An annual review of your insurance coverage may be the time to make changes in coverage, endorsements, or carriers.

Any time you make changes in the way your business runs, you can also change your exposure to risks. As your organizational needs evolve over time, it’s a good business practice to consider whether there are other carriers that can offer reduced premiums or expanded coverage better suited to your requirements as you grow, move, or expand your offerings.

Fortunately, the insurance marketplace is responsive to changing risks that buyers face. In some cases, it may make more sense to remain with your current carrier but update the terms of your program agreements to reflect your current operations. In other cases, a new carrier may be able to provide coverage more tailored to the new risks your company is encountering. Transitioning to a new insurer could have unintended consequences, however. The experience of your insurance advisor can be invaluable.

Should you choose to make a change, a strong relationship between you, your insurance broker, and the carriers will make the transition as smooth as possible.

Here are four ways your insurance broker can keep you informed about your choice of carrier to help you avoid any surprises.

1. Stay Ahead of New Market Conditions/New Insurers/New Coverages

Your broker can keep you apprised of factors impacting the overall market to prepare you for possible premium increases or decreases with your existing carrier well in advance of renewal. The broker should also be aware of insurers that are offering new lines of coverage and should approach the carriers for quotes on your behalf.

In addition, brokers can help you stay ahead of emerging coverages and potential exposures that may affect your business, which is critical to avoiding losses that may not be covered under your current policies. Understanding the differences among your policies, knowing what they do and do not cover, and advising you on what endorsements you should obtain for your standard policies can help ensure that your company isn’t exposed to unnecessary or avoidable risks.

Recently we worked with a new client to provide coverage for social engineering fraud (SEF), which occurs when a hacker imitating a senior executive, sends a phishing email to an employee telling the employee to wire company funds to a bank account on an emergency basis. The business owner mistakenly believed that either the cyber policy or the crime policy covered the loss. But neither of the policies had been endorsed to provide SEF coverage, and the business was left with a gap in coverage that the risk manager hadn’t realized until we brought it to the manager’s attention.

2. Update the Fine Print of Your Program Agreements

Most carrier agreements stipulate that in the event you transition to a different insurer, the collateral amount can be reset at the carrier’s discretion. If your policy is on a large deductible or other type of loss-sensitive program, you might experience substantial cost implications. Your broker can thoroughly review your program agreements with your insurers and, if possible, amend this wording by setting specific parameters around how the collateral will be calculated. For example, the calculation might include predetermined loss-development factors or consideration of the insured’s outside actuary calculations.

3. Review Outstanding Claims

When you change carriers, there will inevitably be outstanding claims to process, but standard agreements typically nullify any special claims-handling procedures that were put in place while you had your coverage with the insurer. As a result, you will still be dealing with claims, but you might lose the ability to have any or all of the following:

• Free claims reviews
• Use of a pre-selected defense counsel
• Notification of reserve changes
• Ability to have input on settlement amounts
• Continuity of adjusters because the insurer will most likely move any open claims to a different unit

Your broker should review the agreement around what happens if you move from the insurer and, when appropriate, modify the agreement to create as much certainty as possible around the way outstanding claims will be handled.

4. Adjust for Changes in Insured Operations

Many insurance policies limit coverage to events that occur in a certain geographic area. The insured area is often referred to as the “coverage territory.” If your company expands its operations outside the United States, your broker will need to review the coverage territory in all policies to ensure there are no exposures in your new areas of operation that aren’t covered in the existing policy. Similarly, if your company begins offering new products or expands on the scope of existing services, an in-depth review of your existing coverages is necessary to make certain no new coverage is needed.

Here are two examples of changes in insured operations that we’ve helped our clients with recently:

• An insured established a new 401(k) plan and began providing health coverage to employees. They now needed fiduciary liability coverage because these plans are subject to ERISA and present possible personal liability to plan administrator.
• An Insured decided to hire a sales force who will be driving on company business. After reviewing their options, they elected to increase the limits carried on their automobile liability coverage and added to their umbrella coverage limits.

Anticipating and planning for change is part of business. Don’t be lulled into a sense of complacency and simply renew with the same insurer year after year. You have options. Your broker is a trusted business partner who can help you actively avoid any of the potential insurance minefields that come with change, as well as choose the right path forward for your continued business success.

 

About the Author

 

Joe Tatum is the CEO of Relation Insurance Services, a premier insurance brokerage that offers risk-management and benefits-consulting services through its family of brands across the United States.

 

 

 

This article originally appeared on the PropertyCasualty360 website here and in a printed edition of National Underwriter.

Written by Kelly Tonsing

 

Traditionally, personal umbrella insurance policies have been reserved for the rich and famous. Today, however, “personal umbrellas” are becoming a standard purchase for many middle-class insurance buyers who understand their risk in a litigious economy. Adding significant personal coverage at an insignificant cost, umbrella policies offer an extra layer of liability protection on top of one’s home or auto policy. Just as the name suggests, personal umbrella policies are designed to shield you from a very rainy day.

Are You at Risk?

Here are a few hypothetical—but realistic—scenarios that might prompt you to consider the value of an umbrella policy:

• Scenario 1:
  You hire a professional painter to paint the trim around the top of your house. He falls off his ladder and is killed on impact. Even though the painter is found partially responsible for his fall, the case results in a $1.5 million settlement to his survivors. In this instance, would your current homeowner insurance policy provide you the necessary protection?
• Scenario 2:
  Your daughter is turning 16 and wants to celebrate by having her friends over for a pool party in the backyard. One of the teens, showing off, decides to do a backflip into the shallow end of the pool. His face collides with the bottom of the pool, causing major damage to his jaw, teeth, and eye socket. You learn from his parents and the doctor that the boy will require months of reconstructive surgeries to repair the damage. Would you be prepared to write a check to cover his medical expenses?
• Scenario 3:
  While driving to work, you accidentally bump your thermos from your cup holder. As you reach for the thermos to prevent hot coffee from spilling all over your lap, you strike a bicyclist in a crosswalk. The bicyclist, who also happens to be a doctor, incurs injuries including a concussion and a broken pelvis. As a result, he must undergo extensive physical therapy and is not able to work for four months. His annual income is $350,000, which means, as a direct result of the accident, he loses $120,000 in wages and accrues more than $500,000 in medical expenses. What level of liability does your auto policy include? Do you have enough equity in your house to cover this? How about in your retirement account?

These situations are commonplace and can happen to anyone. Just one lawsuit from an injury or accidental death could cost you millions of dollars—enough to wipe out your savings and retirement accounts. Because you are liable for a court-ordered settlement, even your future wages are at risk.

If you have assets (e.g., homes, retirement accounts, brokerage accounts, and/or cars), you are at risk to lose everything, as basic policies only cover a small portion of these possessions. Ask your agent to fill out an asset worksheet to determine whether or not you could benefit from a personal-umbrella policy. Because when the clouds roll in, you’ll want to stay dry.

This article was first published by Captive Review, and written by Richard Cutcher.

 

California-based Ascension Insurance Services is expecting to add a second cell to its segregated portfolio company (SPC) in the Cayman Islands.

Captive Review reported in February 2015 AARIS Insurance Company SPC, owned by Ascension Insurance Services, had formed the jurisdiction’s first portfolio insurance company (PIC) – AGG 1 PIC.

Legislation enabling PICs, comparable to incorporated cell companies (ICCs) in Guernsey, came into effect in January 2015.

“We were up against a tight deadline because the renewals for the members were in February and the legislation was only passed the month before,” Paul Tamburri, west coast risk management practice leader at Ascension Insurance Services, told Captive Review.  “We had to get the fronting in place and ensure the carrier understood they were now contracting with the PIC rather than AARIS.”

When AGG 1 PIC was established it originally had 13 members.  That has since grown to 15.  All members are agriculture businesses with California or Arizona risks writing workers’ compensation.

The rush to find a solution for the original 13 members came about after the owners of a separate Bermuda segregated account company (SAC) changed hands and the clients in two of the three cells wanted to continue working with Ascension.

Tamburri said one of the reasons the SPC option was so attractive to Ascension was they saw the potential to offer a PIC solution to other groups of clients.

“We are already working on a segregated portfolio which we hope to get running by 1 April,” he added.  “That cell will be for another group of agricultural clients and is also for workers’ compensation.”

Ascension also works with the trucking industry and education institutions.  A large part of its client base is non-profits and the firm is considering setting up another vehicle especially for medical stop-loss.

“The SPC is a big opportunity for our company as a whole, and not just for this one PIC,” Tamburri said.

 

This article was first published by Captive Review, and written by Richard Cutcher. Captive Review was launched in 1999 and caters for the risk management and captive insurance communities.

Depending on where you live, hail can be either a sporadic, mildly irritating event or a potentially devastating, destructive threat.

According to the Wikipedia article, hail is a “form of solid precipitation”. It sounds harmless enough, yet hail storms cause damages to crops and property each year. Per NOAA, “small hail, up to about the size of a pea, can wipe out a field of ripening grain or tear a vegetable garden to shreds. Large hail, the size of a tennis ball or larger, can fall at speeds faster than 100 miles per hour and can batter rooftops, shatter windows and “total” automobiles.” Hail causes an average $1 billion a year in damages in the U.S., according to the National Storm Damage Center [https://stormdamagecenter.org/hail-storm.php]

In North America, hail is most common in the area where Colorado, Nebraska, and Wyoming meet, known as “Hail Alley”. Hail in this region occurs between the months of March and October during the afternoon and evening hours, with the bulk of the occurrences from May through September. Update: just this past Sunday, The Weather Channel reported severe damage from hails storms in the south. Watch the video.

Identify hail damage after a storm

If a storm hits your home, follow these guidelines:

• Look for dents, cracks or breaks on windows, screens, doors and even patio furniture.
• Examine outdoor appliances like air conditioning units, and look for dents or excessive water intake.
• Check trees and shrubs; if they’re stripped of foliage, there’s a possibility your roof might be damaged, says the Rocky Mountain Insurance Information Association.
• Inspect your vehicle(s) for cracked or broken glass, or dents caused by hail
• Be safe when checking roof damage; consider using binoculars, or call a professional

If you find damage, take action

Take pictures before you make any temporary repairs. And, cover any damaged areas to prevent additional negative effects from the storm– board up any broken windows or cover a hole in a roof with a tarp.

Regardless of the level of damage, you’ll also want to promptly report it to your insurance company, which may have recommendations on finding a contractor to repair damage. (Remember to save all the receipts; you’ll likely need them for your insurance claim.)

Download our full checklist so you can be prepared when the skies get dark and grey, for how to look for hail damage.