At the 2018 CLM/Business Insurance Retail, Restaurant and Hospitality conference a panel discussed emerging risks which will be impacting the industries now and into the future. The panel was:
- Lance Ewing – EVP Global Risk Management and Client Services, Cotton Holdings Inc.
- Ty Sheaks – Attorney, McCathern PLCC
- Cameron Shirley – Senior Director Risk Management, P.F. Chang’s
One of the biggest risk management concerns around emerging risks is whether there is insurance coverage available for that risks. An emerging risk is typically not fully understood which makes evaluating the risk from an insurance coverage standpoint extremely difficult.
Some of the key influences on emerging risks include:
- Legal environment
- Catastrophic events
Emerging risks are in many industries including:
- Public Entity
- Information Technology
Violence in the workplace is an emerging risk. Often times employer policies are outdated and have not kept up with the newer risks in this area. Workplace violence can take many forms including:
- Active shooter
- Terrorist attacks
- Aggravated assault
- Bullying including online
- Product tampering
- Sexual harassment
- Threats of physical harm
Autonomous vehicles are another emerging risk. Their systems have been hacked showing vulnerability for such attacks. One question is who owns the risk for these vehicles? Is it the vehicle owner, the manufacturer, the company that developed the technology, or all of the above? Insurance policies need to evolve and be developed to coverage these risks.
Drones are becoming more widespread in their use. People can fly drones just about anywhere with little to no training. Companies are looking at using drones for delivery of merchandise. There are concerns around privacy issues and potential for injuries from the use of drones. There are 41 states that currently regulate drones and there are also FAA laws.
Robotics has been around for years but their use is greatly expanding and it is expected they will replace millions of human jobs in the future. There is a hotel in Japan right now that is staffed entirely by robots. They check you in, clean your room, etc. It is anticipated that the use of robotics will continue to expand in the future. What risks are associated with this?
Pandemics and diseases can create exposures to your workers and your customers. Examples are Zika and legionnaires disease. How are these risks covered by insurance?
Wearable technology that you give to your employees or customers presents a variety of potential risk management concerns. What you do with this data, or do NOT do with this data can create exposures. There are many privacy concerns with this.
Natural disasters can be an emerging risks. When areas experience catastrophes they have never experienced before the response can be very challenging. You may not be prepared for all the potential risks associated with the disaster. It is important to understand all the different coverages associated with storm damage. There are often disputes on what is flood damage vs wind damage in hurricanes. Less than 20% of businesses in Houston impacted by floods actually had flood insurance because they did not feel they had potential exposure to such an event.