders, diligently move the insurance industry toward user-friendly technology while still harnessing the “old school” charm. Baby steps are turning into massive leaps, and we can’t get enough of it.
We enjoy hearing your thoughts, so don’t be shy.
Until next time…
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