Friday, August 26, 2011
Wednesday, August 24, 2011
› Pro bono and moonlighting services covered with no prior approval required
› Attorneys added during the policy period are covered with no prior approval required
Thursday, August 4, 2011
I've developed a CE class on various Errors and Omissions topics that's approved for two hours of CE in PA. The course is designed to help active licensed agency staff, especially those working on sales, service or marketing of accounts, to navigate through the nuances of E&O risks. There's enough info to help someone who's not usually working on these classes to understand the basics, and there's also plenty of information to help those working on E&O exposures on a regular basis.
2. you and a few local agencies/friendly competitors want to join forces and have the CE class offered at one of your office locations
3. you have another idea and want to run it past us!
- Basic concepts (definitions and examples of "claims made", "prior acts" and "retroactive date", "ERP", etc)
- Pros and cons including comparison of key differences between occurrence and claims made and how to handle risks moving from one form to the other
- Additional concepts (including claims expense outside the limit, first dollar defense, "Hammer Clause", slit retro or split limit endorsements, "career coverage")
- Additional insured, waiver of subrogation, hold harmless and certificates of insurance - what you can expect from a carrier providing professional liability
- Key elements to help increase your chances of writing business
Tuscano will foot the bill, so all you or your staff have to do is attend. It's been presented a few times in Greensburg and now we're ready to take it on the road. For additional information or to talk about booking this course, contact Tim Hoelle or Emily Casino at Tuscano. 800-442-8063
Monday, May 16, 2011
The market is ever changing, and recently we've seen a few of those changes in the area of architects and engineers.
Sunday, April 17, 2011
- ADA, FFA and OSHA supplementary payments. These coverages reference the Americans with Disabilities Act, the Federal Fair Housing Act and the Occupational Safety and Health Act. If an architect or engineer renders services and the result of their design or engineering work violates one or more provisions of the act(s), the insurance company will reimburse the insured's legal fees. This is only for legal fees, not fines or penalties, and it applies when an administrative or regulatory action is brought against the insured. Limits are usually in the $25,000 to $50,000 range, and typically these limits are in addition to the policy limits and the deductible doesn't apply.
- Pollution coverage. It may be included, but check the wording as there's no true standard for this. Some policies are "silent" so there's no specific exclusion and no specific coverage wording either. Some will define the coverage they will provide and it will be very specific, and still others will include the coverage but at a lower sub-limit, possibly $250,000.
- Innocent Insured coverage. Instead of having the coverage "added" this is a situation where one of the usual policy exclusions does not apply. That exclusion is for dishonest, fraudulent and criminal acts, and will not apply to Insureds who are not involved in the excluded activity, provided they report such acts to the carrier as soon as they are aware of such activity.
- Optional Extended Reporting Period (ERP). Every policy should have such a provision to allow the insured to add time to report claims should they decide not to buy coverage going forward. The length of time varies from one to five years, and a few carriers offer unlimited ERP. The longer the term of ERP the more premium your client will pay. This coverage extension is frequently not considered when purchasing a policy, but perhaps should be in the event the principal(s) are considering retirement at some point in the near future. Some policies will include a free ERP option if the insured retires provided they have been insured by the same carrier for a specified period of time, usually not less than three years. Others may also include a limited time of free ERP if the insured is disabled or dies during the policy period. If you're inclined to talk with other clients about life or disability insurance you should be talking with an A&E firm about the same issues.
- "Attendance at Proceedings" supplementary payments - this isn't solely found in A&E policies but its worth noting. This coverage will provide additional limits for costs the insured may have to incur as a result of appearing at a hearing or trial or similar event at the request of the insurance company. Amounts per day are $250 and up, and the aggregate during the policy is usually $5,000 to $10,000 but can be higher. Check the policy, but usually these limits are in addition to the policy limits and no deductible applies.
- Mediation credit. If a claim is resolved by mediation the policy deductible is reduced by a set percentage, usually 50%, and is usually subject to a maximum reduction, most commonly $25,000.
Monday, April 4, 2011
Now that you know what I was thinking when I was 8, here are a few things you may want to think about when you are presented with an opportunity to write a business providing architectural or engineering services:
- Revenue is certainly an underwriting consideration, but you will also need to obtain construction values. Annual revenue numbers are pretty obvious, but for construction values occasionally I'll see a submission that either shows "average" values or a "max" value. Unless stated otherwise, what the underwriters are looking for is the annual total value of all of your prospect's construction projects for at least three years, i.e. the "next" 12 months, the recently ended 12 mos and the 12 mos prior to that.
- "Design-Build" firms. If your client is also involved in the building process, the carriers will need a breakdown of revenue between "design only" and "design-build" operations. Even if there's a very small percentage of "build", get the info anyway.
- New in Business. Just like with any other class, if they're just starting an A&E operation, in addition to the app you'll need resumes for the principals. If they want to include names and descriptions of projects they worked on at a previous firm, that's fine, but don't have them send an electronic portfolio of everything they've done since college. If an underwriter really needs more info to qualify the risk they'll ask for it.
- Change in ownership and/or operations. If a new owner takes over you may have a chance to get your foot in the door, especially if something about risk characteristics change. If they're now doing structural engineering and they've never done that before, the current carrier may be forced to non-renew or drastically alter pricing and terms. If they've just been given a contract for a job out of the country, the current carrier may not be willing or able to extend coverage. Find out if anything has changed or is about to change.
- Specific Projects. Sometimes an architect or engineer will not have any professional liability (PL) insurance coverage and will be asked to bid on one project that requires evidence of PL coverage. As you would expect you'll need a full app and full details of the work they are going to do regarding this project to be able to arrange coverage.
- Specific Client Excess. Similar to "specific project" coverage, but in this case one client of the A&E firm is requiring higher liability limits than the firm currently carries. Details of the project will be needed to underwrite this exposure, including name of client, services being rendered, the primary limit of liability and what carrier is writing that layer. A premium indication will be provided subject to review of the primary policy wording.
- Competition/Other Carriers. Find out what carrier is writing the coverage currently. If it's an exclusive program for an association it will be tough to beat their pricing and it may save you some time and energy. If it's a surplus lines carrier you'll obviously want to figure out why (claims, areas of practice, location, etc) and make every effort to obtain terms from an admitted company. I've recently seen a couple of situations where the client of the A&E firm is requiring a minimum AM Best rating, and that may require the client to change carriers.
Wednesday, March 16, 2011
At some point everyone finds themselves with a submission that seemingly doesn't fit. You're trying to finalize your clients overall insurance portfolio and you have this one puzzle piece that you just can't easily plug into place. It could be that your best customer gave you a referral with no idea how "non-standard" it is, or an existing client has pending or paid claims in the past year. Or maybe your bosses son-in-law is just now launching a new business venture.
Whatever the scenario, there are a few steps you can take that will speed up the process of getting the risk quoted, and quite possibly increase your chances of getting it quoted competitively. Here are a few issues you may have to contend with:
Losses: Don't wait to be asked for loss runs, provide them. That alone will move the process ahead faster. Most of the time either the agent or the client feel it's going to be worse if the loss runs are presented, especially if they show a loss or two. It's possible providing a loss run will be a problem, but it may also help. How? If the loss is open and "older" (more than 12 months) and the loss reserve remains the same or is reduced that's better than seeing a larger or increasing reserve amount. Also if the loss run from a year ago showed the claim as open and a current loss run has it closed, that's a better position from which to negotiate with a carrier. A closed claim, even if it seems like a high amount, is at least a "known" factor. The concern with a claim with an open reserve is the reserve can always go higher.
If losses have been the problem for your client, another way to potentially help is to get a narrative from the client as to any changes in procedures, staffing or other parts of their operation that have been implemented to prevent similar future losses. In this regard, if there's a story to tell - tell it. If the insurance carrier has free risk management service available, take advantage of it, especially if it can help your client reduce premiums and/or get out of the surplus lines market and back to the admitted market.
New In Business: Standard companies can have a difficult time writing new business operations, but there usually are very good alternative market options available. You can increase your chances of getting the account written with good terms if can provide information regarding qualifications. That would include resume's, special training, prior experience and education.
Operations/Services: You may have a tough time placing an account because the operations are considered high risk. If your client is designing and installing a "system" to prevent bridge piling erosion, it's going to be a tough placement. To optimize your chances of getting the best terms from what will be a limited number of markets, make sure the underwriter has a clear explanation of the services your client is performing. It might be necessary to be sure to list the services they do NOT offer that other similar businesses will offer to make that distinction.
The perception might be that your client is in a high risk occupation, but with proper info it may not be as much of an issue. For example I just worked on a consultant that trained others how to work through the processes to ship hazardous materials. Many carriers can't touch a risk associated with hazardous materials in any way. Other carriers were able to quote the account but only after they understood what the insured did NOT do, i.e. they did not instruct on how to ship or pack the materials, they did classroom instruction for those individuals who checked the shipments and made sure the paperwork was accurate and complete.
Bottom line; when you are thinking about details of an account, when in doubt, include the info. As you know, if you leave most company underwriters with the need to interpret a risk and rate it more conservatively vs more aggressively, most of the time you're going to get a conservative outcome. That means the carrier will rate it higher, restrict limits and/or just flat out decline it.
Take some time to get the pieces in place and you will go a long way to resolving this puzzle.
Monday, February 28, 2011
Most title agencies have some escrow exposure, it's just a part of what they do. While I understand that some professionals involved with title work do not have any involvement with escrow, they're in the minority.
At least one carrier has developed an endorsement to be included on the E&O policy issued to title agency businesses. That endorsement includes wording that basically says there's no coverage for ANY escrow transaction. According to a friend of mine on their book, at least two different agencies are about to find out how good their own E&O policy and carrier are, as two different claim scenarios have developed that the insurance carrier is denying on the basis of the endorsement wording.
Fortunately we didn't handle these accounts so I'm not sure which part of the "chain" failed, but I'm well acquainted with the carrier and I'm pretty sure it wasn't them. They provide all wording and endorsements with their quote, so likely either the agent or the broker failed to clearly communicate this limiting wording to their customer. And even if they did, it makes no sense to sell a title agency a policy that doesn't offer coverage for escrow transactions. That's almost like selling a restaurant a policy that excludes cooking.
If you're not sure about the options available or would simply like to discuss the account(s) you have now, let us know. We're interested in staying fully dressed, just like you.
Tuesday, February 22, 2011
- Minimum premiums start at $750
- Limits to $5 MILL are available (for qualifying risks)
- Carrier is AM Best rated A++ XV
- GL per ISO 12-07 edition
- Quotes provided from any carriers E&O app