bankruptcy chapter 11 wiki

bankruptcy chapter 11 wiki

5 Case Studies in Liability Disasters

It is to believe in human nature that no harm will ever come, or press close to home. Unfortunately, things go wrong from time to time. Because the unexpected is possible at any given time, it is important to have insurance, business insurance, liability insurance and professional indemnity possible for the best prevention. As the old saying goes: "Hope for the best but prepare for the worst."

It is worthwhile to property have, auto and life insurance for personal protection. On the business side, it is equally important for things such as personal accident, property, professional liability insurance have, and general liability insurance to protect the personal and financial assets of the company. Once these plans in insurance agency is the difference between success and bankruptcy. (http://techinsurance.com/coverage/liability_protection.aspx)

Unfortunately, it is often difficult, the importance of prevention with a plan in force until the disaster to realize. Many know that's important to cover, and yet, still not the right steps to getting it from an unforeseen disaster to protect. The following is a list of five case studies in which the lack of sufficient insurance, liability insurance or professional liability in paralyzing a company run. These case studies are you with the necessary information on how your business is at stake, without appropriate insurance coverage available. (http://techinsurance.com/coverage/liability_protection.aspx)

Federal-Mogul

Federal-Mogul is a large automotive parts manufacturer based in Southfield Michigan. In 2001 the company was under Chapter 11 bankruptcy, because it was the level of liability from asbestos claims by workers who came into contact with from file the substance when dealing with various automotive parts. A majority of these claims were for the liability of asbestos illness, cover including cancer.

Problems Federal-Mogul suffered were varied in terms of liability insurance. In reality, the Company purchased companies that already from liability as a result of asbestos-related claims.

The dilemma with Federal-Mogul was not that these companies do not have insurance, it was whether they had the right kind of liability insurance, and whether they could protect themselves from things such as professional liability. Federal-Mogul thought they were covered, but soon found that they are not.

Federal-Mogul was under the impression that they have a multifaceted strategy that might suggest to use in relation to asbestos liability claims. The plan was in the courts and lobbying Congress impact of changes in legislation fight liability claims. This approach did they lose in court.

In 2001, Federal-Mogul was forced to Chapter 11 bankruptcy claim. Fortunately, the bankruptcy actually helped the company financially to rebuild, and just runs down today. Oh, they had lost to avoid for their company and their reputation if they do not take a risk on their liability insurance and professional indemnity insurance policies. In fact, leaving things in danger, what the cost of the insurance companies in terms of time and time again. (http://articles.latimes.com/2005/aug/20/business/fi-rup20.6) (http://www.asbestosnetwork.com/news/nw_012908_asbestos_bankruptcy.htm)

Union Carbide (http://chronicle.com/news/article/4856/liability-concerns-spike-union-carbides-land-donation-to-west-virginia-u)

The Bhopal disaster is perhaps one of the most famous examples of corporate disaster. It serves as an excellent case study of the issues surrounding liability and professional indemnity insurance.

Back in 1984, a pesticide plant owned by a subsidiary of Union Carbide 40 tons of MIC gas released into the atmosphere, killing between 2500 and 5000. Some speculate that may have been the number of fatalities, even higher than reported.

Understandably, Union Carbide was still innumerable Losses due to liability claims from those injured and relatives of the deceased. Unfortunately, they do not have the right insurance to cover these losses. Millions have been in court spent by Union Carbide to fight some of the first legal disputes.

While the Bhopal incident is an excellent case study in liability and professional indemnity insurance Business text books around the world call it as an example of how to deal with issues of risk management. The correct assessment of the risk would be a have avoided such a monumental disaster.

Luckily for Union Carbide, they were able to settle all claims with the Indian government for a price of $ 470 million. Although the Union Carbide would have avoided the payment of 470 million U.S. dollars by entering into an appropriate strategy, liability insurance and risk management, they actually saved money by by the dispute process.

The Exxon Valdez (http://en.wikipedia.org/wiki/Exxon_Valdez_oil_spill)

Exxon Valdez is another case known corporate disaster dealing with the issues of liability and professional indemnity insurance. It provides a good example of why insurance it is important for executives and business professionals at all levels.

The Exxon Valdez was an oil freighter that a reef in Prince William Sound off the coast taken from Alaska. The huge oil spill cost Exxon ended more than U.S. $ 2.5 billion punitive damages to the people affected by the spill in the area. Some of the corresponding legal issues are being fought today, was taken after the first payment of 5 billion U.S. dollars to 2.5 billion U.S. dollars.

The Exxon Valdez disaster further explained the importance of both liability and risk management at senior level. Executives at Exxon Valdez face professional liability costs resulting from performed badly for making the liability of the company.

The Savings and Loan Crisis (http://en.wikipedia.org/wiki/Savings_and_Loan_crisis)

The late eighties and early nineties, one of the worst financial crises in American history, with a total of around 160 billion U.S. dollars. Accounting firms are still in litigation directly relates to the liability and professional indemnity insurance is the case, and it is another example of the seriousness of the right of the Insurance in force.

Savings and loan companies were in fact poorly regulated financial institutions from the 1800's. To the point, gave these companies lazy Loans, and were on the hook for billions of dollars in his pocket. Rather, the federal government have paid about 120 billion U.S. dollars in taxpayers' money simply to complement the seriousness of the situation.

Because they will face liability for not taking their savings and loans companies properly audited Yet to be sued accounting firms today.

The correct liability and professional indemnity insurance could have helped enormously the situation, but even simple risk management, competence, integrity, and could easily have avoided liability payments in the millions or billions of dollars.

The Enron scandal (http://en.wikipedia.org/wiki/Enron_scandal)

The Enron scandal is one of the youngest and most famous illustrations corporate giants go astray adjacent issues of liability and professional indemnity insurance. Similar how to stop for savings and loans crisis, the liability not only with Enron. Instead, the topics covered on companies affiliated with Enron.

Arthur Andersen Accounting firm was immortalized the responsibility for fraud at Enron, many investors and pension holders. Both Enron and Arthur Anderson were as responsible look for "books" and deceive the public about the state of their finances. Were top executives from both companies involved in the scandal.

Investment banks have yet to be sued today with investments in which Enron sold, further exposing the issues relating to liability and professional indemnity insurance. Undeniably, it is important for companies to deal at all levels of insurance in relation to the timely and accurate manner.

About the Author

About the Author:
James Cochran is the founder of Techinsurance. Since 1997, Techihsurance.com has been providing high quality professional liability insurance at a reasonable price to IT firms across the nation. They quickly became a leader in providing business liability insurance, and have since maintained their position as one of the top IT business insurance providers.

A bible study and interpretation of Daniel chapter 11:20+

Share and Enjoy:
  • Print
  • Digg
  • Sphinn
  • del.icio.us
  • Facebook
  • Mixx
  • Google Bookmarks
  • Blogplay

Leave a comment

Your comment