Download Shorepoint Presentation – 2015 Fall SRMC Conf

Presented by
Ray Markley, President
Shorepoint Insurance Services
October 15, 2015
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A Risky World?
Some Current Events…
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Insurance often follows
singular risk assumptions
and treated accordingly:
•
•
•
•
Property
General Liability
Automobile
Worker Injury / Death
And some unfamiliar…
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For many companies, unique
risks exist today requiring
multiple treatments
simultaneously:
•
•
•
•
Supply Chain Interruption
Product Liability
Regulatory Risk
Product Contamination /
Recall
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Supply Chain
A sequence of events, which
may include conversion,
movement or placement,
which adds value to goods,
products, or services
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Supply Chain – Fast and Slow
Interruption by
Nature or Man
Government Agency
Product Liability
Product Recall
22
Product Flow Chart
Overseas
Customer
USA
Distribution
Headquarters
Overseas
Contractor
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Product Flow Chart
USA or Overseas
Customer
USA
Distribution
Headquarters
Finished Product to domestic or
overseas customer
Finished Product in from overseas
Overseas
Contractor
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Product Flow Chart
Finished Product
Finished Product out to US
Raw Materials
in from US
US
Supplier
USA
Headquarters
Manufacturing
Overseas
Customer
UK
Subsidiary
France
Subsidiary
(Manufacturing)
Raw Materials
in from overseas
Raw Materials
in from overseas
Overseas
Supplier
Finished
Product
Finished
Product
UK
Customer
France
Customer
Finished
Product
China
Subsidiary
Finished
Product
Overseas
Customer
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Product Flow Chart
Overseas
Contractor
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Product Liability
 The legal liability of manufacturers and sellers to
compensate buyers, users, and even bystanders, for
damages or injuries suffered because of defects in goods
purchased. A tort which makes a manufacturer liable if
his product has a defective condition that makes it
unreasonably dangerous to the user or consumer.
 Document
 FDA Food Safety Modernization Act
 Soft Clause
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Product Liability
and Supply Chain
Bodily Injury:
 Patron was dining at a restaurant
when she decided to order raw
oysters. Patron contracted food
poisoning and was hospitalized. She
died four days later.
 Involved:
 Farm
 Processor
 Distributor
 Restaurant
Focus by plaintiff was inadequate warning.
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Regulations for Businesses & Owners
Regulatory actions are
increasing, resulting in:
• Refusals
• Seizures
• Litigation/Defense Costs
• Fines
• Penalties
• Criminal Conviction - Jail
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Product Recall – Food & Things
Product Recall – Accidental or Malicious
• No Coverage under Property or Liability Insurance
• Focus on accidental adulteration and contamination
• Customer contracts demand Supplier “handle it” – 3rd
Party Exposure
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Product Recalls are Scary
“May 27, 2012 - DENVER (Reuters) - The Colorado
farm that grew cantaloupes linked to a listeria
outbreak that killed more than 30 people [last
year] has filed for Chapter 11 bankruptcy
protection, court documents showed.”
5 years probation.
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Product Recalls are Scary
“Peanut Corporation of America, the company at the
crux of the nationwide salmonella panic, filed for
liquidation bankruptcy in February 2009, just a month
after it first announced a recall of peanut butter
products processed in its Blakely, Ga., plant.”
61 year old CE0 sentenced to 28 years prison in 2015.
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Marine Insurance Help?
Advantages:
• Global
• Non-Filed
• Physical Goods Focused – “Ø Tail”
• Fit for the Times – War Risk & TRIA
• Creative
• Integrated
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Summary
Although many risks exist today:
e.g., “Normal” risks such as Property Loss
• Marine Insurance also looks at:
• Supply Chain Breaks
• Product Liability
• Regulatory Risk
• Product Contamination / Recall
Integrated proper identification, analysis and
treatment will go a long way to helping clients prosper!
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Ray Markley
714-430-0035, ext. 217
[email protected]
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