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Three distinct phenomena negatively impact the commercial and, to some extent, personal insurance marketplace: The Winner’s Curse, Submission Bias, and Overconfidence. These phenomena are explained in an international whitepaper titled, “Analyzing the Disconnect Between the Reinsurance Submission and Global Underwriter’s Needs.”
ISO introduced five new cannabis exclusions for use with the BOP policy. Two of the five are essentially “absolute” exclusions and three have a hemp exception. This article introduces and explains these new endorsements.
ISO is intent on developing cannabis-related endorsements. To date it appears that most are exclusionary endorsements. Because the federal government and the states seems to be on opposite sides of this debate, ISO needed to act on behalf of the insurance industry, which is stuck in the middle. This article addresses 11 of ISO’s recently filed cannabis endorsements for use with five of its programs.
Do you know how to code and rate commercial lines accounts? Do you understand the difference between coding, rating, and coverage? If not or you’re not sure, then take a few minutes to read this article and, if warranted, respond to our inquiry at the end of the article.
Test your knowledge of the CGL and BAP with this short 10-question quiz.
Need help finding the condominium laws of each state? This reference gives you the condominium law, the horizontal property law, the common ownership law, or whatever it is called of every state. Useful – and needed - whether you insure the association or the unit owner.
Contractors’ Professional and Pollution Liability is the contractor’s coverage solution. Often referred to as either the Contractors Pollution and Professional Insurance, the Contractor’s Protective Professional Indemnity coverage, or simply “CPPI,” this multi-peril form specifically addresses and closes the majority of pollution and professional liability coverage gaps resulting from the limited breadth of protection provided by the CGL Coverage Part A. Now more than ever, pollution liability coverage is a win for even the smallest contractors.
Understand the coverage gaps that create the need for this coverage, how the policy works, and who needs this coverage.
An upscale art and frame shop is insured on a BOP policy. The insured owns no autos, so there is no business auto policy. In addition, there is no hired and nonowned coverage under the BOP. While loading a heavy painting and frame into a customer’s car, the insured’s employee injures the customer and damages the auto. Is there coverage for this under the BOP?
Agents have asked the Big 'I' many questions about COVID and insurance. Here are a few “talking points” that may be beneficial over the coming months.
Were you affected by the Equifax breach? There is a 1 in 2 chance you were. Even if you weren’t, there are certain steps you can take to fight identity theft, including “freezing” your credit. Yes, there are some downsides to this, but saving your good credit may be worth the aggravation.
You cannot assume the entity type you insured last year is the same entity type that exists this year. When insuring small businesses, you are fighting against several unseen entities – namely accountants and lawyers. These other professionals make changes to the small business without much thought to the problems these changes can cause your client’s insurance program.
The ISO Commercial Property form, CP 00 10, requires that buildings and structures be described in order for coverage to attach. However, ISO’s Business Owner’s Policy only requires that the premises be described. So, as long as the “building” limit is adequate, that limit applies to all structures on the premises. However, that makes it critical that all structures and their values be considered in determining limits.
Recently I’ve noticed insurance practitioners doing a LOT of cussing. No, I don’t mean using the traditional words that got us in trouble as kids; I am referring to insurance cussing. Yes, there are certain words and phrases used by many insurance practitioners that should not be used in polite company, mainly because they are just plain inappropriate and DIRTY.
Generally, an insurer’s duty to defend flows from the facts alleged in the lawsuit. When the pleadings alleged damage or injury that is covered by the policy, the insurance carrier has a duty to defend, regardless of whether the insured is ultimately liable and/or the insurer has a duty to indemnify. Conversely, when the pleadings allege facts or events not covered by the policy, and the insurer has no knowledge of facts to the contrary, the carrier is not obligated to defend – but this is a question of law.
Fatal work injuries in the United States dipped slightly in 2017 to 5,147 from the 5,190 fatal injuries reported in 2016 according to the U.S. Bureau of Labor Statistics. Likewise, the fatal injury rate decreased to 3.5 per 100,000 full-time equivalent (FTE) workers in 2017 down from 3.6 per 100,000 in 2016.
As you handle more complicated commercial accounts, you’ll need to understand some often-used financial terms. Whether you’re furnishing your commercial insured’s financial data for underwriting or renewal or responding to audit assistance, here are the top financial terms you should know.
BOP policies are not “all that.” There are some gaps every agent must know and understand before settling on a BOP.
Liability policies, whether the HO, PAP or CGL, respond when the insured is judged to be “legally liable” for the injury or damage. But how is “legal liability” determined? That is the question answered in this short article.
An insured’s offer to purchase insurance is made in the form of the application, supposedly completed by the insured. Acceptance flows from the insurance carrier in the form of a policy. Logically, then, the insurance negotiation begins with the application.
Insurance (or assurance), as we understand the concept today, is more than 700 years old. But what events shaped our modern world of insurance? Following are some interesting facts, myths, and legends that helped mold the current insurance world in America.
With the availability of the COVID vaccine, many discussions revolve around the legality of an employer requiring a vaccine. If the employer is allowed to require the vaccine, what are the insurance implications if an employee gets ill or even dies as a result of the vaccine? Is there a policy that will respond?
If the person or entity causing injury or damage to a third party is NOT an insured in the policy, guess what – there is NO coverage. Who is an insured, and not an insured, in the CGL, BAC and work comp must be understood, because if this is wrong, all the great work in designing coverage is useless!
An interesting post on LinkedIn by risk management consultant Jack Schwartz, managing director at Davis + Gilbert Risk Management, caught my attention. The issue, according to Schwartz is that insurers are increasing the number of warranties placed on property policies, whether these are location-specific policies or smaller scheduled locations.
Are you ever confused about whether a particular policy form is a pure ISO form, a modified version, or a proprietary insurer form? This article provides a three-test approach for determining whether a form is ISO or not that is effective probably 99% of the time.
States have gone to war against some municipalities over COVID-19. Executive orders currently in place in many states still bar certain businesses considered “non-essential” from opening; but some municipalities have told their respective governors they are opening the community regardless.
Perfluoroalkyl Substances (PFAS) are a hot topic with Insurance Services Office rolling out forms to exclude coverage for PFAS. This article will provide what we know to date on this important topic.
The economic disruption caused by COVID-19 has left millions of people unemployed—at what many say is the highest rate since the Great Depression. In considering the future, those who’ve lost their jobs may think about starting a home-based business as the crisis eases or perhaps working more independently. This could create an expansion of the micro-business market—businesses with few or no employees that often operate out of homes or shared spaces.
Attorney Randy Maniloff introduces us to the difference between “the” insured and “an” or “any” insured in the insurance policy. Many ignore these little words (“the,” “an” or “any”) in the policy, but, as Randy states, policy language is king, and these seemingly innocuous words have an amazing affect on coverage.
As part of the most significant update to the ISO Businessowners program since its inception, ISO is introducing nearly 60 new, optional endorsements, revisions to dozens more, and updates to the base form. Get ready, these enhancements will be filed in the first quarter of 2022.
Although marijuana and THC-containing substances are still illegal federally, individual states are making their own laws concerning these substances. The fact is, most states are in direct conflict with the federal government on this issue. With the feds and states on opposite sides, the insurance industry is stuck in the middle. This article tells you where each state stands as of October 2019.
Once a policy is in effect and has existed beyond the underwriting period, provisions still exist allowing the carrier to cancel the policy during the policy period. These are often referred to as mid-term cancellation laws. All 50 states statutorily mandate the conditions under which a policy can be cancelled prior to the end of the policy term.
Distracted drivers are not the only danger on the road; a new study indicates that people coping with three different sleep-related ailments — insomnia, sleep apnea, and shift-work disorder — may also have an increased risk of being involved in an automobile accident.
An agent asks: A statewide landlord association board of directors of which I am a member decided not to renew their D&O liability insurance citing my state’s nonprofit corporation act as the basis for their decision. Does this mean D&O insurance for nonprofits is no longer needed or does it just greatly reduce the risk?
One of the most frustrating types of questions received by the VU “Ask an Expert” service usually begins with, “Does ‘a’ homeowners policy cover…” or “Does ‘a’ BOP cover….” The first question is, is it a pure ISO form or not? And, if it IS an ISO form, what is the edition date? What does the edition date matter? Keep reading….
Author David Dybdahl is a 35-year insurance veteran and served as the insurance broker on the clean-up operations of Chernobyl.
While the reality of today’s underwriting is often, “Does this fit the box?” today’s hard market has caused many agents to scramble toward wholesalers and carriers with heartier appetites. However, submissions swamp today’s underwriters, and they may only scratch the surface of an application before responding, “No way!” How do you get your underwriting submission to the top of an underwriting stack? This article will explore how to present a solid underwriting submission for more complex risks that stand out from the pack.
This may be the most important coverage article you read this year. It may be the most important coverage article you’ve ever read. Please read it. And please have your colleagues read it. If you work in an agency, send a link to the article to your underwriters, marketing reps, and claims people. RTFA…Read The Article!
ISO brings an interesting perspective to pricing Cyber coverage; specifically, that Cyber carriers don’t have enough individualized data to accurately price coverage. Data, it’s all about data.
Berkshire Hathaway announced the release of its new small business policy, THREE, on February 11, 2019. In response to this announcement, the VU published its critique of the policy on March 1. Insurance Journal republished the VU’s analysis in late March, but with a twist. IJ’s article contained a survey to ask the industry’s opinion of this new product asking, “What do you think of Berkshire’s THREE policy?” The results are in – so far.
Ownership, or rather the desire to own, is changing. More and more people see less and less the need to own something they don’t use on a regular basis. As the saying goes, “I don’t need a drill, I just need a hole.” The insurance industry needs to prepare for this shift in attitude and desire.
Every state and the District of Columbia grants insurance carriers an “underwriting period.” Insurance carriers are granted broad authority to cancel a newly-written policy during this statutorily-limited period.
When anyone is injured by an intoxicated individual, attorneys typically seek to suck in as many parties as possible to secure payment for the injured party. Liquor liability insurance is designed to defend the insured against charges of negligent conduct related to the service of alcohol; and to indemnify or pay on behalf of the insured if they are ultimately found legally liable for the injury or damage.
Mid-year premium growth reported by the 15 excess and surplus lines (E&S) stamping/service offices across the United States has reached almost $18 billion. Given the fact that the data reported is halfway through 2019, the growth represents a 12.68% increase over what was recorded at mid-year 2018.
Warren Buffett introduced the newest insurance disrupter – the THREE. As the name suggests, this is a three-page insurance policy intended for small businesses. If that isn’t amazing enough, this policy combines seven different coverages into its three pages. So, what is the problem? Well, there are many problems that will victimize an unsuspecting insured.
Practice the insurance profession long and you begin to hear and learn various legal liability terms ranging from the basic ideas of “negligence” and “torts” to more specific concepts like “compensatory damages” and “superseding events.” Occasionally, though, we are still surprised by what the lawyers have created – weird legal theories that can’t possibly exist.
There are two distinct marketplaces in today’s insurance arena: the admitted market – those insurers that are admitted to write insurance business in the state or country where the insured’s property or business is located, and the surplus lines market, which writes coverage that the carriers do not file with the state’s department of insurance before offering coverage. Surplus lines insurers write unusual or hard-to-place risks, including emerging dangers such as active assailant coverage, risks with high loss experience or unusual risk profiles, or where there is limited capacity in that line of business.
Although it seems reasonable that the carrier’s duty to defend ends when no insurable allegations remain in the suit – this is not necessarily always true. Some courts have a different opinion as to when an insurance carrier’s duty to defend ends. In some cases, the insurer has been required to defend insureds when NO covered allegations remain in the suit simply because there was the possibility a covered allegation may be brought back on appeal. CRAZY! Or is it?
When agents have coverage questions, they sometimes ask the underwriter for a coverage interpretation. Interested and concerned members of the VU faculty want to know why in the world you would ask the underwriter anything about coverage. Underwriters don’t make coverage determinations, adjusters do.
For insurance agents and brokers who provide services to construction managers, general contractors, and subcontractors - this is a MUST READ REPORT.
This article was referenced in our VUpoint newsletter, Vol. 1, No. 14, September 18, 2000 and is based on a question submitted to our 'Ask an Expert' service. Newsletter readers were given the opportunity to be the expert in 'solving' this case. Below is the question, followed by the submitting agent's opinion.
Below is a recent 'Ask an Expert' question we received involving a BusinessOwners Policy. While we attempted to address the valuation issues raised from the standpoint of the BOP, it became very clear that this particularly exposure was probably not suited for a BOP. While BOP's can be ideally suited for many mainstream businesses, it isn't for everyone. For a similar problem, check out our 'If the BOP Don't Fit...' article.
Below is an 'Ask an Expert' question we received involving a BusinessOwners Policy. While we attempted to address the coverage issues raised from the standpoint of the BOP, it became very clear that this risk was not suited for a BOP, regardless of whether or not the insurer was willing to issue one. While BOP's can be ideally suited for many mainstream businesses, it isn't for everyone.
At last count, we've had 15 questions concerning the difference, if any, between coverage afforded by inland marine installation floaters and riggers liability forms. For example: 'I am working on a crane company prospect and am not the current agent. The current agent is using an installation floater to cover items being lifted and I think that riggers liability coverage should be used and the insured may have some coverage issues. What are your thoughts?'
Increasingly U.S. businesses find themselves in a global marketplace. This no longer applies to just huge, multi-national corporations. Your 'mom and pop' insureds may very well fulfill orders from their web site or sell products on eBay, Amazon or other marketplace web sites. You may have hundreds of insured with international liability exposures that have limited coverage under their CGL policies and a complete lack of understanding of liability exposures in these international markets.
A significant source of uncovered claims (many that result in E&O claims against insurers and agents) involves the failure to (properly) identify named insureds on an insurance policy. For many businesses (and even personal lines accounts), the entities that need coverage can be complex and due diligence is the order of the day.
An increase in rates/premiums has been predicted for a while, though not yet widespread. But, there is evidence that the time is coming. Don't let your insureds be blindsided. In particularly if your carriers are among the first to increase rates, here are some tips to make you and your clients better prepared for the inevitable.
An agent writes, 'We seem to have some major disagreement within the office here as to whether a GL loss should be reported to the excess carrier. A few people feel that we should assess the claim and determine if we think it might come close to the GL limit – if we think it might, we should report it. If we don’t think that it will come close then we shouldn’t report it. What do you think?'
Question: 'I have a residential general contractor that is being offered coverage by a Risk Retention Group. I know that Risk Retention Groups are insurance companies that are formed and owned by the policyholders, that they are not regulated by state governments, and often do not use standard ISO forms. I'm sure there are pros and cons to this type of arrangement but do not know enough to advise my client. Can you help? Is there somewhere on your web site (or others) that I can read anything about these groups.'
“War and terrorism risks” are among the most severe issues facing organizations doing business outside the United States and, with an increasingly global economy and internet sales, more and more companies are doing business internationally. But coverage for war and terrorism is shrouded in mystique. Three myths have sprung up around it: It’s unavailable, it’s unaffordable, and (ironically) it only covers war and terrorism.
Agents who have insureds with international exposures must be aware that local laws, business customs, economic conditions, political climate, and government regulation all affect the insurance risks that the organization faces. This article examines five common risk areas that these organizations face.
Managing e-business calls for a comprehensive risk management approach and a thorough understanding of the multifaceted nature of the exposures. It is imperative to incorporate an ingrained awareness of e-business exposures in a business' employees and to provide them with the necessary tools to analyze, quantify, and manage those exposures. In this article, I'll take a look at why traditional insurance products aren't up to the task.
The inland marine form on a tree surgeon's stump grinder included a 'Fire Extinguisher and Brush Burning Warranty' endorsement. Vandals destroyed the grinder by burning it. The insurer has denied the claim because the fire extinguisher had been removed for servicing at the time of loss. Is the claim denial valid?
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