Oglebay Resort, Palmer Course. Wheeling WV

Professional/E&O Market Challenges

I recently had a chance to play some golf in West Virginia. I'm used to playing on fairly flat ground, and about half of my shots in WV were not on flat ground. As you can see from the photo above, in the background on hole number one there's a ski lift - a good clue that the terrain isn't going to be "easy". It was quite the challenge, to say the least.

Whether it's personal relationships, sports, business or something else, one thing for sure is that over time we will encounter challenges. In the business of insurance, these days a "challenge" is the norm and not the exception. As our company underwriters adjust their appetites based on claim experience, financials or home office directives, we work hard to keep up with what is happening with our markets. Here's a snapshot of some of the things we're seeing:

Architects and Engineers: The companies writing these classes are still very aggressive on pricing for entities with routine operations. Markets are still competing for business, so on the majority of risks there's plenty of options, regarding both pricing and terms. Difficult placements include:

• structural or geotechnical engineers
• firms that do more than a small percentage of design/build
• operations involving oil and gas
• engineering firms that design and manufacture a product or products
• work involving condominiums
• very small revenues combined with any of the characteristics listed above 

Miscellaneous Professional:  The majority of risks that fall into this category are consultants of every flavor, but as you probably know almost any business operation that provides professional services can fall into this category. Most markets like just about every consultant risk that you can present, but here are a few classes that are tougher to write, consulting or otherwise:

• credit repair and/or debt settlement services
• real estate services. That would include title agencies, law firms specializing in real estate practice and mortgage brokers. Also real estate agents that generate a significant portion of their revenue from short sales and foreclosures is still a challenge for many of the admitted markets. And real estate agents or property managers selling or managing a large percentage of their own properties is another difficult risk for most insurers.
• armed security professionals
• financial advisers/financial consultants 

Accountants/CPA/Bookkeepers: This class is extremely competitive for risks that have very routine services. Bookkeepers premiums can be as low as $300. The harder to place accounts typically have one or more of these characteristics:

• heavy audit work, especially public company audit
• SEC related work
• business forecasting/projecting
• business valuations
• financial or investment advisory
• mergers and acquisitions
• management advisory services
• custom software sales/training 

Other issues may make a risk hard to place, including prior claims or incidents, new in business and/or disciplinary proceedings or actions against a licensed professional.  We have the markets and experience to help you work though the scenarios listed here as well as almost any other situation you encounter. For information on other classes or to discuss a risk, call 800-442-8063 or email tim@tuscano.com today.

Data Breach Part IV - Coverages

Photograph by Ofer Wolberger, Popular Mechanics July 2010

Most of us know that the lock on the door of our house is sufficient to prevent someone from gaining easy access to our property. It's been said that locks keep honest people out. But we also know that if someone is really determined they can breach the majority of security measures we might have in place. If they're really skilled, they can do so rather quickly. The same is true with our computers and the date stored on them, especially those used in a business operation. 

As business and government operations rely more heavily on computers to perform tasks and store data, more criminals, hackers and terrorists are turning toward computer related crimes to either make money, cause damage or both.  In the past few years there's been a significant spike in cyber crime and there's no reason to believe the rate of incidents will diminish anytime soon. The FBI's Internet Crime Complaint Center (IC3) states they received over 314,000 complaints of online criminal activity in 2011 (2011 Internet Crime Report). That's the third year in a row incidents topped 300,000, and that's just what was reported to them.

Insurance carriers are trying to keep up with the changing landscape by crafting new coverage options and improving existing wordings and features. Here are a few of the current options that may be available to your client (terminology may vary slightly from carrier to carrier, and some coverages provided, especially first party, will usually be subject to a sub-limit):

• Network and Information Security
• claims arising from the unauthorized access to data and that's usually personally identifiable information
• failure to provide notification of a breach (as required by law)
• transmission of a computer virus or similar
• liability associated with the failure to provide authorized users with access to the company's website
• Communications and Media Liability
• coverage for claims arising from copyright infringement, plagiarism, libel, slander in electronic content
• Defense Expense
• coverage for governmental claims as a result of network and information security liability, and/or communications and media liability
• Security Breach Remediation and Notification Expense (first party)
• costs incurred to determine whose identity information was accessed
• cost of notification to customers/others of the security breach
• identity fraud expense reimbursement for those individuals affected by the breach
• credit monitoring services for those notified (usually for 12 months)
• call center services to assist with inquiries
• Computer Program and Electronic Data Restoration Expenses (first party)
• expenses incurred to restore data lost from damage to computer systems due to computer virus and/or unauthorized access.
• Computer Fraud (first party)
• coverage for loss of money, securities or other property due to unauthorized access to computer systems
• Funds Transfer Fraud (first party)
• coverage for loss of money or securities due to fraudulent transfer instructions to a financial institution
• E-Commerce Extortion (first party)
• money paid due to threats made regarding an intent to destroy data, introduce a virus or attack a computer system, disclose customer info or other similar threats
• Business Interruption and Additional Expenses (first party)
• loss of income and extra expense incurred to restore operations, must be a result of a computer system disruption caused by a virus or other unauthorized computer attack

This is a fairly representative list, but each carrier tries to offer something a little different, so exact terms will depend on the unique qualities of the  business, and the carrier offering coverage(s).  Also, it's not necessary to buy all of the coverage options, usually the coverages can be purchased in sections or modules. Contact us today for a quote or help determining how to best address your client's needs.

New Product: GL and E&O For Consultants

We have a NEW product available providing E&O and GL for entrepreneurs and small businesses providing consulting services. Competitive quotes are available quickly.

Coverage includes:

• Defense outside the limit (capped at the aggregate policy limit)
• HIPAA/HITECH sublimit of $250,000
• Automatic additional insured coverage
• Contingent BI/PD sublimit of $250,000
• 50/50 cooperation clause
• Third party discrimination coverage
• Independent contractor coverage

Risks are not eligible for this product if they've generated more than $1 MILL in revenue during the past 12 months and/or if they've had an E&O claim in the past five years.

Also, your client's services must be in an acceptable category. Some of the services not acceptable for this program include: intellectual property, copyright or patent work, employee benefits or pensions, medical related work,  services associated with an architect, engineer, attorney or real estate.

If your client does not qualify for this product due to claims, services offered and/or revenue, we have multiple markets available to allow us to quote them as well.

Call or email today for a quote.