Thursday, October 14, 2010

ERM-BC-COOP: When insurance isn't


An article I just read suggests to me that insurance policies should be read very carefully before signing on the bottom line.

The article, at, describes a sex discrimination suit against a school board.

Briefly, the plaintiffs threatened to go to court. The district's insurer apparently - the article lacked details - made a deal with the plaintiffs' attorney without consulting the board; the school board rejected the settlement. A judge ordered the school board to settle.

Now the interesting part.

Of the total settlement, the insurance company paid less than 30 percent of the award. The board also had to pay a $10,000 deductable toward the insurance company's lawyer fees; the deductable equates to a little less than 10 percent of the lawyers' bill.

The school district - that means its taxpayers - wound up paying more than 70% of the award despite having insurance.

Beside the fact that, to my mind at least, it is questionable for a third party (the insurer) to make an agreement sans permission from defendant (the insured), this article tells me that as an ERM practitioner, I need to encourage my clients to carefully examine their insurance coverage and the insurer's conditions.

I'm confident that the insurer acted according to its contract with the school district, but I might have a problem with whomever accepted the contract on behalf of the school district.

Insurance is one of the many ways available to mitigate or transfer risks. Most organizations have multiple policies. Insurance often is a big part of an organization's survival plans. It seems appropriate, then, that policies are scrutinized before the contract is inked and that the documents are reviewed regularly to assure the coverage still meets the organization's requirements.

ERM practitioners need not be insurance experts, but practitioners are remiss if they fail to at least encourage their clients to know and understand the coverages.

John Glenn
Enterprise Risk Management practitioner
Hollywood - Fort Lauderdale Florida

Wednesday, October 13, 2010



It may be a stretch to brand this post "ERM-BC-COOP," but then again . . .

Although I travel the country, I call south Florida "home."

One of the area's main sources of income is tourism. Tourists come from all over; not only the other 49 states and Canada, but from Europe, the Middle East, the Far East, and - although I've never met any from there - from "Down Under."

Right now - October 13 - we're into the last half of "Silly Season," a season that wraps up on November 2, the first Tuesday in November. Election Day.

Silly Season makes the tv stations, advertising, and PR folks rich and, frankly, begins to bore most permanent residents after they see the same commercial for this or that political hopeful for the 10th time.

What is bothersome this year is the amount of negative campaigning.

Negative campaigning is nothing new, but it seems that this year the tactic is especially bad.

We have several hotly contested races - one for U.S. Senate, one for Governor (no one ever hears about the gubernatorial candidate's choice for lieutenant governor), and several for the U.S. House.

If I was a visitor to my state and depended on the advertisements on tv, I'd be hard pressed to believe that there was an honest politician in the entire state.

Rather than tell us what the candidate will do for the state's citizens if elected, the candidates are telling us about their foe's pecados. (That's not entirely fair; we have one candidate who tells us that if elected he will make sure drug tests are administered to people on welfare . . . how the two - welfare and drugs - relate is beyond my ken and I find no favor with the ad.)

No matter who wins in November, Florida's reputation has been besmirched before the world.

What must visitors and potential visitors think of us? Are all of our elected officials scoundrels?

What impact will the negative campaigning have on tourism? How about businesses considering relocation to Florida. Or venture capitalists' opinions about investing in Florida-based organizations?

Ahh, the ERM-BC-COOP connection: Image.

Image is important to any individual's and any organization's success. A positive image can bring forgiveness for any number of "sins" while a negative image can damage a reputation for years to come.

The best "image protection" an organization can have is honesty and fairness; honesty and fairness with its clients/customers, with its personnel, and with the public in general.

That being written, a good ERM-BC-COOP plan will include ways to protect the image "in the event of," whatever the "of" may be. The "of" could be something as simple as a slip in stock price or the recall of a product.

Who addresses these issues? Who talks to which groups? Who assures that the stories are the same, even if targeted to different audiences and, consequently, with different words? Are generic scripts prepared with blanks for the specifics? Are these scripts vetted by senior management, legal, and any other appropriate persons.

I suspect that most politician in most places lean heavily on negative, "smear-the-opponent" campaigns. If my suspicions is correct, then maybe Florida's Silly Season will be viewed as PSOP - Politicians Standard Operating Procedure.

I really would prefer hearing what Joe and Jane Candidate will do FOR me and my fellow Floridians then hearing why the candidate's opponent is a liar, a crook, and a general disgrace to humanity.

I also would like visitors and prospective visitors to think my state is civilized and that people respect each other.

For all that, the sun still shines and the weather is warm here in southern Florida.

John Glenn
Enterprise Risk Management practitioner
Hollywood - Fort Lauderdale Florida

ERM-BC-COOP: Who you gon'na call?


I received an email from an acquaintance via the International Emergency Managers Association (IAEM) list the other day.

It was disturbing in several ways.

The email went as follows:

IAEM Discussion Group:

In this morning’s electronic issue of Federal Insider, I received an article that makes me want to pose the question: –

Suppose you report something suspicious or an actual emergency to your 911, your State Homeland Security Office, to several of DHS’ or the FBI’s hotlines and get referred to a number that doesn’t answer?

Link to the article: or

Here are some numbers for suspicious activity or criminal activity reporting:

  1. Any Emergency or Incident in Progress – 911

  2. If terror activity suspected - Local FBI Office: (contains a list of Offices, their sites and contact info). You can also report activity online, if you are near a computer or have a cell phone with a QWERTY keyboard at:

  3. Immigration/Customs Hotline: 1-866-347-2423

  4. To Report an Oil/Chemical Release – The National Response Center: 1-800-424-8802 or 1-877-24-WATCH
    PS: They also take terrorism reports.

  5. Suspicious Activity/Packages in or around a Federal Building: 1-877-4FPS-411 (1-877-437-7411).

  6. Chemical Facility Anti-Terrorism Standards Violation / Activity: 1-877 394-4347 (if incident has already occurred, 202-282-9201 (the National Infrastructure Coordination Center))

  7. Cybersecurity Incident: 1-888-282-0870 or

  8. Major Terror or Criminal Incident (FBI): Major Case Contact Center at 1-800-CALLFBI (225-5324);

  9. Disaster Relief Fraud: (866) 720-5721

  10. Lost or Missing Child: 1-800-THE-LOST

  11. Sexual Exploitation: 1-800-843-5678

The Washington Post story related an incident where someone repeatedly tried, and generally failed, to report a suspect suitcase.

What is the ERM-BC-COOP connection?

As practitioners we need to know that when we recommend that people call a central number to report a fire, medical alert, or other event, that the call will be answered by a live person who knows how to respond (e.g., call the fire department, medical assistance).

Most often, the phones are manned either by a front desk receptionist , a lobby guard, or security in an out-of-the-way office. Sometimes HR gets the duty.

WHO gets the call is not particularly critical.

What IS critical is that the phone is answered and the person taking the call knows how to handle it.

By extension, this means that there must be procedures in place to assure the phone always is answered - if someone takes a break for whatever reason, someone else must fill in.

It means that when the plan is exercised, making sure the phone is answered must be included in the script.

Maybe Federal phones can go unanswered - they should not, but according to the WashPost article they sometimes are "Ring - No Answer" - but unless the practitioner is developing a plan for a Federal agency, our concern is much more local - will the phone be answered if something happens in our facility or on our campus.

If our plan is for a tenant, we need to understand who is responsible for contacting external resources (police, fire, paramedics, etc.); if the responsibility falls on the host, then the host must be included in the exercise; the host is, after all, a vendor.

Maybe the Feds can brush off the incident, but we should learn from it and make certain it doesn't happen to us or our clients.

John Glenn
JohnGlennMBCI at gmail dot com
Hollywood - Fort Lauderdale Florida

Monday, October 11, 2010

Turning Risk From a Four-Letter Word Into a Value Proposition



According to Money Management Executive,"Managing risk now means a lot more, operationally, than just watching out for mistakes in the middle and back offices, in mismatching details of transactions."

"Which means effective risk management has to go beyond systems to manage all of these individually critical and complex concerns, said Michael Fay, a principal with Deloitte & Touche at the NICSA Risk Management Seminar in Boston."

For the complete article, see the URL at the top of this entry. Risk of a copyright enfringement prevents additional copy here.

John Glenn
Enterprise Risk Management practitioner
Hollywood-Fort Lauderdale FL