In the past several months, we have brought to you account profiles that highlight new business accounts dealing with complex issues or unique insureds. This month, we would like to focus on a renewal account to demonstrate how in many cases the same attention to detail and knowledge of the marketplace should be considered when working with a renewal—not all of them are automatic renewals or easy accounts to keep!
We recently worked with an agent representing a company who specializes in the process design, engineering, and supply of solvent recovery systems, scrubbers, and fans. The company also manages the design and engineering of synthetic resin manufacturing plants. This year at renewal, they were seeking a combined General Liability/Contractors Pollution Liability/Professional policy and a separate Follow-Form Excess policy, to renew on August 1st. The expiring receipts were $2.5M and the insured was projecting $3M for the upcoming fiscal year. However, they were also awarded a large job in Italy that was expected to generate an additional $15M in receipts (for a total of $18M).
Unfortunately, the large amount of foreign work did not fit the underwriting guidelines for the incumbent carrier. They were able to offer renewal terms based on the $3M in projected receipts for work that would be done in the United States, but would not be able to cover the $15M project in Italy and would have to add an exclusion to the policy for this job. After speaking with a few other markets, we were able to find a carrier that could add a worldwide coverage endorsement and write a policy that included this job, based on $18M in projected receipts.
The insured bound coverage with the new carrier; since the project does not start for a few months, the carrier provided an additional premium, which is good for 60 days. When all details are finalized in the project contract, the insured will provide the official start date and the carrier will endorse both policies to increase the amount of projected receipts to include this project and charge the additional premium. The carrier also agreed to increase the Excess limits when the project begins to comply with the limit requirements for the job.
The premium breakdown is as follows:
- General Liability/Contractors Pollution Liability/Professional policy with $2M/$2M limits.
- $10,000 deductible
- Worldwide Coverage Endorsement
- Based on $3M in projected receipts = $41,798 in premium
- Additional premium to add the Italy job and increased projected receipts to $18M = $93,760.
- Follow-Form Excess with a $1M limit = $5,293.
- Additional premium to add Italy job, increase the projected receipts on the primary policy to $18M and increase Excess limits to $2M to comply with contract requirements = $25,368.
This is another example of an account that may not be a fit with one carrier, but may be perfect for another. It is important to work with a wholesale broker that knows the available markets, especially for a challenging account, or one that has “grown out of” its current carrier. This particular underwriter’s flexibility and knowledge of the overall risk ultimately won them the account and allowed the insured to comply with the insurance requirements for an extremely large and unique project. We were able to meet the insured’s immediate needs by renewing coverage based on the jobs they currently have and plan for growth with the upcoming job.
For more information on the products we offer, feel free to call us at 1-800-596-2156 or email us.
