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NEW DAY SUCCESS STORIES PROFESSIONAL LIABILITY Design/Builder with a Twist – Due to the insured manufacturing, designing and constructing their product (large modular containers), the professional liability marketplace was unwilling to offer a competitive program insuring the risk appropriately. New Day was able to access relationships in the environmental marketplace to get a carrier to make an exception on the risk. Working with the carrier on various coverage issues and exclusions, they accepted various form modifications. The result – an extremely aggressively priced $5 million professional and pollution program that addressed their coverage needs and included coverage for mold liability. Contractor with Claims – This particular $1 billion revenue contractor had a number of significant professional liability claims over the course of six years. As a result, the account had no professional liability carrier alternatives for years. New Day was engaged early in the renewal process. Assessing the claims, the current program and the internal changes made to improve on their loss history, New Day was able to demonstrate to a number of markets that even though there was still residual exposure, it was minimized and the risk today was a better risk than in previous years. The producing agency provided a broker of letter to the incumbent carrier authorizing New Day to negotiate renewal terms. In addition, New Day provided two additional options. The end result was the construction firm was able to double their limits – move from $5 million to $10 million at the same cost as the lower $5 million limit with the incumbent. Environmental Firm – New Day was tasked to replace the current carrier on a $25 million revenue environmental services firm. While claims were an issue on this account, the firm focused their efforts to correct internal administrative flaws and spent tens of thousands of dollars on attorney’s fees to improve their contract administration. New Day felt that this was a key component to convincing other carriers that this was a solid risk. New Day was able to replace the existing carrier and increase the limit of liability from $2 million to $3 million AND reduce the premium by $50,000. Contractor with Combined Contractors Pollution Liability/Professional Liability – New Day was engaged on the renewal of this coverage which had been with the incumbent carrier for several years. Based on New Day’s review of the policy and knowledge of the marketplace, it was determined that the best coverage would be afforded by the incumbent since they were offering older endorsements that are not currently available. For example, the carrier attached a “Superfund Liability” endorsement. This provides coverage for the named insured in the event they are identified as a PRP on sites that are added to the National Priorities List or Superfund list after 1997. Considering there are numerous sites still under investigation, this is valuable coverage that is not duplicated – even by the incumbent carrier - on new business. Although it had only one enhancement, New Day quickly recognized the scope of overall coverage as not being able to be improved. This saved our partner broker a significant amount of time and effort in negotiating with the incumbent or with other potential markets. Heavy Highway/Bridges/Transit General Contractor – New Day had been requested work on a Contractor’s Pollution Liability (CPL) and the Pollution Legal Liability (PLL). However, we were also able to assist our broker in winning back the professional liability, which another broker won away the year before. New Day reviewed the London professional policy, pointing out coverage deficiencies, assisting in the sales process and delivering a cost effective program with a domestic carrier that expanded coverage. General Contractor/Construction Manager – The existing coverage - Combined Professional Liability (PL) and CPL - had various coverage limitations. New Day was able to create a program for this $155 million revenue firm that expanded coverage – mold and silica coverage for professional and pollution, expanded the professional liability insuring agreement to include alleged acts, errors or omissions (previous insuring agreement had a strict negligence trigger – meaning that client needs to prove you were negligent before it responds). New Day was able to secure mold liability coverage without a mold prevention program at the full $5 million policy limit. New Day negotiated 90 days to provide the mold program to the carrier. New Day provided guidelines and a template that client used to create their mold program. The guideline and template (which is available on the risk management services section of the New Day website) offered the insured a means to document their mold risk management and buy the proper insurance. Heavy Construction/General Contractor – The insured was paying about $55,000 for the Contractors Pollution Liability program. New Day performed a policy review and felt it was over-priced. New Day structured a program with another carrier that broadened coverage and reduced the premium by approximately 40%. While our goal was to provide better coverage we were able to reduce the premium at the same time. It was apparent to us during our review that alternatives existed. With New Day knowledge of carriers’ risk appetites it allows our brokers to be more efficient and effective. Top 25 ENR Environmental Firm – Our client controlled one of the top 25 ENR Environmental Firms. Although the program had been marketed in the past, our client was not sure if 1) They were missing any other markets that could replace the current carrier, or 2) Was the current carrier tabling a program that is commensurate to other firms of similar size and scope of services – the producer needed us to play the role of advocate. New Day was engaged of assessing the current program, claims history and scope of services. In New Day’s review, New Day had found a number of ways the insured could enhance the coverage under the incumbent carrier’s program. Our client received the advocacy they needed enhanced coverage and was able to efficiently market the program to the incumbent and other carriers. (New Day was engaged in a consulting role on this engagement) POLLUTION LEGAL LIABILITY Developer – The client was refinancing hotels and Pollution Legal Liability (PLL) was required by the lenders for the refinancing. The deal had to be closed in 5 days or less. PLL was truly holding up the transaction. There were a total of 6 hotels in all. The property with the worst risk characteristics only had minor environmental issues so with the focused effort of the client (getting us the information we needed) New Day was able to obtain the proper coverage with a major environmental carrier and bind coverage within a week. The property owner was extremely impressed with our clients’ ability to get the deal done in the time frame required. Natural Gas Processing – The insured was involved in a $105 million transaction. New Day assisted our broker with knowledge of the carrier marketplace and with experience in property transactions. The broker helped qualify the opportunity by identifying the buying drivers. Utilizing this information New Day was able to identify the carriers that could respond to what the client needed. Negotiations quickly narrowed to a single carrier who delivered the proper coverage at the price for the insured. With New Day’s assistance the underwriting timeframe was shortened significantly and a 10 year, $20 million Pollution Legal Liability program was closed. Commercial Office Building – The insured was purchasing a commercial office building in a major western city. During the environmental due diligence it was determined that the structure contained lead in various systems and components of the structure. The insured wanted to purchase Pollution Legal Liability during the remediation of the lead abatement. This retail broker engaged a “wholesaler” to go to the marketplace. With its limited understanding of the market, the wholesaler/retailer team was unsuccessful in finding a solution for the insured. When the retail broker (our client) came to New Day, we had structured a $20 million program with two major environmental carriers (Follow form excess program) in 30 days. Industrial sites – Our broker had already started negotiations for Pollution Legal Liability directly with the carrier for their client involved in a transaction of 16 properties. The broker became frustrated with the underwriting process and lack of results. New Day was engaged by the broker and New Day was able to complete the negotiations, broaden the scope of coverage and remove certain limitations out of the program that were unacceptable to the insured and their financing sources. Property Transaction – Our broker approached New Day with a need for a $10 million, 10 year Pollution Legal Liability program in the state of California for a “refi” project. The risk was a 2 acre strip mall. It appeared to be a simple placement. However, the strip mall leased space to a dry cleaning operation that had been in their space for 10 years. Most of the major carriers declined without consideration to the contents of the Phase I report. If they did not decline they applied a PCE exclusion - primarily due to their experience on past properties. New Day also accessed other obscure markets with which we had a good relationship. Working with one of those markets we were able to meet the $10 million, 10 year requirement AND the program was structured with on-site cleanup and third party liability with no exclusionary language.
OWNER’S PROTECTIVE PROFESSIONAL INDEMNITY School District. Our broker came to us looking for an alternative to project professional liability. The school district required $1,000,000 in professional liability limits from all design professionals (DP) but never created a comprehensive insurance specification for their contracts to ensure that there were no unwanted exclusions attached to the DP’s policies. There were numerous upgrades to all types of primary school buildings as well as 3 brand new structures to be built. Construction vales totaled $127 million. New Day was able to develop a “blanket” program for all projects under an Owners Protective Professional Indemnity (OPPI) program. It supplemented the available coverage of the DPs in addition to providing Difference in Coverage (DIC) over the DP’s programs. The OPPI was structured for a $5 million limit with a 5 year policy period and 3 year extended reporting period. The cost was about $300,000 and included mold and contractors pollution endorsements. Commercial Real Estate Owner. Our broker’s clients had six commercial grade condominium projects slated to start over a 6 - 8month period. Three of the projects were in California and the other three were in three separate states. A major concern of the insured was cash flow – if they bought a project professional liability program they would pay the premiums up front, and there was still uncertainty with the start dates as the increase in material costs might cause delays. Total construction values were $370 million. Working with underwriters New Day create a shell OPPI program – incepting the policy with the first project and then set a premium rate for the others that were to be added during the first year of the policy for additional premium. This allowed the owner to pay for the coverage when the project began which provided cash flow advantages. The program was structured with a $10 million limit, including mold and contractors pollution endorsements, with a term of 3 years (an additional year was negotiated to offer more flexibility) with a10 year Extended Reporting Period (ERP) option for $2.1 million premium. Commercial Office Building. The building owner was doing $35 million renovation project in New York. The premium for the project professional liability was determined to be approximately $250,000. New Day introduced the broker to the OPPI concept, created a $2,000,000 limit program with contractors pollution and mold coverage for approximately half the cost of project professional liability policy. The owner was attracted to the cost savings and they realized there were many other benefits:
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