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SEPTEMBER / OCTOBER 2026 The New Age of Risk Leveraging the Revolution Beyond the Angry Juror AI and Intellectual Property: Emerging Risks and Coverage Considerations Who Created It ? FURTHERING THE HIGHEST STANDARDS OF CLAIMS AND LITIGATION MANAGEMENT SEPTEMBER / OCTOBER 2026 DIGITAL EDITION SPONSORED BY:CUSTARD.COM888.CUSTARD Dale Thumann EVP, Director of National Transportation dthumann@custard.com Teresa Allen- Tignor VP, National Transportation Account Manager tallen-tignor@custard.com Handling Transportation Losses Since 1962. Field On-Scene Investigations |Cargo|Environmental Third Party Property Damage| Heavy Equipment Special Investigation UnitSEPTEMBER / OCTOBER 2026 The New Age of Risk Leveraging the Revolution Beyond the Angry Juror AI and Intellectual Property: Emerging Risks and Coverage Considerations Who Created It ? FURTHERING THE HIGHEST STANDARDS OF CLAIMS AND LITIGATION MANAGEMENTTurn legal bill review data into better litigation management. Legal e-billing gives organizations access to valuable data on legal spend. Datalytics-Defense® helps legal spend management teams put that data to work across firms, matters and portfolios. Datalytics-Defense® helps organizations: Gain visibility into legal spend across matters and firms Benchmark legal spend and identify meaningful trends Identify opportunities to improve litigation management Use data-driven insights to support strategic decision-making Bring greater insight to legal spend management. milliman.com/datalyticsTHECLM.ORG/MAGAZINE CLM MAGAZINE 5 CLM MAGAZINE SEPTEMBER / OCTOBER 2026 >>>CONTENTS 16 WHO CREATED IT? AI and Intellectual Property: Emerging Risks and Coverage Considerations 22 LEVERAGING THE REVOLUTION Personal Reflections on AI and the Legal Practice 32 BEYOND THE ANGRY JUROR What Really Drives Compensatory Damages 8 TURNING UP THE HEAT CMS Takes Enforcement Actions on Section 111 Reporting Compliance 10 MOVING BEYOND PUBLIC AI Reducing Risks Through Private Platforms 12 THE NEW AGE OF RISK Strategies for Building a Successful Risk Management Program 6 FRONT DESK A World at Risk 16 8 22 10 32 12 FEATURES COLUMNS SEPTEMBER / OCTOBER 2026 DIGITAL EDITION SPONSORED BY: 38 WEBINARS Breaking Burnout 39 EVENTS Upcoming Events and Chapter Activities 40 MEMBERSHIP NEWS Membership on the Move AROUND THE CLM6 CLM MAGAZINE SEPTEMBER / OCTOBER 2026 DIRECTOR OF CONTENT Phil Gusman ASSOCIATE EDITOR Angela Sabarese ASSISTANT EDITOR Fran Clark ART DIRECTOR/ PUBLISHING OPERATIONS MANAGER Jason T. Williams EDITORIAL QUESTIONS Phil Gusman phil.gusman@TheCLM.org PRESIDENT Susan Wisbey-Smith VP PARTNERSHIPS Jeremy Campbell SENIOR ACCOUNT EXECUTIVE Laurel Metz ACCOUNT EXECUTIVE Megan Josd ADVERTISING QUESTIONS Jeremy Campbell jeremy.campbell@TheCLM.org 513-377-7228 SEPTEMBER / OCTOBER • ISSUE 5 • VOL. 10 REPRINTS For reprints and licensing please contact Jeremy Campbell at jeremy.campbell@TheCLM.org or 513-377-7228. CLM Magazine is published bi-monthly and covers news and topics of interest to insurance claims, risk, and litigation management professionals. Copyright © 2026 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. I am writing this column shortly after returning home from CLM’s Construction Conference. Firstly, it was great to see the amazing members and fellows that make up our construction community. If you are at all involved in the twisty-turny, complex world of construction claims and litigation, you should attend this conference both for the connections you will make, and the knowledge and strategies you will gain from your peers. For the purposes of this column, though, I wanted to talk about a theme that was quite noticeable at this year’s conference: risk in a changing world. Whether in a premier session, one of the many roundtable discussions, or just conversations with attendees, discussions would often turn to data centers and the new risks they pose, commercial builders and how they are navigating new risks on jobsites, or artificial intelligence and how it is reshaping everything from risk to claims to litigation. This experience dovetails with our September/October issue of CLM Magazine, where the focus is on risk. Our feature, “Who Created It?” looks at intellectual property risks and the legal status of content created by artificial intelligence (AI) systems. While this landscape is uncertain and rapidly evolving, authors Mary-Ellen King and Jean-Marc Zimmerman, Lucosky Brookman LLP, do a great job breaking down coverage implications, court cases, uncertainties, and best practices. Meanwhile, our column, “The New Age of Risk,” takes a broader look at the modern world and how to manage the risks of moving both physical cargo and digital assets in a time of persisting geopolitical conflict and maritime risk, and tariff volatility. In this article, author Aarati Yadav, ARC Global Risk, offers seven strategies for a successful modern risk management program. Finally, our feature, “Leveraging the Revolution,” and our column, “Moving Beyond Public AI,” take on not external risks that the industry must manage, but rather the internal risks of using, or not using, AI. The industry is already playing catch-up in this area when compared to the wide use of AI among plaintiff attorneys. These articles outline both AI’s transformative possibilities for those who don’t resist its use, and touch upon how to avoid some of the high-profile embarrassments we’ve all seen in the news for those who leap into it without looking. This year’s Construction Conference and this issue of CLM Magazine hammer home what many are feeling: It’s a new world where both opportunities and risks are developing and evolving at an unprecedented pace. Making sense of it all requires not only staying informed, but also staying connected to each other. CLM’s membership includes those who are on the cutting edge of risk and technology, and they are willing to share their tips and experiences, and listen to yours. If you can, attend a CLM conference and join the conversation. By sticking together and communicating, we can leverage the opportunities while avoiding and managing the risks. Phil Gusman Director of Content phil.gusman@theclm.org A World at Risk FRONT DESK >>>2026/27 CONFERENCES & EVENTS CHAPTER EVENTS HAPPEN YEAR-ROUND. LEARN MORE: TheCLM.org/events Sponsorship: Sponsorship@TheCLM.org Speaking: Programming@TheCLM.org DATES, LOCATIONS, TOPICS, AND EVENT NAMES SUBJECT TO CHANGE. REV.10012026 DATE CONFERENCE/EVENT LOCATION LITIGATION MANAGEMENT WEEK DECEMBER 2 Women’s Summit CHICAGO DECEMBER 3 Focus Conference & Holiday Party CHICAGO • Alternative Dispute Resolution • Extra-Contractual • Insurance Coverage • Insurance Fraud • Claims & Litigation Management JANUARY-APRIL Leadership Accelerator VIRTUAL + ANNUAL CONFERENCE MARCH 31-APRIL 2 Annual Conference SAN DIEGO MAY 18-19 Work Comp Conference NASHVILLE MAY 20-21 Focus Conference NASHVILLE • Insurance Fraud • Property • Subrogation • Transportation • Claims & Litigation Management SEPTEMBER 8 CCO Summit (invite only) DALLAS SEPTEMBER 8-10 Claims College DALLAS SEPTEMBER 22-24 Construction Conference AUSTIN OCTOBER 12-13 Litigation Management Symposium CHICAGO OCTOBER 13-16 Litigation Management Institute CHICAGO DECEMBER 8 Women’s Summit CHICAGO DECEMBER 9 Focus Conference & Holiday Party CHICAGO • Alternative Dispute Resolution • Extra-Contractual • Insurance Coverage • Cyber, Management & Professional Liability • Claims & Litigation Management 2027 CONFERENCES & EVENTS8 CLM MAGAZINE SEPTEMBER / OCTOBER 2026 Justin Romine is vice president, global claims at Marriott International. justin.romine@marriott.com Heather Sanderson is CEO of Sanderson Firm PLLC. heather@sandersoncomp.com. I magine receiving a notice from Centers for Medicare & Medicaid Services (CMS) questioning whether your organization reported a Medicare-related claim on time. Could your organization reconstruct the decision, produce supporting documentation, identify who owned each step, and demonstrate that effective controls are in place? For many claims organizations, the answer may be uncertain. As CMS moves to active Section 111 enforcement, reporting deficiencies that once seemed administrative can now reveal broader weaknesses in governance and enterprise risk management. For years, Section 111 Medicare Secondary Payer (MSP) reporting has largely been viewed as a compliance obligation supported by education and technical guidance from CMS. For those unfamiliar, Section 111 reporting is a federal reporting requirement under the MSP Act that requires Non-Group Health Plan (NGHP) Responsible Reporting Entities (RREs)—including workers’ compensation insurers, liability insurers, no-fault insurers, and self-insured entities—to electronically report certain claims involving Medicare beneficiaries to CMS. CMS uses this information to ensure Medicare pays for medical expenses only when appropriate, to identify situations where another payer has primary payment responsibility, and to facilitate recovery of conditional payments when Medicare has paid expenses that should have been covered by the NGHP. While reporting requirements have always carried the potential for enforcement, CMS historically focused on helping RREs improve their reporting processes rather than penalizing reporting mistakes. That approach is beginning to change. In 2026, CMS took a significant step by conducting its first-ever Civil Money Penalty (CMP) compliance audit of an NGHP Responsible Reporting Entity. Shortly after that audit concluded, it appears CMS issued at least one CMP notice involving allegations of untimely Section 111 reporting. Although CMS has not publicly identified the Turning Up the Heat CMS Takes Enforcement Actions on Section 111 Reporting Compliance By Justin Romine and Heather Sanderson WORKERS’ COMPENSATION >>>THECLM.ORG/MAGAZINE CLM MAGAZINE 9 organization involved, the message to the industry is clear: Section 111 reporting has entered an era where enforcement is no longer theoretical. CMS is now conducting its second quarterly CMP audit, and additional enforcement notices may soon follow. While the number of audits and penalty notices remains relatively small, the significance lies less in the volume than in the precedent being established. CMS has demonstrated that it is prepared to use the enforcement authority Congress provided, and organizations should expect that oversight will continue to increase. For insurers, self-insured organizations, third-party administrators, and claims professionals, this shift should prompt a fresh look at Section 111 compliance programs. ENFORCEMENT DOES NOT NECESSARILY MEAN PUNISHMENT The recent enforcement activity has understandably generated concern throughout the claims industry. However, CMS has also been careful to clarify that a CMP notice should not automatically be viewed as the beginning of a punitive action. Agency representatives have explained that the notice process is intended to create an opportunity for dialogue. Organizations receiving a notice can respond, explain the circumstances surrounding the alleged reporting deficiency, and demonstrate the compliance efforts already in place. In other words, CMS appears interested in understanding why a reporting issue occurred before determining whether penalties are ultimately warranted. That distinction is important. WHAT CLAIMS ORGANIZATIONS SHOULD BE DOING NOW Top performing claims organizations regard Section 111 reporting as a core element of enterprise risk management rather than administrative function. The current enforcement environment provides an excellent opportunity to evaluate existing Section 111 compliance efforts to determine whether they can withstand an audit and confidently prove that every reportable claim was compliant. Many reporting issues are not caused by a misunderstanding of the law. The greatest exposure often stems not from intentional non- compliance, but from breakdowns in processes such as inaccurate claimant data, missed Medicare beneficiary identification, delayed Ongoing Responsibility for Medicals (ORM) or Total Payment Obligation to Claimant (TPOC) reporting, and insufficient documentation of compliance efforts. Organizations must be able to demonstrate not only that reportable events were submitted, but that they were accepted by CMS and supported by defensible records. Thoughtful claims leaders are partnering with their MSP partners to conduct proactive Section 111 audits. These audits should focus on data quality and the coordination of various hand-offs between claims teams, systems administrators, and vendors to identify potential weaknesses before CMS does. Internal policies and procedures should be reviewed regularly to ensure they reflect current CMS guidance and operational realities. Ongoing training is equally important, particularly as reporting personnel change roles and CMS continues refining its expectations. Identifying subject matter experts within your organization who have a passion for Medicare compliance should be leveraged to stay ahead of new developments, train others, and participate in the audit process. Executive oversight also matters. Organizations should be able to demonstrate that reporting responsibilities are clearly assigned, quality assurance measures are in place, reporting errors are investigated, and corrective actions are documented. These governance measures not only improve reporting quality but also help establish the good-faith compliance efforts that CMS has repeatedly indicated it wants to see. LOOKING AHEAD The first CMP audit marks more than an isolated enforcement action, it represents a turning point in the evolution of Section 111 reporting. CMS appears to be taking a measured approach, balancing education with accountability. The agency has made clear that it wants organizations to succeed, but it has also demonstrated that reporting obligations will no longer rely solely on voluntary compliance. For claims organizations, the takeaway is straightforward. Section 111 reporting should be viewed as a core compliance function deserving the same level of attention as claims handling, data security, or regulatory reporting. Organizations that proactively strengthen their compliance programs today will be far better positioned to navigate increasing regulatory scrutiny tomorrow. As CMS continues expanding its audit activities, the best prepared organizations will be those that have invested in strong internal controls, regular compliance reviews, comprehensive training, and a culture that treats accurate Section 111 reporting as an enterprise-wide responsibility, not simply another claims administration task. K In 2026, CMS took a significant step by conducting its first-ever Civil Money Penalty (CMP) compliance audit of a Non-Group Health Plan (NGHP) Responsible Reporting Entity.Next >