Patrick McAlpine – Stephens Insurance LLC

Imagine you run a high-contact business, maybe a hotel, medical practice or a fitness club. It’s early March and business is strong as the end of winter is on the horizon. Then, without notice, you’re forced to shutter or slow your business.

Like thousands of other businesses being impacted by COVID-19, it’s time you check your insurance policy.

And for Patrick McAlpine, the senior vice president and general counsel for Stephens Insurance, a family-owned brokerage in Arkansas, that has made for an interesting 2020.

“This is all unchartered territory for us in the insurance industry,” says McAlpine, who’s been the general counsel at Stephens for more than a decade. “Sure, there was the Spanish Flu in 1918, but there’s not a lot of insurance-related information to examine.”

More than filing cabinets

Prior to the pandemic, the biggest thing on McAlpine’s agenda was pending litigation. But the courts in Arkansas and elsewhere are still closed, judges aren’t moving cases along and the litigation remains pending.

With this shift, McAlpine quickly focused his attention and expertise on record retention, an area he believes is often overlooked in the industry. Because insurance policies can provide coverage long after a client stops paying premium—for example, a worker’s compensation claim from an injury that happened in 2002—the policies never truly expire and the documents related to the policies must be accessible. Currently, these legacy policies are a mix of paper and electronic records, which can delay review and resolution when matters arise.

McAlpine thinks the insurance industry can’t simply follow the IRS’s record management model, which allows for tax records to be kept seven years before they’re destroyed. Instead, he argues, clients should be responsible for keeping important paperwork. But this would be a seismic shift, particularly for a client-centered business such as Stephens, McAlpine notes.

“We can’t really pick and choose between documents that can be kept or destroyed. There’s a lot of notes and other documents that matter in insurance,” he says. “If we hadn’t made the shift to digital record-keeping early, it would be a bigger problem.”

Digitizing documents has relieved some of the upkeep pressure , but McAlpine says there’s never going to be a purge of paper records. Perhaps, he says, the company will move older documents to an archive that isn’t accessible in real time. A caveat with that approach: even the archived files would need to “stay with the times.”

“Archiving documents may sound like an easy fix, but you still have to consider the format, accessibility and oversight. Clients want their information in real-time, and we have to be prepared to quickly meet their requests,” he says.

Trying to find a standard is a roadblock to record retention, and there’s something to be said for expecting the client to maintain its own records. Ultimately, companies like Stephens have to decide what its duties are in terms of record retention and what liability exists to retain those documents.

Dealing with COVID

Another roadblock for McAlpine has been the huge boulders presented by the pandemic. As general counsel, McAlpine is involved with the company’s response to the coronavirus in two ways: ensuring the company continues to safely operate; and addressing the changes in the property and casualty insurance industry as a result of COVID-19.

Stephens implemented a work from home policy in early March, and the company hasn’t missed a beat operationally, he says. While there aren’t any immediate plans to return to the office, some employees occasionally go into the office on a one-off basis with appropriate safeguards.

“We are weathering the COVID storm well, we were pretty proactive at the onset and from a tech standpoint, our IT staff and leadership have been excellent,” McAlpine says.

For months, McAlpine and his team of two assistant general counsels have spoken weekly with the Stephens’ claims team about the nature of the COVID-related claims their clients face. They’ve discussed what arguments can be made on behalf of the clients and ways to best track other COVID-related claims and cases throughout the country.

“We’re leveraging relationships with outside counsel, one that uses a litigation tracker that we’ve tapped into,” McAlpine says. “There’s a couple of other law firms that are posting blogs and notices about COVID litigation.”

McAlpine’s present guidance to clients is that COVID is an uninsured risk, especially to businesses. While a company can buy insurance to protect itself from weather events like hurricanes and flooding, there’s nothing to protect them from the damage caused by a global pandemic.

“I think we’ll ultimately see a new type of policy, probably in the form of a government-backed initiative, similar to the National Flood Insurance Program. Clients may have the opportunity to add pandemic coverage, similar to what happened with terrorism insurance after 9/11.”

Taking a traditional route

There was no eureka moment for McAlpine while he studied history at the University of Arkansas that led him to pursue a career in law.

Upon graduation from the University of Arkansas at Little Rock School of Law, McAlpine became an associate attorney at Williams & Anderson. After a year, he moved to a similar role at Quattlebaum, Grooms & Tull. During his four years there, McAlpine handled matters including products liability suits, employment and non-compete litigation, and intellectual property matters before jumping at the opportunity to move to Stephens as a staff attorney in February 2004.

“My workload now crosses both property and casualty insurance to employee benefits,” he says.

McAlpine held the staff attorney position for four years until he moved to Staffmark to be the staffing company’s assistant general counsel in January 2008. He rejoined Stephens Insurance as the general counsel in October 2010.

He’s not a betting man, but there are some things McAlpine can foresee for Stephens in the next five years. McAlpine expects the company to further workplace efficiencies through technology, in turn, increasing the time employees have to interface and connect with clients.

“Our lawyers routinely engage with clients, and I think we’ll continue to make sure our attorneys are never just back-office employees, but continue to have significant roles in assisting clients,” McAlpine says.