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 * Sections
   * Critical Risks
   * Risk Management
   * The Insurance Industry
   * Claims & The Law
   * Workers’ Comp Forum
   * Risk Insiders
   * Sector Focus
   * .
   * Risk Central
   * Power Broker
   * Risk Matrix
   * The Profession
   * Risk Scenarios
   * Risk All Stars
   * Teddy Award
   * Sponsored Content
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   * Digital Issue
   * Issue Archive
   * Subscribe
 * Conferences
   * Ergo
   * National Comp
 * Advertise
 * Subscribe
 * More
   * Award Applications
   * Newsletters
   * &BrandStudio
   * Privacy Policy
   * About R&I
   * Contact Us

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TACKLING RISING LITIGATION: HOW QBE NORTH AMERICA’S ROBERT MCDADE REDUCED HIS
COMPANY’S LEGAL COSTS BY 48.7%

QBE North America’s Robert McDade thinks outside the box to manage risk.
By: Jared Shelly | September 2, 2021
Topics: Legal/Regulatory | Profiles | Risk All Stars | Risk Management |
September 2021 Issue



When Robert McDade sees problems, he gets creative.

And that’s just what happened when he tackled rising litigation and associated
legal spend at QBE North America for its large attritional claims book.

As the company’s vice president of litigation and recovery services, McDade knew
that larger firms would tackle the legal spend issue by developing an internally
managed staff legal program. It’s an efficient and cost-effective way to manage
claims, litigation and legal spend.

But QBE North America’s claim volume wasn’t high enough to build such a program.

That got McDade thinking outside the box. What if QBE North America worked with
a law firm to do the same things an internal group would do? Perhaps they could
act as an outsourced staff counsel?

McDade’s “outsourced staff counsel” idea had legs from the start.

After a meticulous selection process, QBE North America partnered with a firm
that showcased a history of superior claims litigation handling and was open to
creating a tailor-made program. After some initial testing, QBE North America
saw progress and expanded the program considerably.

Now, it is responsible for closing 25% of all claims litigation annually with a
48.7% reduction over average closed file legal costs. QBE North America even
reports the program has led to millions of dollars in cost savings.

Another problem that McDade was able to tackle in this last year was defense
counsel selection — and once again he steered away from conventions. He
implemented an artificial intelligence-driven program to evaluate firms based on
fees, indemnity outcomes and ability to deliver lowest possible settlement
awards.

“That process is difficult to do in a systematic way, because the nuances of
each claim make apples-to-apples comparisons difficult,” McDade said.



“As our system constantly learns, it makes that process much easier, and we are
already seeing significant cost savings. We are looking to support a large
portion of claims with this AI-driven model.”

Eric Sanders, head of claims at QBE North America, worked closely with McDade on
these projects. He called McDade a strong collaborator who uses his
open-mindedness to solve tough problems.

“Bob is a high-integrity leader who holds himself and others accountable. He
leads with empathy and brings a great blend of technical and leadership skill to
his role,” Sanders said. “One of his strongest traits is curiosity. The ability
to stay curious whether it is an initiative we are pursuing or in helping lead a
team is something I really admire about his leadership.” &

--------------------------------------------------------------------------------

Every year, Risk & Insurance selects deserving candidates to become Risk All
Stars. These are risk managers who, through their perseverance, passion and
creativity, make a big difference to the stability of their organizations.

See all the 2021 Risk All Star Winners here.

Jared Shelly is a journalist based in Philadelphia. He can be reached at
riskletters@theinstitutes.org.





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4 CRITICAL EMPLOYMENT PRACTICES AND FIDUCIARY LEGAL AND REGULATORY RISKS

These four risk trends are contributing to a challenging EPLI and fiduciary
insurance market.
By: Berkshire Hathaway Specialty Insurance | May 2, 2022

Companies of all sizes may be surprised at the ongoing hardening of the
employment practices liability (EPL) and fiduciary insurance markets.

For the past few years, terms have been tightening, limits have been reduced and
retentions have gone up. All this, largely due to a society that is more
litigious than ever and aggressive plaintiffs’ bars.

“Premiums are going up, but not as dramatically as the retentions in these
cases,” said Rhonda Prussack, senior vice president and head of fiduciary and
employment practices liability at Berkshire Hathaway Specialty Insurance.

“In order to stay profitable, insurers really have to respond to what’s going on
with the more aggressive plaintiffs’ bars and with all these new regulations.”

Consequently, it’s more important than ever that insureds are paying attention
to any legal and regulatory actions that could affect their coverages as they
prepare for increased underwriting scrutiny. Here are four to keep an eye on.


1) COVID LITIGATION

Rhonda Prussack, Senior Vice President and Head of Fiduciary and Employment
Practices Liability, Berkshire Hathaway Specialty Insurance

Employment practices liability insurance lines are feeling the pain of COVID
litigation.

“We initially thought that COVID would produce a lot of litigation, and it has,”
Prussack said. “People are alleging that they’ve been discriminated against.”

A wide range of COVID mandates and policies could lead to EPL lawsuits.

Employees may sue over vaccine mandates, mask mandates or return-to-office
policies if they feel they have disabilities that are not being accommodated
after months of proving they can work remotely.

Health care, manufacturing and retail organizations are seeing the most
lawsuits, but they can occur in any sector, Prussack said.

Underwriters are already eyeing these exposures, so it’s important for insureds
to be prepared to address what they’re doing to manage these risks before
renewal.

“You’ll see specific questions around COVID, around return-to-work practices,
and whether those practices or the protocols have been reviewed by an employment
attorney,” Prussack said.


2) WAGE TRANSPARENCY LAWS

A number of states and cities have passed wage transparency laws over the past
few years.

These laws require employers to be upfront about salary during the hiring
process and can be broken into two categories: those that require salary
disclosure upon request and those that require employers disclose it
proactively.

California was the first state to enact a wage transparency law in 2018, when it
passed a law requiring employers to provide a pay scale to external applicants,
upon request, if they had completed an initial interview for a job.

Maryland, and the cities Toledo and Cincinnati enacted similar laws soon after
and Washington state enacted an expanded law that requires employers to provide
a pay scale to internal and external applicants upon request.

In 2021, several more states enacted their own pay transparency laws, with
Colorado, Connecticut, Nevada and Rhode Island passing laws that require
employers to proactively disclose pay scales. Colorado’s law even requires
employers to post it in the job listing.

New York City is also putting a law on the books that requires employers to give
a pay scale range in every job posting.

These laws open employers up to the risk of discrimination lawsuits if, for
example, a woman finds out she is being paid less than a man for similar work.

“This will ultimately lead to more litigation as employees learn what their
value is at a company, and learn what people are being paid for similar work,”
Prussack said.


3) BIOMETRIC PRIVACY

Back in 2008, Illinois passed a law called the Biometric Information Privacy Act
(BIPA), which prohibits companies from collecting biometric data —like
fingerprints, iris scans or facial recognition — unless they obtain written
consent.

Since then, companies have been at increased risk of class-action lawsuits from
consumers — and potentially even from their own employees — alleging that they
collected biometric data without proper disclosures or without obtaining proper
consent.

Prussack said there have been about 1,000 lawsuits that have come out of
Illinois’ law alone, so far. Now other states are considering whether to pass
similar legislation.

“More and more states are considering similar laws with private rights of
action,” Prussack said.

The risk of lawsuits as biometric technology has proliferated is now so high
that many insurers are excluding it from their EPLI policies.

“With respect to those privacy regulations, like Illinois’ BIPA, exclusions for
that are quite common now across the industry,” Prussack said.

Employers can try to stay ahead of these risks by ensuring they are in
compliance with the laws in the most restrictive states. Right now, that means
ensuring they’re in compliance with Illinois’ law.

“It’s probably a good idea to try, regardless of where you’re headquartered or
where your employees are, to make sure you’re in adherence with more restrictive
laws,” Prussack said.


4) FEE CASES

On the fiduciary end, fee cases remain problematic for employers. In these class
action suits, plaintiffs allege that their 401(k), or in the case of nonprofits
403 (b), have been charged unnecessarily expensive fees.

“Those fees, the plaintiffs allege, cause employees to have less available in
their accounts for retirement,” Prussack said.

In the past, these lawsuits have focused on retirement plans with more than $1
billion in assets, but Prussack said that plaintiffs are going after
increasingly smaller plans. She’s seen suits targeting plans with less than $100
million in assets.

“They’re going after smaller and smaller plans,” Prussack said. “Now, the sweet
spot for the litigation seems to be in plans with $100 million in assets or
more, but just recently, a plan with less than $70 million in assets was sued.”


WHEN IT COMES TO INSURANCE PARTNERS, TRANSPARENCY IS KEY

Given these critical risks and a challenging fiduciary and employment liability
insurance market, it’s imperative that companies partner with a carrier that is
transparent about their policies and claims process.

Berkshire Hathaway Specialty Insurance prides itself on its transparency through
all stages of the claims process. The first step? Making sure insureds
understand their policy language. “We will freely discuss the policy and talk
about our intent in the language,” Prussack said.

This dedication stems from Berkshire Hathaway Specialty Insurance’s mission of
putting claims first. Their claims team will work with insureds every step of
the way to make sure they understand the process. Team members are constantly
meeting with customers to ensure a smooth process.

“Our motto is: ‘Claims is our product.’ And we really live that every day,”
Prussack said. “Our claims folks are always meeting with our customers. There’s
this high level of confidence and comfort with how we’re going to handle a
claim.”

For more information, please visit: https://bhspecialty.com/.





This article was produced by the R&I Brand Studio, a unit of the advertising
department of Risk & Insurance, in collaboration with Berkshire Hathaway
Specialty Insurance. The editorial staff of Risk & Insurance had no role in its
preparation.

The information contained herein is for general informational purposes only and
does not constitute an offer to sell or a solicitation of an offer to buy any
product or service. Any description set forth herein does not include all policy
terms, conditions and exclusions. Please refer to the actual policy for complete
details of coverage and exclusions.

Berkshire Hathaway Specialty Insurance (www.bhspecialty.com) provides commercial
property, casualty, healthcare professional liability, executive and
professional lines, surety, travel, programs, accident and health, medical stop
loss, and homeowners insurance. The actual and final terms of coverage for all
product lines may vary. It underwrites on the paper of Berkshire Hathaway's
National Indemnity group of insurance companies, which hold financial strength
ratings of A++ from AM Best and AA+ from Standard & Poor's.







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