Producers are continuously looking for opportunities to
write more business. Offering some of
the coverages below may provide prominent opportunities for growth on existing
and new business accounts. The list is
not designed to be exhaustive but instead to provide ideas that could lead to
Earthquake Coverage - Natural catastrophes are the great exposers of
coverage deficiencies in the insurance programs of customers. Offering flood and earthquake coverage to
both personal and commercial lines customers is low hanging fruit. Document those files if coverage is rejected.
power failure/Dependent Property - It starts with offering flood and earthquake
coverage to be sure it is an insured cause of loss but these time-element
coverages can round out customer coverage and provide premium growth
opportunities. And these coverages
become even more important as businesses grow.
– Whether it is a personal or commercial account it never hurts to offer
customers an umbrella. The additional
limits offered along with the possibility of expanded coverage terms are very
E&O friendly to the agency. It may
be the more established businesses or the family with teenagers that are the
agency’s biggest opportunity. Be sure to
verify underlying coverage limit requirements are met and claims are reported
on a timely basis though.
Inside or Outside the Limits Matters - For those customers that have
coverage with defense inside the limits, talk with them about what this really
means when they take into account the average cost of defense. When it comes to some professional liability
lines, defense costs can make up about 33 cents of every $1 of ultimate
loss. For comparison, $3M in coverage
with defense inside the limits may equal $2M with defense outside the limits. If defense is inside the limits – make a case
for increased limits with customers.
Liability Coverage – If customers don’t understand the importance of the
need for this coverage, they’ve probably been living under a rock. First party
damages from data breach notification requirements alone make this critical
coverage. Just because a customer
doesn’t think they need it shouldn’t stop your agency from offering it. (And if you are feeling uncomfortable right
about now because your agency hasn’t purchased a stand-alone policy, call your
Big ‘I’ state association and they can help you out. It’s really affordable and
Impairment Liability Insurance – Pollution exclusions can potentially
completely limit coverage for a customer’s most prominent exposure if not
carefully reviewed. In addition, the
expanding definition of pollutants, may open up the need and the opportunity to
sell environmental impairment coverage.
From the agency perspective this coverage may be technically challenging
to understand so work closely with your underwriter or broker.
Understanding customer operations and having a deep
knowledge of the products available will allow producers to increase revenue
while better serving their customers.
The above list coverages can often be overlooked and provide growth
opportunities. Depending on your state,
you may only have a legal duty to procure the coverage requested by the
customer, but doing a deeper assessment of their needs can ultimately close
gaps in coverage. And remember, just
because a customer doesn’t ask for a specific coverage doesn’t mean you
shouldn’t offer it. Let the customer
make the ultimate buying decision and document the file accordingly.
David Hulcher is AVP
of Agency E&O Professional Liability Risk Management for the Big “I”
Professional Liability Program. Visit
the E&O Happens website
for valuable agency E&O risk management information and tools.