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SEPTEMBER 2022 FURTHERING THE HIGHEST STANDARDS OF CLAIMS AND LITIGATION MANAGEMENT Trends Shaping Liability Litigation Advice on Building Better Relationships Avoiding Medicaid Lien Danger Zones Peak Storm Season Have Legislative and Regulatory Reforms Prepared Us for a Better Future?rimkus.com• 800.580.3228 World-class. Global reach. WHEN THE UNEXPECTED HAPPENS, YOU NEED TO KNOW YOU HAVE QUESTIONS. WE PROVIDE ANSWERS. Numerous factors can lead to serious construction-site accidents, from inadequate worker training and safety procedures to faulty products and heavy equipment. Rimkus has decades of forensic experience investigating and evaluating injury accidents across the U.S. and in many foreign countries. Our construction experts and engineers conduct in-depth investigations to verify critical issues and can provide strategic solutions for recovery. If you’re facing a complex forensic challenge of any kind, count on us to uncover the facts.THECLM.ORG/MAGAZINE CLM MAGAZINE 3 CONTENTS CLM MAGAZINE SEPTEMBER 2022 18 PEAK STORM SEASON Have legislative and regulatory reforms prepared us for a better future? 26 BACK TO SCHOOL ON EPL AND CYBER Insuring educational institutions becomes a lesson in risk mitigation 30 TRENDS SHAPING LIABILITY LITIGATION Effective strategies to address rising costs and bigger awards 35 DO YOU KNOW LMI? Wondering what CLM’s Litigation Management Institute is all about? 36 CAREERS The evolution of insurance jobs 37 BETWEEN THE LINES Is technology creating gaps in insurance knowledge? 38 WEBINARS Achieving successful subrogation 39 EVENTS Upcoming events, chapter activities, and webinars 40 NATIONAL News and verdicts that affect you from across the country 42 VOICES Getting to know Seneca’s Derrick Mullen FEATURES 4 FRONT DESK Growth where you least expect it 6 EXPOSURE Distracted flying 8 TAKING THE BAIT Why commercial real estate tenant poaching could be the next property management E&O trend 10 NAVIGATING UNCHARTED TERRITORY How to avoid danger zones in the evolving landscape of Medicaid liens 12 BUILDING BETTER RELATIONSHIPS An attorney turned claims professional shares advice on how both sides can work more effectively together 14 FROM OUTSIDER TO INSIDER Why do I share my journey of personal acceptance? Because it leads to positive change COLUMNS AROUND THE CLM 18 26 8 10 35 424 CLM MAGAZINE SEPTEMBER 2022 VP OF CONTENT Eric Gilkey SENIOR MANAGING EDITOR Phil Gusman CONTRIBUTING EDITOR Fran Clark ART DIRECTOR/ PUBLISHING OPERATIONS MANAGER Jason T. Williams EDITORIAL QUESTIONS Eric Gilkey eric.gilkey@TheCLM.org CHIEF EXECUTIVE OFFICER Ronna Ruppelt VP PARTNERSHIPS Jeremy Campbell SENIOR SALES REPRESENTATIVE Bryan Pifer ACCOUNT EXECUTIVE Megan Josd ADVERTISING QUESTIONS Jeremy Campbell jeremy.campbell@TheCLM.org 513-377-7228 SEPTEMBER 2022 • ISSUE 9 • VOL. 6 REPRINTS For reprints and licensing please contact Jeremy Campbell at jeremy.campbell@TheCLM.org or 513-377-7228. CLM Magazine is published monthly and covers news and topics of interest to insurance claims, risk, and litigation management professionals. Copyright © 2022 by the CLM. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior written permission of the CLM. The views expressed in the articles are solely those of the authors or those interviewed and do not necessarily reflect the views or opinions of CLM or the companies in which the authors are employed. A publication of CAT season is upon us. Everyone in the insurance industry understands the devastating impacts of hurricanes and tropical storms, even ones categorized as minor. Unlike other areas of insurance, in claims, we experience first-hand the physical and emotional havoc they wreak. We speak to the homeowners who have lost all their family photos. We see the shock and confusion on the face of a young mother taking her children to a temporary shelter. We help people at their most vulnerable to rebuild and resume their lives. It’s a great responsibility that doesn’t get highlighted enough. To all you claims folks who may face extra workloads and longer hours this CAT season—hang in there. And thank you. Experts have been predicting that the 2022 Atlantic hurricane season will be well above average. I hope this forecast is wrong and the season remains quiet. Regardless of the outcome, preparation is the key to effectively managing the claims that will inevitably follow. Troy Stewart offers forward-thinking approaches FRONT DESK in his article “What Adjusters Need to Know at the Peak of Hurricane Season” on page 18. He addresses data, technology, and the customer experience. What really resonated with me is his notion that we must remain agile and open to change to remain competitive. This doesn’t just apply to claims professionals. Adopting a growth mindset—the belief that your skills, abilities, and outlook can change over time—is a future-ready skill that will put you in demand. As a lifelong learner, it’s a concept I wholeheartedly subscribe to. Humans do not have a finite amount of ability or intelligence. Scientific studies tell us that our brain’s neuroplasticity allows us to develop new skills, if we approach challenges with a growth mindset. That might be as formal as taking a class or as unassuming as brushing your teeth with your opposite hand or taking a different route to the market. Just remain open to the belief that you can change, and you’ll be amazed at the result. So what new experience are you going to try today? All the best – Ronna Ruppelt CEO ronna.ruppelt@TheCLM.org LinkedIn.com/in/ronnaruppelt Growth Where You Least Expect It 2022 AWARDS FOR PUBLICATION EXCELLENCE WINNER CLM (ISSN XXXX-XXXX) is published monthly 12 times a year by CLM, a member company of The Institutes, 2 South University Drive, Suite 100, Plantation, FL 33324. Application to mail at Periodical Postage Prices is Pending at Plantation, FL, and at additional mailing offices. Postmaster: Send address changes to CLM, 2 South University Drive, Suite 100, Plantation, FL 33324. Allow four weeks completion of changes. Advertising and editorial deadline is the first of each month preceding issue date.CATASTROPHE SERVICES For further information regarding our Catastrophe Services please contact: Always Where You Need Us Catastrophic events present unique challenges when it comes to loss handling. CIA can quickly mobilize and deploy a team of experienced adjusters to any location nationwide. These trained adjusters will handle your files swiftly, while not compromising estimate accuracy. Let the Custard CAT Division give you the competitive advantage this storm season. Jason Willis CATASTROPHE MANAGER jwillis@custard.com 678.304.3407 Michelle Antinucci NATIONAL PROPERTY BDM mantinucci@custard.com 407.792.8767 www.custard.com888.CUSTARD6 CLM MAGAZINE SEPTEMBER 2022 EXPOSURE DISTRACTED FLYING A pilot flying a small Cessna plane crashed into an Orlando, Fla., street minutes after taking off. According to media reports, the pilot admitted the flight was meant to be a short one, but he became distracted by fixing the radio and ran out of gas. No one, including the pilot, was seriously injured. PHOTO: FLORIDA HIGHWAY PATROL8 CLM MAGAZINE SEPTEMBER 2022 W ith the anticipation of companies encouraging return to office space this year, commercial real estate executives (CREs) have a reason to feel bullish. City ghost towns will once again be populated, even with hybrid models of working remaining commonplace as a way to retain talent. Commercial property management, as the connection between corporate tenants and building ownership, has become even more integral to luring occupants into rentable space. Seventy-five percent of CREs responding to a survey from the Deloitte Center for Financial Services, the results of which were included in the consultancy’s “2022 Commercial Real Estate Outlook,” said they expected a continued increase in deal volume in the U.S. Headwinds stemming from pandemic-related financial concerns including rent debt are anticipated, thus creating greater urgency to focus on attracting and retaining corporate tenants. CBRE’s “2021 U.S. Occupier Sentiment Survey” indicated that the average U.S. office employee will spend 24% less time working in the office, and that 87% of large companies Taking the Bait Why Commercial Real Estate Tenant Poaching Could Be the Next Property Management E&O Trend By Sarah Abrams PROFESSIONAL LIABILITY Sarah Abrams is head of professional liability claims at Bowhead Specialty Underwriters, Inc. sabrams@bowheadspecialty.comTHECLM.ORG/MAGAZINE CLM MAGAZINE 9 plan to adopt a hybrid work approach. Commercial pricing misalignment—or when prices in the commercial real estate market deviate from those implied by economic fundamentals—as a result of the pandemic do not appear to stem from excessive leverage buildup, but rather from a sharp drop in both operating revenues and the overall demand for commercial real estate, according to an article from the World Economic Forum entitled, “IMF: This Is the Impact of COVID-19 on Commercial Real Estate.” The shift to hybrid working environments will likely keep commercial property vacancy rates higher, thus increasing competition for tenants. Conflicts may arise, however, when building property management also owns commercial property in the same market. Because of the access property management has to highly sought-after corporate tenants, allegations of poaching are an emerging risk for property management errors and omissions carriers. When a property manager is not the same as the building owner but becomes the owner’s representative, loyalties may shift. Is it a breach of the property manager’s fiduciary duty owed to independent building ownership when an existing tenant leaves for commercial space owned by the property manager? The first look should be to the property management agreement entered into between the parties. That contract establishes fiduciary agency and the scope of services provided by the property management company, including collection of rents, oversight of maintenance, and handling of the leasing agreements. A standard of care, whether spelled out as part of the contract or that is acceptable in the marketplace, provides additional guidance to management. What is not contemplated is the common law fiduciary duty to the building owner not to markup or unjustly manage the financial transactions involved in day-to-day property management. If the needs of a commercial tenant have changed as a result of a labor market shift to hybrid, shouldn’t the tenant be permitted to make a move? Common with rent abatement of commercial leased spaces are lease agreements that lengthen the tenancy time commitment. Depending on the size and relationship of the corporate tenant, pursuit of lost rents by building ownership may not be advisable. What may happen, however, is that if property management appears to have been involved in the decision for the breaking of a commercial lease, allegations of breach of fiduciary duty may arise. Fuel is poured on the fire when the property manager is also a property owner competitor with the previous building ownership. Because commercial real estate is so relationship driven, the types of disputes anticipated may feel a little more personal. The anticipated result includes high monetary demands and, if not settled, protracted litigation to recover prospective damages. Property management errors and omissions policies respond to claims that stem from tenant losses, especially if the liability sits with the property manager. It is the same breach of fiduciary duty to fail to keep tenants by not maintaining premises as it is when a tenant leaves for a new space owned by the property manager. The optics, particularly where the property manager is profiting from a building owner’s loss, are not good. Certainly not for the property manager’s professional liability insurer. K The shift to hybrid working environments will likely keep commercial property vacancy rates higher, thus increasing competition for tenants. WE DEFEND TRUCKERS AND TRUCKING. TRUCKERS TRUST US. WE KNOW TRUCKING. 670 Albemarle Dr. Ste 1200 Shreveport, LA 71106 (318) 222-2426 Mark Perkins PERKINSFIRM.COM/RAPID-RESPONSENext >