(Article published in the Mar 1, 2006 issue of Manila Standard Today)
contrast with the hollow ring of still President Gloria Macapagal-Arroyo’s
“I am sorry” in the wake of the “Hello Garci” exposé of
the call to a Comelec official whom neither caller nor callee (not
“coolie”) would identify was the almost hallow tone of the statement
last month of Eugenio Lopez III, ABS-CBN chairman and CEO.
what had previously been articulated for him by his subordinates, the
Lopez patriarch in reaction to the Marius Corpus assessment of the Ultra
Stampede, reportedly said, one full month prior to Ash Wednesday:
am responsible and I will hold myself accountable should our justice
system so determine in the future. There will be no whitewash.
We will continue to work with the government and all its
do not know the man whom some people call by his nickname “Gabby” from
Adam nor am I a fan of the Lopez Group of Companies. In fact, I am
extremely annoyed by the periodic calls and visits of the Zpdee’s
collection and disconnection teams despite a standing auto-debit
authorization from a valid credit card, a system of payment they
themselves encouraged. And I
tell my dog to chase the Meralco bill collector.
despite his business organization’s failings, Mr. Lopez’s statement,
in my view, crystallizes the standard of personal risk that anyone who
deals with the public, in business or in politics, ought to accept. Male
or female, good leaders, pardon my French, put their balls on the line.
what if the business owner is not a Lopez, or, being one, of the kind who
is not as affluent? Must
keeping faith with one’s publics always mean putting in economic
jeopardy one’s entire estate? Professional
risk managers tell us, “not so”.
The pain of being made liable to one’s customers, when it comes,
may be mitigated by business owners, whose business with the public
constitute the core asset in their personal estates, by taking out public
liability” is, in insurance industry lexicon, an umbrella term that
generally refers to the risk of being made to pay legal claims of third
parties, i.e. persons who ordinarily are not related to the business under
a contract. For
example, a personal injury claim by a member of the audience at the front
row who is hit by the mike of a performer gyrating in Elvis Presley
fashion. Or a complaint by La
Sallite (with a genuine high school diploma) in the box section struck
unconscious by the ball thrown in the air by a waterboy of the victorious
Blue Eagle basketball team. Or,
seriously, a case brought against the shopping mall owner by a visitor who
slips on the floor due to melted ice cream spilled by a bratty kid and
left unattended by the contract cleaners.
“Public liability insurance” is a policy providing coverage
against that risk.
am no insurance man, like the ageless Reynaldo A. De Dios,
publisher-editor of Insurance
Philippines, who ought to be able to give the best advice of what you
coverage you need, but, in my view, a business owner wanting to protect
his estate from legal tsunami, should seriously consider three types of coverage: first,
against premises liability; second, against product and services
liability; and third, for the magnates and taipans,
directors and officers liability. The
risks may be covered by his or her standard general liability policy; but
then again, they just might not be.
to legal liability for damages in general from several provisions of the
Civil Code, but, the most bothersome is Article 2198 which says that
“the principles of the general law on damages are hereby adopted insofar
as they are not inconsistent with this Code”.
This incorporation by reference raises the specter of an
ultra-litigious environment (where so-called plaintiff-lawyers roam for
victim-preys) that we find in the United States coming to our shores, if
it has not come yet together with Hollywood on television.
liability is the most common exposure because business owners are expected
to have places of business. Even
notaries public who ply their trade in the vicinity of city hall are
mandated by the Supreme Court to have a fixed place of business. Although the possibility of personal injury in a notary’s
office is quite remote (unless you refuse to pay the fees and the clerk of
the notary knocks you on the head with the notarial seal), theater owners,
shopping centers, restaurants, are particularly vulnerable. I understand, though, that motel owners, for some reason
unknown to me, are not afraid of premises liability and pay no insurance
premium, other than mayor’s fees.
and services liability insurance is premised on the obligation to
safeguard customers from the harm they may suffer from the use of a
product or service. This is a particularly complicated area of litigation
because the claimants can choose from a wide range of choses in action (in
non-lawyer language, justification for suing) from breach of warranty,
express or implied, real or imagined, to negligence, actual, presumed, or,
almost conclusive. Food and
drug manufacturers and providers, professionals (a label given broad scope
in US tort litigation that includes pool hall operators, truck and taxi
drivers, but not, I believe, taxi dancers), and, particularly,
transportation companies ought to be interested in this coverage.
active local market for directors and officers liability insurance, I was
told, is presently limited to multi-national corporations doing business
in the Philippines. But, as
Mr. Good Corporate Governance, Jess Estanislao, continues his crusade, and
as the Securities and Exchange Commission relentlessly push the campaign
for the widespread adherence of companies, including those not subject to
the Securities Regulations Code, to the principles in the Code of
Corporate Governance, this type of coverage will soon be in demand.
directors and officers liability insurance deals with exposure arising
from errors and omissions, not negligent acts, that a director or officer
commits in the scope of his functions and responsibilities. For instance, failure to look into the off-balance sheet
liabilities of an enterprise prior to a merger or acquisition might be the
propounded reason for a decline in shareholders’ value.
Directors and officers liability insurance is not for claims
against negligence or deliberate acts; it is for the resulting damage from
oversights, errors, mistakes and misinterpretations.
must confess, however, that I do not know whether a “lapse in
judgment” of an impeachable public
official is a risk covered by directors and officers liability insurance.
Party loyalty, acquired, developed and maintained by means not
known to many of us, just might be the right insurance for that.
But, the effectivity of that kind of coverage, I was told by Fr.
Joaquin Bernas, S.J., in my sleep, is only for a year.
a fourth risk reared its ugly head just as I was writing this item: the
risk of censorship and/or closure faced by media establishments who do not
comply with the yet unpublished standards that Daily Tribune, in the mind,
if any, of those who ordered the raid on the paper last Saturday failed to
I am, of course, not vulnerable to the censorship risk because I do not think anybody reads me. How can they stop the reading of what is not read? But, just in case there is one wayward reader out there, I give notice that this and my next few items, for as long as the state of emergency exists in the mind of still President Gloria Macapagal Arroyo, will be sent by e-mail to whomever cares to receive it at the same time that it is sent to my editor for publication the following day. If you wish to be a recipient, please send your e-mail address to email@example.com or firstname.lastname@example.org and I trust my editor will forward it to me.