JANUARY 28, 2013 | Vol. 91, No. 2 WEst REGIoN Coverage QUEstIoNs: FoodboRNE Americans IllNEss doN’t CUt oN INsURANCE CoNFIE EYEs stANdARd lINEs niquely U Scottsdale We know you have a choice. That’s why at Scottsdale Insurance Company, we work to set ourselves apart from the rest with consistently profitable results, an A.M. Best rating of A+XV, and financial stability. Add to that a steadfast commitment to our customers and inspired leadership, and you have an experience that is uniquely mutual, uniquely strong, and uniquely Scottsdale. a Nationwide Insurance® company A.M. Best Rating of A+ XV (Superior) Scottsdale Insurance Company and design is a federally registered service mark of Scottsdale Insurance Company. and design is a federally registered Scottsdale Insurance Company www.scottsdaleins.com 2 | INSURANCE JOURNAL-WEST REGION January 28, 2013 www.insurancejournal.com SCOTT16327.indd 1 1/14/13 6:11 PM CEA_2013MVP_8.375x10.875_hi-res_011413.pdf 1 1/14/13 9:11 AM We help you get your name out. niquely You help us get our message out. Scottsdale Let the back-scratching begin! Working together, we’ll provide your U ® policyholders with the Strength to Rebuild after California’s next damaging earthquake. C CEA’s Marketing Value Program (MVP) offers FREE M marketing tools to help you connect with clients. Y CM Simply put, it’s back-scratching all around. MY • Get postage-paid direct mail printed with your CY name and address. CMY • Register early and get a FREE go-bag and K gas-valve shutoff wrench. • Send FREE preparedness starter kits to your We know you have a choice. That’s why at Scottsdale new CEA policyholders. Insurance Company, we work to set ourselves apart from • Distribute your direct mail with FREE statewide advertising support. the rest with consistently profitable results, an A.M. Best rating of A+XV, and financial stability. Add to that a steadfast commitment to The MVP helps CEA get its message out about earthquake insurance, and it helps your business our customers and inspired leadership, and you have an experience that in a way that says “I care.” is uniquely mutual, uniquely strong, and uniquely Scottsdale. All California-licensed agents employed or appointed by CEA’s participating insurance companies can join the MVP. Sign up today at EarthquakeAuthority.com/MVP a Nationwide Insurance® company A.M. Best Rating of A+ XV (Superior) Scottsdale Insurance Company and design is a federally registered service mark of Scottsdale Insurance Company. and design is a federally registered Scottsdale Insurance Company www.scottsdaleins.com www.insurancejournal.com January 28, 2013 INSURANCE JOURNAL-WEST REGION | 3 SCOTT16327.indd 1 1/14/13 6:11 PM CEAUT16333.indd 1 1/14/13 8:40 PM N18 WEST on the Cover special Report: Where to Find Inside This Issue Cyber Protection January 28, 2013 • Vol. 91, No. 2 • West Region 18 24 30 N8 NAtIoNAl CoVERAGE WEst CoVERAGE IdEA ExChANGE N12 Lucky or smart? Experts 8 Can California’s san Andreas N1 Growing Your Property Weigh-In on P/C Industry’s Break at once? study says Casualty Agency: shulman Sandy Impact Maybe N2 The Competitive Advantage: N12 Policyholder Education: 14 California Wholesalers Fret Burand Who’s Responsible? Over Upcoming legal decision N8 How brightway Insurance N18 special Report: Where to 16 Jones, CEA Pay heed to Changed Agency management Find Cyber Coverage Northridge Quake Anniversary Systems N22 Closer look: surplus lines 18 NoAA: 2012’s U.s. billion-dollar N80 Closing Quote: Wholesalers Regulatory Picture for 2013 Extreme Weather Events Must Aim for high hit Ratios ‘Impressive’ N26 E&o Insights: Key differences to Know in the E&s market 20 Confie Eyes more Expansion, Push Into standard lines N28 2013 National directory of Excess, surplus & specialty 24 DIR Gets ball Rolling on Markets, Vol. I California Workers’ Comp Reform 30 Foodborne Illness Cases Present Complex Coverage Questions dEPARtmENts 6 Opening Note 10 People 12 Declarations 12 Figures N6 MyNewMarkets 4 | INSURANCE JOURNAL-WEST REGION January 28, 2013 www.insurancejournal.com What’s so difficult about combining personal and commercial umbrella coverage? Not much. Bundle personal and commercial dwelling fire rentals, apartment buildings and lessors risk. Personal and commercial: they belong together. PersonalUmbrella.com. We do. Available nationally. Underwriting criteria varies by state. Visit us online for guidelines. www.insurancejournal.com January 28, 2013 INSURANCE JOURNAL-WESTCalifornia Insurance REGION License 0D08438 | 5 combiningcoverage-ij-1212.indd 1 11/19/12 10:40 AM WeST CoVERAGE EdITORIAl Editor-in-Chief Andrea Ortega-Wells | awells@insurancejournal Opening Note V.P. Content Andrew Simpson | [email protected] East Editor Young Ha | [email protected] southeast Editor Michael Adams | [email protected] south Central Editor/midwest Editor tech, tech, tech Stephanie K. Jones | [email protected] West Editor Don Jergler | [email protected] International Editor month down. The year is ticking away. And with the next Facebook, Charles E. Boyle | [email protected] senior Editor Google or Apple seemingly just around the corner, technology continues to Susanne Sclafane | [email protected] A ClaimsJournal.com Editor be on many a mind in 2013. Denise Johnson | [email protected] myNewmarkets.com Associate Editor In fact in a poll conducted on InsuranceJournal.com in January more than Amy O’Connor | [email protected] a third placed “Cyber Risk” as the top commercial lines area for which they Columnists Chris Burand, Curtis Pearsall, Alan Shulman would like to see property/casualty insurers develop better or new products in Contributing Writers Richard Brown, Richard Clarke, Maureen Caviston, Michael Miller 2013. sAlEs “Cyber Risk” handily beat “Habitational,” followed by “Restaurants/ V.P. sales & marketing Julie tinney (800) 897-9965 x148 [email protected] Bars/Taverns” in the poll. After those the order of popularity was: “Green West dena Kaplan (800) 897-9965 x115 [email protected] Commercial Property,” “Commercial Auto,” “Executive Liability,” “Other” and south Central mindy trammell (800) 897-9965 x149 “Marine.” [email protected] midwest lauren Knapp (800) 897-9965 x161 Only weeks into the new year and new technology, and risk, was already [email protected] southeast howard simkin (800) 897-9965 x162 being thrust upon us. [email protected] In mid-January Menlo East dave molchan (800) 897-9965 x145 ‘…a personal device strategy [email protected] Park, Calif.-based Facebook New markets sales manager Kristine Honey | [email protected] unveiled a search tool for in the workplace could face Classifieds, Jobs, Agencies Wanted/For sale (800) 897-9965 x125 Ly Nguyen | [email protected] people, photos, places and accidental disclosures due mARKEtING/NEW mEdIA interests. The new graph to loss of boundary between marketing Administrator search tool will appear at Gayle Wells | [email protected] work and personal data…’ Advertising Coordinator the top of the site, enabling, Erin Burns | [email protected] (619) 584-1100 x120 for example, Facebook New media Producer Bobbie Dodge | [email protected] members to search for local restaurants liked by their friends, or photos posted Videographer/Editor by contacts within a specific time frame, according to the Wall Street Journal. Matt Tolk | [email protected] dEsIGN/WEb The annual CES mega electronics show in Las Vegas wrapped up in the Vice President/design middle of the month and there was no shortage of new gadgets for people to get Guy Boccia | [email protected] Vice President/technology excited about. Joshua Carlson | [email protected] design and marketing Executive One of the most talked about was Corning’s Willow Glass, a thin, bendable Derence Walk | [email protected] Web developer glass that could radically alter the smartphone and tablet market. Initially it will Jeff Cardrant | [email protected] enable the development of more curved, or rounded gadgets, but Web developer Chris Thompson | [email protected] I’m holding out for a smartphone you can carry in your pocket IJ ACAdEmY oF INsURANCE then fold out for a bigger, better web experience. Other concepts director of Education Christopher J. Boggs | [email protected] introduced at the show: Eye-tracking technology for computers, online training Coordinator and a waterproof smart phone. Barbara Whiffen | [email protected] AdmINISTRAtIoN It’s a lot to chew on. Chairman Insurance industry professionals chew on this: According to Mark Wells Chief Executive officer the Security Forum the top five security threats that businesses Mitch Dunford Accounting manager can expect to face in 2013 include cyber security, supply chain Megan Sinclair | [email protected] security, big data, data security in the cloud and mobile devices FoR QUEstIoNs REGARdING sUbsCRIPtIoNs: in the workplace. The last one may be of particular interest with 855-814-9547 all these new devices rapidly making inroads in to our lives. Call: or you may subscribe or change your insurancejournal.com/subscribe Info Security magazine, which reported on the forum findings, writes that address online at: the bring-your-own-device (BYOD) phenomenon “will continue to keep security Insurance Journal, The National Property/Casualty Magazine (ISSN: 00204714)