Glenn Drees, Managing Director—Food & Agribusiness Practice
Unfortunately, the potential for an active shooter incident exists in every industry throughout the United States. That is why it is important to prepare for such an event, and to be ready to respond if the unthinkable happens. Below are a few suggestions to help you prepare.
- Evaluate security at all work sites, establish a security plan for each location and update on a regular basis.
- Initiate safety measures including increased security (alarms, cameras or guards), locking doors to limit public access and lighted entrances and exits.
- Hire responsibly. No one should be hired without a reference check.
- Establish zero tolerance for aggression in the workplace and clearly communicate it.
- Create an evacuation procedure from all areas of your building, including designated assembly points and maps showing primary and secondary escape routes. Also label safe points and hiding places.
- Gather contact information for hospitals and emergency responders including phone numbers and contact people.
- Build procedures for employees to follow including fighting as a last resort and what to do when the police show up.
- Create a written plan and distribute to employees.
- Conduct employee training including mock drills. Evaluate the effectiveness of the drill and adjust your plans and training as needed.
Perhaps workplace violence can’t be totally eliminated, but there are things that can be done to minimize it. Awareness and preparation are key factors.
For more information, register for our upcoming webinar series here: ajg.com/lp/workplace-violence
|Preparation & Prevention Thursday, April 11th, 12:30pm CST||Recovery for Your Organization Thursday, April 25th, 10:00am CST
When Replacement Cost Coverage isn’t enough
Property insurance policies can vary greatly in quality, and that is especially true for Food and Agribusiness operations.In July 2018, a Gallagher Food & Agribusiness client in the Pacific Northwest suffered a total fire loss to a 50,000-sq. ft. processing plant. The building was originally constructed in the early 1970s, and new laws and ordinances had since gone into effect regarding building codes. Replacement Cost coverage gave this client brand new building materials of like kind and quality, but it would not pay for any additions that were not previously part of the building.
When the insured submitted plans to the city to rebuild, they were informed of mandatory upgrades that would need to be part of the new structure, including expensive electrical and sprinkler system installations.
The insured had hired Gallagher just a year prior after we helped them identify and remediate more than a dozen key coverage shortfalls. One of those coverage gaps was called Ordinance or Law, Increased Cost of Construction. This coverage pays up to a specified sublimit to address the increased costs incurred from mandatory building code upgrades. In this case, Gallagher had secured a $250,000 limit, whereas before our team took over, the client had just $25,000 in funds dedicated for Increased Cost of Construction.
In the end, the insured utilized nearly all of the funds available, and Gallagher’s expertise had saved the client more than $200,000. Gallagher provides our insureds a risk management partner that has successfully negotiated hundreds of complex Food & Agribusiness claim scenarios on behalf of the nation’s most respected growers, packers, and distributors. We are a brokerage team dedicated to the coverage intricacies of the modern-day Food & Agribusiness operation, and there is no doubt, when the fateful day arrives, leveraging our practice group will make a material difference in your organization’s ability to withstand a potentially catastrophic claim.
Contact Chase or your Gallagher advisor for more information.
Picture this: your Human Resources executive walks into your office with a concerned look on her face. An employee, upset over the fact that she has just had an argument with her supervisor, has handed her a letter. The letter alleges that the supervisor has been harassing the employee and the employee demands some money. After banging your head on your desk, you scan the letter and email it to the attorney who handles all of your employment matters, asking her to advise you as to how to respond to the employee.
A week later, you receive a bill from your attorney, and you suddenly remember that you have an Employment Practices Liability insurance policy! You email your attorney’s bill to your insurance broker and ask him to have your insurance company pay it.
Forty days later, you receive a letter from the insurance company. It says that your claim is covered, but they will not pay your attorney’s bill. It says something about “pre-tender expenses.” You immediately call your insurance broker, who confirms the bad news.
An Employment Practices Liability (“EPL”) insurance policy is an excellent tool for any business. Not only does it provide coverage for many employment-related claims, it may also cover third-party discrimination claims as well. However, as this scenario illustrates, it is important to be aware of the terms and conditions in your policy.
First and foremost, you must notify the insurance carrier if you think you may have a claim. Each policy defines “claim” differently, so the possible claim will need to be evaluated in conjunction with the policy language.
When it comes to EPL claims, time is of the essence. All claims need to be reported within the time period specified by the policy, so it’s important to review your particular policy for reporting requirements. If you do not report your claim within the time period specified by the policy, the insurance carrier will deny coverage. And, as the employer in the scenario above learned, your insurance carrier will not reimburse you for any expenses you incur prior to tendering the claim. It is understandable that your first instinct is to retain an attorney to provide advice and/or a defense. Just keep in mind that costs or fees incurred prior to reporting the claim to the insurance carrier will not be covered, nor will they count toward satisfaction of the self-insured retention.
You may have an attorney who you would prefer to handle this claim on your behalf. However, under any policy that gives the insurer the right and duty to defend claims, the insurance carrier has the right to assign defense counsel of their choice. Be sure to discuss the assignment of counsel with your adjuster before retaining an attorney. There are some policies that give the insured the duty to defend claims; however, you may choose an attorney only with the consent of the adjuster. In addition, the insurance carrier will only reimburse you for defense costs that the adjuster deems to be reasonable and necessary, so it is important that you discuss defense plans with the adjuster as soon as possible.
Finally, it’s likely that you have strong opinions as to how the insurance carrier should handle your claim. You might be outraged by the fact that an employee has made the claim, and you don’t want the insurance carrier to pay them a dime. On the other hand, you might want the claim to settle quickly to avoid any adverse publicity. Regardless, if the policy gives the insurer the right and duty to defend, the insurer can handle the claim in any way it feels is prudent. If the policy provides that you must consent to a settlement, then there may be risks to you if you refuse to consent to a settlement and the carrier misses an opportunity to settle the claim.
The good news is, you have EPL coverage. This coverage is vital for all companies, regardless of size, due to the frequency of claims that are received by employers. There are other policies you may already have that work in the same manner as EPL policies, such as Directors & Officers, Errors & Omissions and Privacy & Security (Cyber) Liability. These policies have similar requirements regarding
the timeliness of reporting, working with approved counsel and offering settlements.
Contact Christine for more information.
From Boom to Bust: How Weather Controls the Agribusiness Industry
Cole Duffey, Account Executive
Each year in late September, fields across the Southeastern United States begin to take on a snowy white hue. The source of this pattern is America’s long-standing top cash crop and the world’s most commonly used fiber: cotton.
Cotton has long been a leading source of economic prosperity for the U.S., but like with any crop, some years are better than others due to the countless variables that go into farming. In the fall of 2018, as harvest season drew near, it was looking like the entire Southeast was set to have a banner year for cotton. Light showers and healthy doses of sunshine throughout the spring and summer months had the crop thriving and the farmers and ginners expecting a hefty return.
Unfortunately, mother nature had a different plan. In the second week of October, Hurricane Michael was growing quickly as it approached the Gulf of Mexico. Rapidly heading toward the Southeast, Hurricane Michael’s potential impact suddenly became a reality. From the Florida Panhandle all the way to Georgia’s eastern coast, Hurricane Michael ravaged nearly everything in its path, particularly the farms and crops that make up much of this real estate.
The aftermath of Hurricane Michael was devastation to the Southeastern agricultural economy. In Georgia alone, the estimated farm-related damages swirled upwards of $1.2 billion. The farmers are left with crop insurance; however, this only covers a percentage of the 10-year average yield, rendering the previously record crop useless. The cotton ginners, however, are largely left with a business to run and no goods to do it with. While most ginners have some stake in farming themselves, the majority of their cotton ginning business typically comes from a variety of farmers in their area. This is not unique to the cotton industry, rather a common issue in agribusiness for companies that rely on the crops of their farmers.
With no direct ownership of the cotton prior to being picked, how can a ginning business protect itself from a situation like this? The primary solution to this ongoing problem has been the development of parametric weather programs, essentially allowing insureds to gamble on weather derivatives. For example, say the cotton crop in a given region historically shows to have a profitable return when rainfall totals between 4 and 9 inches for the season. The ginner can’t certainly project how many inches of rainfall there will be, so parametric coverage would allow them to insure against losses due to seasonal rainfall numbers outside of that 4 to 9 inch range. In its simplest form, for every inch less than or in excess of the “profitable range,” the insured would receive a specified amount of coverage. This concept applies to a variety of hazards that could damage or destroy a crop. These policies are tailored to the individual business, allowing the client to design a unique coverage structure specific to their financial losses from the weather’s impact on a given crop. While there is no way to fully cover the financial loss suffered from detrimental weather, these parametric policies appear to be the closest product to crop insurance for businesses in these situations.
Contact Gallagher today to learn more.