Over my 29 years, I have learned a few things and I would like to share some of those items with you. Take them or leave them, they may help you out too.
- Take a little time to learn about the prospective account. I have worked on many accounts where the “story changed” two or three times before getting down to what the account really did. It is tough when a rush item is sent in, then going back and forth with the underwriter after the “story changed” when we asked more questions. This causes the underwriters ears to “perk up” and they feel they need to dig deeper in order to have a comfort level.
- Sometimes coverage is available on admitted paper. Do not assume just because you are going to s surplus lines broker that they will always use non-admitted paper.
- Find out what endorsements you will need up front. This includes waiver of subrogation, primary and non-contributory wording, additional insureds, blanket additional insureds, stop gap liability, Employee Benefit Liability and per project aggregates. It is easier to ask for these items up front and get them included in the pricing, rather than ask for them later. Sometimes carriers cannot offer these and if they are required, we can move on to another carrier and not waste time. Keep in mind also that most carriers in the E&S business charge EXTRA for these endorsements.
- Read through the terms and conditions and ask for specimen copies of endorsements if you believe the endorsement/exclusion may be an issue. That way you can inform your client where their coverage starts and ends. There are times exclusions can be “bought back”, so it can’t hurt to ask.
- Different carriers use different premium basis. For contractors, some rate based on payroll and other base premium on receipts. Some other base them on the number of owners and number of employees. So make sure you include ALL of the potential premium basis when sending in a submission. Keep in mind to break out owner payroll, clerical and sales payroll from the rest of the payroll. A number of classifications exclude this payroll and that can help bring the premium down. If fact, you may even want to do a three year look back on their payroll and see if they have been over charged. I know of one such account that when we did this, we were able to get the insured $200,000 in return premiums! Think they were happy?
- One more note on payrolls. If your insured is doing a hazardous operation, such as say demolition, it would behoove you to break out the payroll by classification. So for a demolition contractor, how much payroll actually goes to the demolition classification? Should part of the payroll go to trucking (trucking the debris away), some to backfilling or grading of land (filling in the basement), some to debris removal… etc… you get the idea. That way the proper amount goes to the highest rated classification.
- Certain classes of risk require supplemental applications. Contractors require a contractor’s supplemental application. Restaurants, bars and taverns require a hospitality supplemental application. Apartments require a habitational supplemental application. Find a comprehensive one you can use and be consistent.
- If you can, try to determine the proper ISO classification. This alleviates the chance the underwriter will use the wrong one. Many E&S carriers have manuals that break out the specific ISO classification and make it within binding authority (for the MGA), submit or prohibited. So if they pick the wrong classification, the risk may be declined.
- Just because you are “going E&S” doesn’t mean that you can ask for the endorsements or coverage you believe the clients need. You may get a quote with more restrictive coverage, but at least you asked for more expansive coverage. Many markets can add expanded GL or property endorsements or some of the “fringe” coverages you need.
- Websites – Nearly ALL underwriters will check out a risks website, so you might as well too. That way you can explain any disparities between the application and the website upfront.
- If you know prospective pricing, let us know. We can quickly tell you if the expectations are unrealistic and save both of us a lot of time.
- Narratives are appreciated. They become “rare” anymore and a submission with a good narrative actually stands out from the crowd.
- We like to know what happened to the account… Many times we get in a rush submission, pull out all the stops.. send out a quote.. and never hear anything again…. We like to know what happened to a risk if we didn’t write it so we can find out what we did wrong or if our markets are not competitive.
I hope sharing some of these “tricks of the trade” will help you out. I would appreciate hearing about some of the things you found out in this business that have helped you along the way.
Kenneth Kukral, CIC – VP of Special Risks – That means, call me if you need help on placing a unique, difficult, large or more complex risk. Kennethkukral@intlxs.com 800-937-3497 ext 2079