Posted on 12 Dec 06
This article is courtesy of our storefront owner:Professional Liability Solutions, Inc. We have all known someone that got a “great deal” on a new car. They say, “I got a great deal and I really worked that salesman down to the last penny.” If they ‘think they saved money then the result has to be good. Right? Most likely they got to an affordable monthly payment and decided not to pay attention to the finance charge or trade-in value. Typically, they simply want to stop negotiating and take the easy way out. Insurance markets seem to flow from perceived “hard” and now “soft” markets. Today it seems there are more carriers available and premiums are generally trending lower. Agents tend to stop marketing their renewals since they are guaranteed to present “good news” to their client. Why re-market a renewal if the client seems happy? There are several factors to reconsider before simply renewing the policy. • Financial Rating There are numerous start-up carriers that are not AM Best rated; many financially stable A-Rated carriers are wanting to grow their insurance book and liberalize their underwriting standard; which allows them to pick-up the Claims-Made retro period while the start-up is still viable. Once a start-up or under capitalized carrier has financial problems the stable carrier is less likely to be as generous. What happens to claims that are not reported to the now floundering carrier? • Policy Form Insureds that are covered by a “demand” trigger will greatly benefit by moving to an “incident” trigger. Moving the coverage now will improve the insureds opportunity to present claims that occurred within the retro period but have not been formally presented with a cause of action. Additional policy form enhancements include: Punitive Damages (some carriers are “silent”), Non-Owned Auto coverage, Accelerated “Tails” or increasing limits. • Financing Carriers will offer interest-free or generous payment programs as an inducement to move coverage. An insured could save several thousand dollars even if the premiums are exactly the same. • Agents E&O Sorry to be the harbinger of bad news. If a claim is uncovered because the company is no longer in business, or the claim cannot be triggered, or no coverage is available; where do insureds look for a remedy to their financial situation? Take a few moments to review the insurance market. Provide the insured with all their options. Present a Win-Win solution. Be mindful of the fiduciary responsibility to your agency. At the end of the day, you might be protecting your professional reputation. For more information on the products and services offered by Professional Liability Solutions, Inc., visit their storefront at www.programbusiness.com
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