Fireman's Fund broadens GL, commercial auto policies
Fireman's Fund Insurance Company introduced broadening endorsements to its general liability and commercial auto policies. The endorsements--MultiCover for general liability and FleetCover for commercial auto--contain a total of 40 enhancements, including a Blanket Additional Insureds feature designed to simplify the process of covering additional insureds.
The Blanket Additional Insureds feature of the endorsements "automatically extends coverage when required by an insured contract, eliminating the need to process endorsements for a wide variety of lessees, lessors, vendors, contractors, etc.," said Tanya Sullivan, vice president of Fireman's Fund Commercial Insurance Division.
Both the MultiCover and FleetCover endorsements also broaden the definition of Named Insured to cover any new entities acquired by the customer.
FleetCover also automatically covers a client's hired autos for physical damage when they are similar in kind and use to owned autos covered for physical damage.
MultiCover has a clause for non-employment discrimination liability that covers certain situations when an employee discriminates on the basis of race, color, ethnic origin or religion.
The endorsements were introduced following a survey of agents and brokers who were asked about the importance of these coverage issues and what changes they would like to see. In response to agent recommendations that the endorsements not contain any hidden exclusions, Sullivan said the endorsements "complement and broaden the ISO CGL and commercial automobile coverage."
Multicover is available in all but three states on an admitted basis. FleetCover is available in 44 states and the District of Columbia with six states pending.
ITT-Hartford changes name to The Hartford
ITT-Hartford, which became an independent publicly-owned company after its spin-off from ITT Corp. in December 1995, has changed its name to The Hartford. The company's name change was prompted by research conducted last summer which showed that the business and financial communities, insurance agents and consumers were confused about who owned the company. Additional research revealed that most people widely referred to the company as "The Hartford."
Company shareholders will vote on the name change in May. The company's stag logo will be retained with slight modification.
The Hartford is 186 years old. In 1970 the company was acquired by ITT Corp., which owned it for 25 years. The Hartford is the nation's seventh largest property-casualty insurer and eighth largest life insurance group.
St. Paul's bank program pays dividend
St. Paul Fire and Marine Insurance Company paid a 6.1% dividend to banks insured under the company's property-casualty program for members of the Independent Bankers Association of America (IBAA). The almost 800 banks in the program will share a total of $635,246.
St. Paul has been the endorsed carrier of the IBAA, which represents 5,500 community banks in the United States, since 1983. During that time St. Paul has returned more than $7.3 million in dividends to participating banks, an annual average of 10%.
Coverages available under the program include property-casualty, bonds, and directors and officers liability. St. Paul provides property and liability insurance to more than 2,000 financial institutions with assets ranging from $2 million to more than $100 billion.
RLI raises limit for personal umbrella
RLI has added the option of a $3 million limit to its personal umbrella policy. RLI's umbrella is available on a standalone basis over many other insurers' underlying homeowners and auto policies.
The $3 million limit became available February 1 for new business in 43 states and the District of Columbia. It became available March 1 for renewals. The policy is available with $1 million or $2 million limits in most states. It is offered in all states except California and New Jersey.
Study shows decline in cost of handling risk
The cost of handling risk dropped by 11% in 1995, its third consecutive year of decreases, according to a study published jointly by Tillinghast-Towers Perrin and the Risk and Insurance Management Society (RIMS). The decline in the cost of risk index was led by decreases in workers compensation costs.
The study's publishers said, "Overall liability, workers compensation and property costs declined. The cost decreases seem to reflect a competitive insurance market, heightened safety and loss control measures, aggressive claims management and more efficient administration."
The data for the study came from 720 U.S. and Canadian companies having an average risk management staff of 4.6 employees and an additional four full-time staff members from other departments who handle risk management functions.
The cost of risk index is made up of property-casualty insurance premiums, including workers compensation; retained/uninsured losses; risk management/insurance department administrative budget; costs for outside services, including broker/agent fees, outside consulting and actuarial fees, risk management information systems and captive management costs.
The cost of risk index has declined a total of 22% over the past three years. Over those three years the workers compensation index declined 36%. In 1995 workers compensation dropped 13.5% to $2.44 per $1,000 of revenue.
Liability costs decreased 2% to $2.50 per $1,000 of revenue. Frances Oliver, a member of the RIMS Research Committee, noting the small decrease in liability costs, said, "This could be an indicator that the liability cost index may be bottoming out."
The study is available for $300 from Tillinghast-Towers Perrin. Phone (203) 326-5400.
The Hartford enhances small business package
The Hartford Group has broadened its Spectrum package policy for small to mid-sized businesses by including new features and extending eligibility to 30 new classes of business. Spectrum is designed for businesses with less than $5 million in sales.
The enhancements include:
* new built-in features as well as expansion of existing features. These enhancements apply both to the base policy and the Stretch endorsement.
* new options including a special Building Stretch for building owners.
* the addition of 30 classes of business.
The base policy includes equipment breakdown coverage and income protection for up to 12 months. Spectrum provides automatic coverage for many different kinds of equipment including computers, scanning equipment, phone systems, air conditioners, refrigeration systems and others.
The policy also covers any loss of business income as a result of an equipment breakdown.
According to The Hartford, the importance of the small business market is evident from a Small Business Administration study which shows that 98.4% of businesses employ fewer than 100 people, and 89% have fewer than 20 people.
Spectrum, which tailors coverage to about 300 individual classes of small businesses, was first introduced in 1980. The enhanced version of the policy will be available in most states by the end of the year and in Canada in 1997. It will not be available in Hawaii, Alaska or Puerto Rico.
AIG introduces monoline employment practices policy
National Union Fire Insurance Company, a member of American International Group (AIG), introduced a monoline employment practices liability policy (EPLI) with coverage on a claims-made basis and liability limits up to $50 million. It provides coverage for claims alleging discrimination, sexual harassment or wrongful termination.
If EPLI insureds also hold National Union's directors and officers coverage, the EPLI policy's aggregate limit can be separate or shared with D&O coverage limits.
EPLI protects the corporate entity, its subsidiaries, directors, officers and employees. The policy also features provisions for a three-year extended reporting period, coverage of prior acts, E.E.O.C. administrative hearings, as well as pre- and post-judgment interest.
National Union continues to offer employment practices coverage as an endorsement to its public company D&O coverages, or as part of its private company D&O policy.
EPLI policyholders also automatically received EPL Paksm, a range of employment practices loss prevention products and services from several leading employment practices law firms. The services include an initial, half-hour consultation with leading labor and employment attorneys; an employment practices self-audit guide; seminars and publications; and a fixed price legal review and analysis of the insured's employment practices policies.
For more information call Ty Sagalow: (212) 770-6642.
ISO study discusses problems of commercial UM/UIM laws
The Insurance Services Office (ISO) issued a study of uninsured motorist (UM) and underinsured motorist (UIM) coverages for the commercial market which sorts out some of the complex issues affecting these coverages. The study points out some of the differences between UM/UIM coverages for the commercial and personal markets and attempts to clarify issues for legislators, regulators, insurers and the public to consider.
Problems are created by state laws and court decisions which do not distinguish between personal and commercial UM/UIM coverage, according to the study. For example, while the stacking of limits is one of the most widely litigated issues in court cases involving UM and UIM coverages, the courts have been largely silent on how their decisions apply to commercial auto.
"Stacking can be particularly problematic for commercial auto insurers since policies can cover fleets of vehicles," said ISO Vice President Kevin Thompson. "When intrapolicy stacking applies, the limits are multiplied by the number of vehicles on the policy, and the potential award can be many multiples of the original policy limit."
According to the study, 10 jurisdictions currently require both interpolicy and intrapolicy stacking, and another eight require interpolicy stacking only. In the remaining states, either stacking does not apply, or the courts have not addressed the issue.
The study identified other significant issues for commercial auto insurers, including: the variation in state laws concerning the rejection of UM/UIM coverage; the impact of a state's no-fault coverage on rates; the definition of "family member"; the protection of the UIM insurer's subrogation rights; and the difficulty of pricing UM/UIM coverages due to the wide differences in state laws that preclude a countrywide data base.
The study points out that seven states changed their UM/UIM laws in the first nine months of 1996.
Zurich-American raises capacity for Executive Assurance
Zurich-American Specialties, a strategic business unit of Zurich-American Insurance Group, increased its capacity to $50 million for its Executive Assurance products. Those products for large U.S. corporations include directors and officers, fiduciary liability and crime coverages.
Reliance alters distribution of moving/storage programs
Reliance Specialty, a division of Reliance Insurance Company, will distribute its products and services for the moving and storage business directly to Reliance agents and to agents with large blocks of moving and storage business (in the $500,000 premium range). Previously this business was handled through a managing general agent.
Reliance Specialty's coverage for this market includes:
* property--warehouses, offices and personal property;
* liability--premises and operations, products, medical payments and contractual liability;
* business--income, extra expense, accounts receivable and valuable papers;
* vehicles--company-owned and owner-occupied; and
* crime--money and securities, and employee dishonesty.
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