Tuesday, June 18, 2013

Beginnings and Endings, or Not.

Sculpture on the grounds at Columbia University, NYC
I'm not a huge fan of contemporary art, and by comparison my step son is quite the scholar and critic, so I'm trying to be open and learn. As respects the piece in the photo above, I'm drawn in by the geometry and it's complexity. I must admit that I have no idea if there's a beginning and an end, and more than likely if I'd ask the artist they'd ask what I think, or what do I see or something similar. Sigh.

Not being able to clearly identify the beginning and the end is fine in the world of art and I'm sure in many other "places", but it really makes life complicated when professional services are being rendered or offered. Most professionals - and their clients - can tell you with some certainty when a professional relationship began, but all too often there's nothing quite so clear when it comes to the end of the relationship.

Law firms, and some other professionals, use engagement letters when signing up a new client, and they use (or they should use) dis-engagement letters when firing a client, or when the client takes their business elsewhere. Not doing so is simply an open door for misunderstandings, and unfortunately these days that could spell trouble. And trouble in this case is spelled l-a-w-s-u-i-t.

If your clients are providing professional services and not using written contracts they're asking for problems. It may not seem like it has anything to do with their questions about insurance, but if your client is still doing business in a very informal way, especially if they have some assets at risk (and they do), it would be wise to encourage them to be a bit more proactive. And by advising your clients accordingly you will be helping your own agency avoid potential errors and omissions issues.

There's a very good post about this by a law firm called Goldberg Segalla with some case study info provided. Here's the link http://professionalliabilitymatters.com/2013/06/05/the-break-up-knowing-when-the-professional-relationship-is-over/

It would be nice to think that the world still functions as it did "back in the day", but as we know things have changed and not always for the better. If you need some help finding resources, making suggestions to your clients, etc just let me know. I'd love to give you some tools to work with.

Thursday, May 30, 2013

Architects and Engineers - This Could Be Big...

Whales: Giants of the Deep    Natural History Museum, NYC
On a recent trip to NYC six of us kids (OK, five "adult" kids) and our two year old grandson made a stop at the Natural History Museum. We wanted to see one of the newest exhibits, and the photo above doesn't really do justice to either one of two engineering feats - the whale itself or the exhibit created by the museum staff. This is an impressive display, and I can only imagine the difficulties encountered and problems faced by those creating the exhibit.

I'm constantly amazed at the ability of architects and engineers to successfully solve problems, especially unique or complex ones. Successfully solving problems is part of our jobs as insurance professionals and certainly part of your daily routine as an agent. Our goal is to equip you to be able to handle those challenges, and we have another tool to help you do just that.

One of our carriers successfully writing Architects and Engineers professional for decades has released a new policy form. This new version includes many coverage features that are beneficial to your customer. Some of these features appear on other forms, but few if any other carriers provide all of these on one form. We're pleased to be able to offer it to you.

Here are some of the high points:

Deductible Credits:  This form offers numerous deductible credits, and most carriers today only offer mediation deductible credits. Per American Council of Engineering bench marking - 45% of claims are settled by negotiation, 31% mediation, 7% arbitration, 3% trial and 6% other. This form provides incentives and the tools for handling claim situations quickly, and of course that's better for all parties involved. Chances are good your client may not even pay the deductible on this policy form. Credits as follows:
·        3X's Aggregate Deductible (competitors are "each and every")
·        LEED certified buildings (50% up to $25k)
·        Award-winning buildings (50% up to $25k)
·        Claims resolved through mediation (50% up to $25k)
·        Claims resolved through negotiation (75% up to $25k)

Supplementary payments: This form offers some of the broadest supplementary payments available in the market.
·        Loss of Earnings - $500 per day/up to $15,000
·        Regulatory and Administrative Actions coverage - up to $25,000
·        Subpoena/Record Request - up to $5,000
·        Professional License and Disciplinary Proceedings coverage - up to $50,000

Some additional features/benefits:
·        Claims Made (not Claims Made & Reported)
·        Pre-claims assistance 
·        Risk management services
·        Contract review services

Send new business to submissions@tuscano.com or call 800-442-8063 to obtain apps or additional information.

Monday, May 13, 2013

Professional/E&O Market Challenges

Oglebay Golf Resort, Palmer Course, Wheeling WV

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.