google.com, pub-6663105814926378, DIRECT, f08c47fec0942fa0 Around the World JM: 2020-05-31


7 Things We Don't Know About the Ocean

Humans have done a pretty good job of exploring the Earth thus far, climbing mountains and crossing continents and planting our flags all over the place in the name of science. But one part of the world that has remained pretty mysterious to us also happens to cover more than 70% of its surface: the ocean. Yes , we’ve sailed across it plenty of times. And drilled for oil in it. And managed to create reality shows about fishing in it. But, from glowing oceans to massive deep-sea creatures, and underwater ecosystems with thousands of undiscovered, basically-alien species -- we still have a lot to learn about it. Probably more than any place on Earth, the ocean is full of fascinating stuff that we just don’t know. Not yet.



1. What’s the ocean floor like
Fact is, we still don’t know exactly what the ocean floor looks like in most places. The National Oceanic and Atmospheric Administration says that 95% of the ocean's bottom remains unseen by humans. As a result, we have a way better picture of the surfaces of other planets than we do of most of the seafloor. In 2014, a team of scientists created a map of the seafloor using data from satellites equipped with special sensors called radar altimeters. These instruments could precisely measure the distance from the satellite to the surface of the ocean below. Essentially, any large mountains or canyons on the ocean floor have a slight gravitational effect on the ocean surface, creating bumps and dips,  respectively.

These variations are of course too subtle to be detected by human eyes, but they can be measured by these ultra-precise satellite altimeters -- and, after adjusting for the effect of waves and tides, tell scientists what’s on the seafloor. This map spans the entire ocean floor, which is awesome, and we’re all glad that it exists, but it only has a resolution of about 5 kilometers, which is pretty low. By comparison, most of the surface of Mars, Venus, and the Moon have been mapped to resolutions of 100 meters or less. So, if we want to know what’s going on down there and really explore the ocean, detecting life, specific mineral formations, or wrecks, we’re gonna need a better map.

2. What’s under the seafloor
OK, probably thinking that you know what’s down there: rock. Yes. But not just rock. In 2015, scientists reported that they had drilled down about 2 and a half kilometers below the seafloor off the coast of Japan, and discovered living microbes. There were only about 10 to 10,000 microorganisms in a cubic centimeter of sediment that they studied, compared to like billions that you’d find in the same amount of dirt from your garden.

But still: There's life down there, even in the intense heat and pressure many kilometers below where the ocean stops. And the genomes of these under-sea microbes showed that they were actually more similar to the kind you’d find in forest soil, rather than the ones in seafloor sediments. So it’s possible that these microbes are descendants of terrestrial ones from 20 million years ago, that just adapted when their habitat began to get buried way beneath the ocean. So, who knows what other kinds of life could exist in deep marine sediments, or what they could tell us about what life on Earth used to be like?

3.Brine pools
We’ve all seen lakes and rivers on land, but what about lakes that are … underwater? Sounds a little bit unreal, like maybe it’s from a Sponge Bob episode but these features actually exist -- pockets of seawater that have a different composition than the surrounding ocean: because they’re super salty. They’re known as brine pools, and they seem to have formed when layers of salt from evaporated oceans millions of years ago got buried under layers of sediment. Seawater can reach these deposits and mix with the salt, forming a dense brine that flows out of the seafloor, sometimes filled with oils or methane gas. Some brine pools, like those found deep in the Gulf of Mexico, are four times as salty as the ocean water around it.

And the brine is so dense that submersibles can even “float” on top of it, like a boat on a lake. All of this salt makes brine pools lethal to larger animals. But colonies of halophilic -- or salt-loving -- microorganisms can flourish there, usually in much higher concentrations than the nearby normal seawater. Some pools are even lined with mussels that have symbiotic bacteria in their gills, which use the methane in the brine to make energy for the mussels. But there’s a ton that we don’t know about these weird underwater salt lakes -- like how brine pools can be so different from each other -- and why some have mussels and others don’t -- and even how many there are!



4. Milky seas
Also known as mareel, this is a phenomenon in which thousands of square kilometers of the ocean’s surface glow a brilliant whitish-blue. It lasts for such a short time, and there have been so few recorded sightings, that these glowing seas were thought to be a myth made up by crazy sailors…… until 2005 -- when a group of researchers was studying satellite pictures of a swath of the Indian Ocean from 1995. These pictures showed an area of about 15,000 kilometers-square, around the size of Connecticut, glowing for 3 nights. It was the first scientific evidence of the phenomenon, but the glowing waters are still not very well understood.

Some have suggested that the glow is caused by a mass of tiny dinoflagellates called Noctiluca scintillans known as “sea sparkles” for the way they glow when disturbed. These protists are what cause the picturesque glittering waves along coastlines in some parts of the world. But the 2005 study found that it was “unlikely, if not impossible” that the short-lived glowing of dinoflagellates was what scientists had been seeing from space. The prevailing theory these days is that milky seas are caused by massive colonies of bioluminescent bacteria that are growing on top of an algal bloom. But we’re still not sure how or why these ephemeral masses of bacteria gather, glow, and disappear.

5. The 52 hertz whale
You’d think we would know a lot about whales. I mean, they’re big, and we have their skeletons, and we can observe their migratory patterns. But one thing we still have a lot more to learn about is their songs -- from why some whales make them, to how an animal without vocal cords … or lips … manages to make song-like sounds. And then there’s this question -- what whale is producing the 52 hertz song, and why? This whale song was first noted by a technician on December 7th, 1992 in the Northeast Pacific Ocean. It sounded like a blue whale, but blue whale cries usually are somewhere between 15 and 20 hertz in pitch.

So, blue whales in the Pacific typically sound like this: [Blue Whale Cry Playing] But this whale song, played at the same speed, sounded like this: [52 Hertz Song Playing] This high-pitch noise seemed to be unique to one animal -- a whale that became known as 52 Blue. This raises a lot of questions, and we have to know more about whales to be able to answer some of them, like, why does this one whale sound different? And can others even hear it? And if they can hear it, do they understand? Some people latched onto to the idea that 52 Blue is a lonely whale crying out to others that might not hear it or wouldn’t call back.

But several scientists have rejected this lonely narrative, and think that other whales may be able to understand its call, even if they can’t make that call themselves. Also, 52 blue seems to migrate independently from any other whales. But its migratory patterns do look kind of like those of blue whales -- scientists have been tracking it up and down the North Pacific from Alaska to Mexico for years now. So some researchers think it might have some malformation that has  changed how it sings, or maybe it’s even a hybrid between a blue whale and another species. Whether or not it’s a lonely whale, 52 Blue is an oddity that people seem to love.

6. Upsweep
Now, ocean sounds are practically their own field of study, NOAA has been monitoring acoustics in the ocean for decades now. Instead of microphones, which are used to collect sound in air, NOAA uses hydrophones to record underwater sounds. Mostly, these hydrophones are used to listen to the ambient sound of the ocean, to see how humans might interfere with it, and to listen for things like earthquakes and whale calls. And sometimes, they record things that are hard to explain, at least for a while. In 1997, for example, there was what was known as The Bloop, an extremely loud, low-frequency sound heard by hydrophones some 5,000 kilometers apart.

Oceanographers recently determined that it was the result of an icequake -- the cracking and collapse of glaciers into the ocean, in this case on the coast of Antarctica. But there’s another mystery sound from the ocean, known as  Upsweep. Recorded in August 1991, it sounds like a repeating “boop” that picks up at the end -- sweeping up -- kind of like the “red alert” sound effect you hear on spaceships in sci-fi movies. But instead of trying to describe it, I could just play it for you. Since 1991, this sound has been heard regularly in the Pacific Ocean, and it seems to be seasonal, usually becoming more common in spring and fall. Researchers have tracked the sound to a part of the Pacific that has lots of volcanic and seismic activity, which seem to be important clues. But according to NOAA, “the origin of the sound is unresolved.”



7. Why are deep-sea creatures so huge
From the Kraken to sea dragons, all of our favorite mythical sea monsters are gigantic. And the fact is, in real life, many deep-sea creatures are unusually huge. This phenomenon is called deep-sea gigantism. But what drives it is … you guessed it! … unknown! In the deep sea, and especially near the polar oceans, some animals seem to get really huge -- like colossal squids, giant isopods, and Japanese spider crabs. Scientists aren’t sure why, but they do have some guesses. There’s Bergmann’s Rule, for example, which suggests that temperature may influence gigantism.

This might be because larger animals have less surface area relative to volume, so they radiate less heat based on their mass and stay warmer in colder climates. And then there’s Klieber’s Law, which states that more massive animals generally have lower metabolic rates -- and therefore need less high-quality food --- to survive. Still other theories suggest that gigantism may help organisms resist increased pressure of the deep sea. But we don’t really have conclusive biological reasons why these giant creatures exist. So, the ocean is just full o’ mysteries, maybe because it’s so huge and dark and deep.

But just so you know that we’re not hyping you -- we’re not saying that these 7 topics are things that Science Can’t Explain. Instead, you should just think of them as reminders of how much we still have to learn about the ocean. As our technology improves, and our access to the ocean takes us to new depths, we’ll be able to see and hear and sample more stuff than we ever have before. So in time, these puzzles will be solved, and new creatures will be discovered, and our understanding of our planet, and the life on it, will be that much … deeper.

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Top 5 Chainsaws in Gaming

Chainsaws are not only handy for cutting down trees and stray foliage; they also double up as a method of self-defence when things get hairy. Turns out that happens in a lot in videogames, and there have been plenty of times when we’ve been happy to have a trusty gas-powered cutting implement at our side. Here are a few of our favourites.



1. LOLLIPOP CHAINSAW
You’d expect a game with ‘chainsaw’ in the damn name to revolve heavily around chainsaws, and you’d be correct. Cheerleader and zombie hunter Juliet Starling kicks undead ass with her sparkly double chainsaw of death, sending limbs and heads flying with her energetic dance moves. Yeah, it’s a weird game. The zombie apocalypse has never been so fabulous.

2. EVIL DEAD
There have been a few Evil Dead games over the years – our favourite probably being Hail To The King on PSone. Ash is just perfect as a videogame character. This is a guy so badass that he cut off his evil hand and replaced it with… oh yeah, a chainsaw. Is anything better than playing as the guy who invented chainsaw arms?

3. DOOM 3: BFG EDITION
Doom has had a long love affair with chainsaws, and Doom 3’s incarnation did not disappoint. Arriving at the point of the game where you transition from scared survivor to ass-kicking avenger, it feels mighty fine to get up close and personal with some demon guts via your new best friend. Hell ain’t got nothing on noisy gardening equipment.



4. GRAND THEFT AUTO: VICE CITY
Vice City is one big love letter to the Eighties. Remember that scene in Scarface where the remains of a chainsaw murder are found in a bathroom? Vice City contains not only the bathroom, but the chainsaw too, for Tommy Vercetti to  wield as he sees fit. This normally involves running down the road with it, cackling like an utter lunatic.

5. RESIDENT EVIL 4
You might not be the one using the chainsaw in Resi 4, but it’s still plenty memorable. If you’ve played it, you’ll know exactly what we mean. That dude with the bag on his head – if he gets too close, it’s bad times ahead for Leon S Kennedy. Resi has always had some nasty deaths, but this takes the cake. You are dead!

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Bargains in Business Insurance

Talk to representatives of the insurance industry these days and you are likely to be struck by one overriding theme: They want your business. More precisely, they want to insure your business. And they are very eager. As a result, competition is keen, prices are low, benefits are substantial, and service is the name of the game.

It is, in short, a buyer's market, and that translates into a special message for small-business owners: This is an excellent time to reassess your company's insurance needs and the kinds of added coverage that may be worth buying. It's also a good time to shop around, insurance experts say. Independent agents and carriers across the country stand ready to help you evaluate your insurable risks and go over the latest packages of property-casualty protection for small and midsize businesses.



"We're in a unique time," says Charles D. McCabe, president of McCabe Insurance, a small, independent agency in Columbia, Md. "The commercial-insurance business is typically in a soft market and then a hard market in cycles of seven to 10 years. Bu: we've been in a soft cycle for close to 20 years now."

Much of that appears to be a function of the nation's unusually strong economy. McCabe observes that many insurance companies, with good results from their own investments, can show respectable profits "even if they are losing money on the underwriting side." "It causes them to be very competitive in pricing commercial insurance because they want to get the dollars in so they can invest them," he says.

At the same time, McCabe sees some of the pricing as irresponsible. He tells of an instance in which a major insurer was able to "steal" a competitor's customer by offering a premium that was less than half what the business had been paying—even though the account had recently sustained losses amounting to nearly twice the price of the new policy. "How could they do this?" McCabe asks with a tinge of anger. Presumably, he says, the newly chosen carrier was counting on minimizing new losses and offsetting the premium reduction with investment gains.

Change May Be Coming
If it all sounds like an opportunity for small businesses to obtain maximum coverage at low prices—and many experts say that is exactly what it is—businesses also need to be on guard. Insurance representatives acknowledge a growing sense within the industry that prices have been too low for too long, and that they could well move up again soon. If the economic boom begins to wane, insurance coverage is almost certain to become more expensive. (Hint: If you delay, that new policy or rider you've been thinking about may no longer be the bargain it is today.) But for the moment, at least, it's no wonder that property-casualty insurers remain in a highly competitive mode. For one thing, their net income fell by nearly onesixth in 1998, according to the National Association of Independent Insurers in Des Plaines, HI., and in the first quarter of 1999 they were rocked by huge disaster claims.

Perhaps more significantly, a recent study for the Independent Insurance Agents of America (IIAA) found what the Alexandria, Va.-based organization termed a "remarkably high" willingness among small businesses to desert their insurers for a lower premium. Jeff Yates, the group's CEO for industry and state relations, says that means agents will need to keep scrambling—with an emphasis on broader service. "Agents who think they need to only sell traditional property-casualty products are running a very big risk of losing these customers to a competitor," says Yates. A.M. Best, a company based in Oldwick, N.J., that rates insurers and publishes insurance data, forecasts an enormous consolidation in the industry over the next several years. Best says that as many as one-third of the nation's 1,100 propertycasualty groups will bite the dust or be absorbed by stronger companies.

Watching For Danger Signs
But small businesses may need to pay attention to some red flags, too. The same prosperity that has spurred price competition in commercial insurance has tended to put more and more small businesses at risk for losses they haven't anticipated, says Patricia Borowski, vice president for research and technical affairs at the National Association of Professional Insurance Agents, also in Alexandria.

For many small firms, she explains, good times have meant growth and expansion into new areas without adequate attention to insurance needs. "Because the economy is going well, people are getting involved in more and more things—and forgetting more and more" about insurance, Borowski says. But business owners "really need to be conscious that every time they take that step [toward expansion], they need to go back to their insurance agent and say, 'Do we need an endorsement?'"

Instead, Borowski says, with companies' activities "running way ahead of their original policies," by the time they discover the gap it may be too late. A case in point is the growing practice of sending employees abroad for international conferences and on other missions. What are the implications for workers' compensation and product-liability claims? Borowski says that if you aren't sure whether your company is adequately covered for such losses outside the United States, or even outside your own state, you should ask your insurance agent.

Additional Risks
Many small businesses also are increasingly vulnerable to lawsuits over alleged race or age discrimination, sexual harassment, or wrongful termination. Defense costs alone in these cases can be devastating—not to mention adverse judgments, which can put a company out of business. "Legal fees will kill you just to prove you are innocent," says Sharon Emek, president of Metro Partners, Inc., an insuranceagency group in New York City.

Rob Schueler, employee-practices product manager at Travelers Property Casualty Corp. in Hartford, Conn., puts it this way: "If you're hiring or firing or promoting or not promoting employees, you have an exposure." Another problem stems from the rapid expansion of home-based businesses. Borowski says the insurance industry itself was slow to respond to the burgeoning growth of this sector of the economy, so it has often been difficult for home-based businesses to obtain appropriate coverage.

A new IIAA survey indicates that at least 60 percent of in-home business owners are not adequately insured for business risks. Suppose, for example, that a room in the business owner's house is being used as an office, and the family dog runs in and bites a client on the ankle. Who's the culprit? "Is it the homeowner's Fido or a home-based business pooch?" Borowski asks. The answer can be crucial. The bottom line: Check your policy before the dog bites.

A Cooperative Spirit
Insurance agents, meanwhile, are so hungry for small-business action that they typically are more than happy to respond to inquiries from prospective customers—and to provide guidance on how to improve safety, reduce risks, and supplement coverage. Agents also are looking aggressively for new ways to appeal to small-business owners. For example, they are  trying to package different types of insurance, such as life and health coverage,  qwedfhnmwith property-casualty policies.

And they are becoming more sensitive to the cash-flow concerns of small companies by offering to structure premium schedules according to when companies are in the best position to make payments, reports Madelyn Flannagan, the IIAA's director of research and information.

Much insurance advice remains available on a direct one-on-one basis, with individual agents and insurance advisers offering free, no-obligation consultations at your place of business. But at the same time, business owners also can tap an increasingly rich store of insurance information over the Internet.

In addition, advances in technology and computer software are improving insurers' ability to tailor commercial policies to the needs of particular segments of the smallbusiness community, says Ruth Gastel, vice president for issues analysis at the Insurance Information Institute, a national organization in New York City that is supported by about 275 property-casualty and reinsurance companies.



In the past, she says, property-casualty policies were written primarily for everyday Main Street companies. Now, however, technology is giving underwriters "greater ability to look at the parameters of the losses of different kinds of businesses" and thus to create policies that are appropriate for specific types of companies. Patrick J. Kinney, a sales-and-marketing vice president at Travelers Property Casualty, says insurance agents used to try to write distinct policies for each individual business—a demanding and expensive task.

"We were not recognizing the fact that a florist is a florist," he says, and that most florists have common characteristics, such as a store with a certain square footage, a refrigeration unit, and, of course, flowers. In other words, they all have "exposures that are pretty generic."

With the help of technology, that insight led to "groupable" insurance programs for different types of businesses. Says Kinney: "We write 500,000 accounts a year, and you t can't customize every one of them. You have to mass-produce them." Douglas C. Elliot, senior vice president for select accounts/commercial lines at Travelers, adds that technology has become "a huge part of the equation that has enabled us to provide a much more cost-effective process."

Previously, Elliot notes, the process included faxing a customer's application to an underwriter, who would respond with a quote. If the deal was accepted, the information would be sent to a service center, which eventually would generate a policy. Today, in contrast, a single agent can rate, quote, and issue a policy in 15 minutes from a desktop computer.

Use of the Internet is contributing to the perception of an industry in flux. Not only is there a deluge of information about insurance on the World Wide Web, but some insurers have begun to sell policies electronically. Customer service, meanwhile, is expected to improve markedly as more and more business owners begin tapping the Web for answers to queries about their coverage, claims, and risk management. Gastel of the Insurance Information Institute says the changes mean that customers will find themselves more and more "in control."

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Market-neutral Funds May Offer Solace if Stocks Tank

Market-neutral mutual funds seemed like a great idea. Based on a novel I investment strategy that had produced steady profits for institutional investors over the past decade, they were marketed as a way for ordinary investors to earn money whether the stock market was going up or down.

The reality has been quite different. The few market-neutral funds introduced over the past 18 months have gotten off to a fitful start, often losing money while the stock market has roared to new highs. "We were obviously disappointed by our first-year results, and in fact we're not off to a good start this year, either," acknowledges Will Jump, director of market-neutral strategies for AXA Rosenberg Investment Management, which launched its Barr Rosenberg Market Neutral Fund in December 1997. "Nonetheless, we remain confident that our strategy is sound and that it will add value going forward." It would be tempting to dismiss Jump's optimism if it weren't for the fact that AXA has been successful in its marketneutral strategy for most of the past decade. During the nine years ended Dec. 31, 1998, for example, its market-neutral accounts for institutional investors posted gains in 32 out of 36 quarters. The Standard & Poor's 500-stock index, by comparison, turned a profit in 29 quarters.



Going Up ...And Down
That sort of consistency is one of the great attractions of market-neutral funds. It's achieved through a strategy that involves simultaneously buying stocks expected to go up in price and "selling short" those expected to go down.

In a short sale, a fund borrows stock from a broker and immediately sells it at the prevailing market price. Later, it buys back those shares—hopefully at a lower price—and returns them to the broker. The fund pockets the difference between the higher price at which it sold and the lower price at which it covered its position.

This long-short construct is designed to insulate a market-neutral fund from whipsaw movements in the stock market. If the market goes up, the fund can expect to lose money on its short positions overall but earn money on its long positions. If the market goes down, the fund can expect to lose money on its long positions but make money on its short positions. In the meantime, the fund will enjoy a steady stream of interest income on the proceeds of its short sales until those positions are closed out.

A Different Driving Force
Unfortunately for the Barr Rosenberg fund, its stock-selection strategy has not served it very well to date. The new fund performed admirably during last year's volatile third quarter, when it earned 1.8 percent while the S&P 500 was falling 10 percent (and the average domestic stock fund was losing 15 percent). But for all of 1998 the fund lost 1.1 percent, compared with a gain of 28.7 percent for the S&P 500.

The Barr Rosenberg fund uses proprietary computer models to select stocks that appear to be undervalued for its long positions and to find those that appear to be overvalued for its short positions. But over the past 18 months, the stock market has been driven by growth stocks, not by value plays.

"We've actually been able to add value [generate positive returns] in growth environments in the past, but this time the disparity has been too extreme," says Jump. Another market-neutral fund with a value-oriented stock-selection process, the Phoenix-Euclid Market Neutral Fund, was introduced last spring by Zweig Securities Corp. It hasn't fared any better. It lost 4.1 percent in last year's third quarter, and in the first quarter of this year it lost 7.1 percent. (The Barr Rosenberg fund lost 6.7 percent in the first quarter.)

To be sure, neither the Barr Rosenberg fund nor the Phoenix-Euclid fund seeks to outperform the S&P 500. Instead, their goal is to consistently earn a few percentage points more than 90-day U.S. Treasury bills, a common proxy for cash. For example, AXA Rosenberg's institutional market-neutral accounts earned an average of 14.2 percent annually over the past five years, compared with 5.1 percent for 90-day Treasury bills.



Making The Right Bets
If you think a market-neutral fund might be right for you despite this lackluster start, read its prospectus to make sure that the manager's stock-selection philosophy dovetails with your own.

As the Barr Rosenberg example illustrates, the stock-selection prowess of a market-neutral fund manager is integral to the fund's success. After all, the manager of an ordinary mutual fund with, say, $1 billion in assets must bet right on $1 billion worth of long positions to make money for the fund's investors.

The manager of a $1 billion marketneutral fund must be right not only on $1 billion of long investments but also on the $1 billion worth of short investments—for which no money was paid out upfront. In that respect, he or she is taking on twice the risk of the conventional fund manager.

The roaring bull market in growth stocks is working against market-neutral mutual funds. But one day that bull will finally slow down, and when it does, the market-neutral strategy may yet shine. At the very least, its history of success in the institutional market makes these funds worth watching a bit longer.

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Policies That Protect a Company's Good Name

A restaurant, supermarket, caterer, food processor, or supplier can be driven out of business if it's caught in a wave of lawsuits and bad publicity arising from an outbreak of food-borne illness. "Usually everybody up and down the food chain is sued"—starting with suits against restaurants or retailers by those who became ill, says Greg Benefield, assistant vice president of the Willis Corroon insurance brokerage in Nashville, Tenn. "Anyone who is involved at any point in the process is going to be named in the lawsuit regardless of the accuracy of the claim." Lending support to that view are lawyers and others familiar with such litigation.


Well-known companies that fall victim to tainted food often sue not only for actual losses but also for loss of income caused by damage to their reputation. Possible harm to the company's reputation "is one of our most serious risks," says Nancy Smith, director of risk management for Long John Silver's Restaurants, Inc. The quick-service seafood chain, based in Lexington, Ky, has never been embroiled in a tainted-food problem. The risk for restaurant chains, however, is that when one store is determined to be the culprit in an outbreak of illness caused by tainted food, people often stop patronizing other restaurants or stores in the chain. It may take months or even years to regain the lost business, experts say. "If you supply a contaminated product to a name-brand restaurant chain or franchise and there is a food-borne-illness outbreak, your customer will expect you to pay for their loss of reputation and the resulting loss of income," says John Cavanaugh, director of new-product development for the Chubb Group of Insurance Companies in Warren, N.J.

To address such problems, Chubb recently introduced a prod uct called reputational-damage liability insurance, which can be added to a company's umbrella liability coverage as an endorsement (insurers' term for a provision added to a policy). "It protects us from a potentially very serious risk that would otherwise be unrecoverable," says Joel Kolen, president of Empress International, Ltd., a frozenseafood supplier in Port Washington, N.Y. Kolen, whose company recently signed up for reputational-damage coverage, says, "The real issue for us is the cost of defending yourself in a lawsuit whether you are at fault or not."



More Than Legal Costs
The new reputational-damage endorsement pays for all legal expenses on top of any damage settlements or judgments. "In addition to paying for the legal costs," says Smith of Long John Silver's, "it can give suppliers a marketing edge by showing potential major customers that someone else has put their money on the line and has given a sort of stamp of approval." John Keane, president of Capital Risks Concepts, an insurance brokerage in White Plains, N.Y, says: "This insurance can also strengthen a small company's financial picture. When you apply for a loan, your bank will know that you're covered and [that you] won't go bankrupt if you're caught in a wave of lawsuits." Most reputational-damage coverage is being purchased by food companies—large and small—for peace of mind. "Quite honestly," says Willis Corroon's Benefield, "this is sleep-well insurance for business owners who have all their money tied up in their food enterprises. They know if disaster strikes, they could be wiped out."

Factors In Setting A Premium
Knowing what is and isn't covered is always important in buying insurance. "You should employ due diligence in checking out any reputational-damage insurance before you buy, to make sure the agent explains how the coverage works and what's included and what's excluded," says Robert Massi, a plaintiffs attorney in Las Vegas. He has represented clients who sued a fast-food chain and its suppliers following illnesses traced to tainted hamburger meat. The premium depends on the company's sales volume, the nature of its customers and suppliers, and its quality controls. Chubb's Cavanaugh gives the following example of a company that annually sells $10 million worth of fruit filler for pies, some of which go to a regional restaurant chain.

"The restaurants account for $5 million in sales," he says, "and the other $5 million goes to hospitals and schools, which don't have the same reputational risk as a well-known company. "The supplier has a good product-recall setup and a good quality-control program. With this sales mix, we would charge around 5 to 10 cents for each $1,000 in sales. "The annual cost would come to around $1,000 for $1 million in coverage." For more information on reputationaldamage insurance, check with your insurance agent.

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Insurance Coverage for Y2k Losses

Insurance companies can provide coverage for business losses caused by storms, fires, and other such calamities. But they're not so sure about offering protection against damage attributable to computer breakdowns caused by year 2000 problems.

"Insurers are notifying small-business customers that they're not covered for any losses caused by Y2K problems," says Patricia Bennett, a small-business contingency-planning consultant based in Cherry Hill, N.J. But if you're willing to pay a higher premium, she adds, "you can buy tightly written Y2K liability coverage."



Vic Sanders, senior vice presi dent of the Rust Insurance Agency in Washington, D.C., says his agency offers specialty liability coverage on a selective basis. For small companies that are  thoroughly prepared for Y2K, a year's coverage can cost about $2,500. But for companies that are not well-prepared, the premium can be $10,000 or more. Coverage does not include business interruptions attributable to Y2K problems. To qualify for Y2K coverage, Sanders says, you have to jump through a lot of hoops. "Acceptance," he says, "is based on an underwriter's review of a very detailed, five-to-10-page application form." Such applications typically ask what percentage of your total operations involve activities such as data processing, customsoftware development, and support services.

At Media Professional Insurance Co. in Kansas City, Mo., companies that satisfy  the underwriters can purchase an "errorsand-omissions" policy written for service companies such as direct-mailers, funeral directors, travel agencies, brokers, publicrelations firms, and research laboratories. The errors-and-omissions policy may be adapted "to include such firms as those in the computer business whose errors might have created Y2K problems for, say, a grocery store's inventory and cashier system that crashes," says Chad Melton, a senior vice president at Media Professional. The company also insures businesses whose Y2K remediation work for others might not measure up on Jan. 1.



Media Professional and other insurers are quick to note that they are not selling policies that cover Y2K liability exclusively. Instead, they are including some Y2K coverage in packages that insure against more-traditional types of risks. Another type of Y2K insurance—separate from general business coverage—is designed to protect directors and officers against claims alleging failure to achieve or properly disclose Y2K compliance. One such policy is D&O Gold from the American International Group, based in New York City. Applicants must fill out a 10-page form on potential Y2K exposure and compliance efforts.

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