SPECIALTY LINES MARKETS
More prospects with fewer markets
By Larry G. France
The construction of new condos is booming. Within blocks of the waterfront in downtown Toronto, units are selling before construction is completed. Individuals who work in the downtown section of most medium to large cities have found that condo living relieves them of hours of daily commutes. In some cases, residents don't even own automobiles, having discovered that monthly parking fees are astronomical, fuel costs are rising or, even more surprising, they no longer need to use their cars on a daily basis.
Condos also provide the opportunity to build equity. Bottom line; there is a market and the developers are responding.
Having said that, let's not forget that this present hard market is primarily being driven by property. With the terrorism threat, any new or existing high rise structure will draw underwriters' attention. Rates have risen dramatically on all types of property risks, with higher deductibles. Agents must adapt to today's market and how it functions. There are many ways to put together coverage for your clients. Captives and excess property are two.
Larry Harb of IT Risk Managers explains: "If you are an agent with a client who is a condo development owner with multiple locations, you may be looking for a way to lower premium cost. In the current hard market environment, the way to do this is with an excess or layered property program. By pooling all of the property under one policy, you can lower your client's total insurance cost."
An example would be five locations, each valued at $10 million for a total insured value of $50 million. The primary carrier can insure for $10 million, and the layered program will insure for $40 million excess of $10 million for a total insured value (TIV) of $50 million. "Because the layered carrier is in essence getting a $10 million deductible, the cost is of the $40 million layer is much less than if you were to purchase five separate policies of $10 million on each property. Often this excess layer is provided at a fraction of the cost of the primary and mirrors the coverage of the primary layer," says Harb.
Harb points out that a minimum underlying limit of $1 million is required. Limits of up to $100 million are available and in coastal areas there will be a wind, flood and quake exclusion on this coverage. (Check www.insurancemarketplace.com for "Windstorm (monoline)" and "seacoast properties (fire and windstorm)."
As in all lines of coverage today, a completed application is a must for a timely and accurate quote. Major underwriting concerns with liability are recreational areas, pools, playgrounds, golf courses, and waterfront areas. Security of the complex can be both a help and a hindrance. If there is a reliable hiring procedure and a good record, it's a good thing. On the other hand, a lack of prudent hiring practices with good background checks has produced a potential loss instead of preventing one.
For nonprofit community associations, which include condominium, home, property and master associations (which can have commercial exposure) as well as timeshares and cooperatives, D&O is necessary and, in some states, required by law.
Kenneth Laba, executive vice president of sales at Ian H. Graham, says: "In today's marketplace the carriers writing these risks tend to still be quite competitive without any capacity issues at all. Although most associations would prefer to hold the line at $1 million, which is the norm throughout the country at approximately 85+% of all risks, some associations have $2 million to $10 million or greater."
Laba says that on a national basis, claims experience is reasonably good. The most common concerns are: failure to adhere to bylaws, removal of board members (which stems from decisions of the board members, or lack thereof) on the aforementioned assessments and variances, and property damage issues from a defense standpoint. Discrimination, defamation and breach of contract are all quite common.
There are definite trends, which do take a severity turn. For example, claims associated with elections of board members (challenges to voting procedures), requested removal or reinstatement of individuals, etc., remain a lingering issue.
"Very clearly," says Laba, "The issue of mold, as many see it, is tomorrow's asbestos nightmare for these and related risks. It is typically excluded in one way or another, or soon will be."
Any client whose account is heavy in property coverage is going to find higher premiums, fewer options in regard to available markets, and possibly a decrease in policy enhancements. This market condition will most likely prevail until at least sometime in 2004.
The following firms responded to our survey and indicated that they can provide coverage for the condo/apartment market. Pay attention to the geographical areas of operation and target classes of business.
Atlantic Specialty Lines, Inc.
9020 Stony Point Pky., Ste. 450
Richmond, VA 23235
Contact: Greg Provenzo, Seth Johnson, Harper West
Phone: (800) 368-2095
Web site: www.atlanticspecial.com
An E&S broker operating with a focus on Mid-Atlantic states and FL, with limits that vary by carrier. Will write coastal--DE, MD and VA. Will also write property, Condo Association D&O, and GL. All carriers are A rated.
Burns & Wilcox, Ltd.
30833 Northwestern Hwy., Ste. 220
Farmington Hills, MI 48334
Contact: David J. Price, Exec. VP; Wayne Bates
Phone: (800) 521-1918
Web site; www.burnsandwilcox.com
An MGA/E&S broker that operates in all states except AL, HI, NY, TX and Puerto Rico with limits of $6,500,000 maximum any one structure. Target market is tenant-occupied condo complexes. Also written are D&O for associations, and DIC (earthquake/flood). Scottsdale, Lloyd's and Colony are the A rated carriers.
CNA Insurance Cos.
5950 Hazeltine National Dr., Ste. 650
Contact: Braishfield Associates of Florida, Delyn Passons, Ext. 114
Orlando, FL 32822
Phone: (888) 335-6616
Fax: (888) 335-6615
An MGU operating in FL, GA, NC and SC with GL limits of $1 million per occurrence and $2 million, general aggregate. Target markets are high-quality, well-controlled associations only. Will also write DIC. CNA is an A rated carrier.
Continental/Marmorstein & Malone
P.O. Box 586
Paramus, NJ 07652
William H. Malone Jr., VP
Phone: (800) 932-0849
Fax: (201) 261-8922
E-mail: bmalone@ca-group.com
Web site: www.ca-group.com
An MGA/E&S broker that operates in NJ and NY with casualty limits of $1 million/$2 million and property limits of $100 million. Target market is condominiums including coastal locations. Also offered are condominium association liability, D&O, umbrella, property, excess property, and garagekeepers liability. Carriers are Nautilus, USLI, FirstState, General Star, Lloyd's, Essex, Western World, and Tudor.
Creative Underwriters Corp.
140 E. Main St.
Carmel, IN 46032
Doug E. Setters, President; Gary, William and Dave Setters
Phone: (800) 769-4321
Web site: www.creativeunderwriters.com
An MGA/E&S broker operating in IL and IN; can recommend most property and liability limits. Target market is condominium owners associations. Can also write umbrella. Carriers are Western Horizons, Scottsdale, Lexington, and Lloyd's.
Crump Insurance Services, Inc.
7557 Rambler Rd., Ste. 350
Dallas, TX 75231
Contact: Sharon Ward
Phone: (800) 52-CRUMP
Fax: (214) 267-2692
E-mail: Sharon.ward@crumpins.com
Web site: www.crumpins.com
An MGA/E&S broker that operates in all states with limits of $50 million plus (higher and excess available). All classes are considered. Will also offer D&O including EPL. Various A rated carriers are used to place coverage.
Evolution Insurance Brokers Specialty (EIBS)
P.O. Box 4439
Sandy, UT 84091
Contact: Russ Sorensen, F. Darrell Lindsey
Fax: (800) 628-4634
E-mail: russs@eibdirect.com
fdl@eibdirect.com
Web site: eibdirect.com
An E&S broker that operates in all states with limits of $20 million and up. All classes are considered and all coverages are offered. Carriers are Prime, rated C; and Lloyd's, rated A.
Gateway Underwriters Agency
755 S. New Ballas Rd., Ste. 130
St. Louis, MO 63141
Contact: Mary Beth Fox
Phone: (800) 325-7652
Fax: (317) 567-4552
An E&S broker that operates in IL, KS, MO and NE with GL limits of $1 million/$2 million and property limits of $20 million. Will consider most classes, with D&O and umbrella also offered. Carriers are Scottsdale, Nautilus, USLI, Western World, and Lloyd's.
Gifford Associates
346 Moodie Dr.
Nepean, ON, Canada K2H8G3
Contact: Jim Mahood, Terry Markell
Phone: (800) 570-8770
Fax: (613) 596-6808
E-mail: Gifford@giffordhub.com
Web site: www.giffordhub.com
An insurance brokerage that operates in eastern Ontario, Canada, with limits of $50 million and up. Can offer D&O and environmental. Carriers are ING and CGU.
Griffin Underwriting Services
P.O. Box 3867
Bellevue, WA 98009
Contact: Jason Griffin, Ed Bolin, Lillian Nixon
Fax: (425) 453-8696
Web site: www.gogus.com
An MGA that operates in OR and WA with property limits of up to $10 million per occurrence. Can write D&O, EQ, DIC, property and GL. Various A rated carriers are used to place coverage.
Hull & Company, Inc.
2150 S. Andrews Ave.
Ft. Lauderdale, FL 33316
Contact: Chris Hull
Phone: (800) 678-4855
E-mail: info@hullco.com
Web site: www.hullco.com
An MGA that operates in CO, FL, MT and TX with limits of $1 million. Multiple A rated carriers are available to place coverage.
H.W. Gorst Co., Inc.
805 Fairmont Ave.
Glendale, CA 91203
Jennifer Clark
Phone: (800) 437-6616
Fax: (818) 507-1133
An MGA operating in CA only, with in-house limits of $3 million/$3 million. Scottsdale, Western Heritage and Colony are the A rated or better carriers.
Ian H. Graham, Inc. Insurance
16130 Ventura Blvd., #100
Encino, CA 91436
Contact: Joel Meskin, VP-underwriting; Sue Barochiere, umbrellas; Bonnie Keller, fidelity
Phone: (800) 621-2324
Fax: (818) 905-3948
Web site: www.ihginsurance.com
An MGA that operates in all states. Target market is nonprofit community associations. Can also offer D&O, crime/fidelity bonds, umbrellas (which are excess of the IHG/CNA D&O, GL, EPL and auto liability). CNA is rated A.
Insurance Innovators Group
130 S. Easton Rd.
P.O. Box 969
Glenside, PA 19038
Contact: Richard Marburg, VP
Phone: (800) 523-6422
Fax: (215) 886-2482
Web site: www.iiigroup.com
An MGA that operates in DE, MD, NJ, NY and PA with GL limits of $1 million/$2 million/$1 million, plus umbrella or excess. Property limits vary. Can offer D&O coverage. Various A rated carriers are available to place coverage.
Jimcor Agencies
60 Craig Rd.
Montvale, NJ 07645
Contact: Jennifer Dumont, Ext. 122; John Posa, Ext. 152
Phone: (800) 334-0474
Fax: (201) 573-8820
An MGA that operates in DE, NJ, NY and PA with limits as needed. Can include property managers E&O, and tenant discrimination coverage. All carries are rated A or better.
Leadenhall Insurance Brokers
120 Wall St., 5th fl.
New York, NY 10005
Contact: Emma Freedman, David Novok, Matthew Yallop
Phone: (212) 248-1150
An E&S broker that operates in all states with limits of $16 million. All carriers are rated A or better.
Lemac & Associates, Inc.
600 City Parkway West, #410
Orange, CA 92868
Contact: Sherri Gust, Bill Vecchio
Web site: www.Lemacga.com
An MGA that operates in CA only with limits of $1 million occurrence/DI/AI/products; $2 million general aggregate. Can offer GL for homeowners associations for condominiums. All carriers are A rated.
Market Finders Insurance Corp.
P.O. Box 6549
Louisville, KY 40206
Contact: Karen Cornett, Susan Hudgins, Charlene Curry
Phone: (800) 626-5660
Fax: (502) 426-7970
E-mail: info@mfic.com
Web site: www.mfic.com
An MGA/E&S broker operating in IN, KY, OH, NC, SC, TN and WV with GL limits of of up to $1 million/$2 million, plus excess and property limits of up to $5 million, plus excess. Admiral, Lloyd's, Century Surety and First State are the carriers.
Metro Insurance Services, Inc.
950 Stuyvesant Ave.
Union, NJ 07083
Contact: Steven R. Gross
Phone: (908) 688-3088
Fax: (908) 686-6275
E-mail: info@metroins.com
Web site: www.metroins.com
An MGA/E&S broker operating in NJ, NY and PA with GL limits of $1 million/$2 million and property limits of $50 million. Target market is all condos and apartments. Umbrellas are available up to $50 million. Diamond State, Lloyd's, Royal Sun Alliance, United National, and Burlington are the A rated or better carriers.
Midwestern General Agency, Inc.
255 NW Blue Pky.
Lee's Summit, MO 64063
Contact: Joseph D. Timmons
Phone: (800) 788-4347
Fax: (816) 246-1290
Web site: www.mgakcmo.com
An MGA/E&S broker that operates in IA, IL, KS, MO and NE with limits of up to $20 million. Can offer D&O. Lloyd's, Scottsdale, Essex, and Nautilus are the carriers.
M.J. Kelly Co., Inc.
4415 E. Sunshine
Springfield, MO 65809
Contact: Roger Wilkinson, Lori Drake
Phone: (800) 725-7211
Fax: (417) 883-7103
Web site: www.mjkelly.com
An E&S broker operating in AR, IL, KS, MO and OK with various limits. Most competitive on risk w/property limits under $3 million. Can also offer property, GL, D&O and umbrella. Various carriers are used to place coverage.
NXS Excess & Surplus Lines Brokers
P.O. Box 3490
Morehead City, NC 28557
Contact: Caroline Pate
Phone: (800) 949-0307
Fax: (252) 726-2855
Web site: www.nxsbrokers.com
An E&S broker that operates in FL-NJ on the East Coast with limits of up to $1.5 million coverage on contents. Target market is coastal (eastern seaboard). Can offer additions & alterations, flood, quake, loss of use, and loss assessment. Lloyd's is the carrier.
Philadelphia Insurance Companies
One Bala Plaza, Ste. 100
Bala Cynwyd, PA 19004
Contact: Sean Sweeney, Marisa Burke
Phone: (800) 873-4552
Fax: (610) 227-2212
E-mail: mburke@phlyins.com
Web site: www.phly.com
An insurer that operates in all states except AR, IA, KS, MO, NE and OK with limits of $3 million aggregate; umbrella limits of up to $10 million. Will not write apartment buildings or condos built before 1980. Can also offer employee dishonesty, reward reimbursement, sewer & water backup coverage for loss of condo fees. Philadelphia Indemnity is an A rated or better carrier.
Prime Insurance Syndicate Inc./I.E.B.S.
311 S. Wacker Dr., #3360
Chicago, IL 60606
Contact: Emanelle Mercado
Web site: www.primeis.com
An insurer that operates in all states with limits of $20 million and up. Will consider all classes. Carriers are rated C through A.
Reich Insurance Associates
655 Shrewsbury Ave.
Shrewsbury, NJ 07702
Barry Reich, President; Elena Goldstein; Renee Glenn
Phone: (732) 758-0073
Fax: (732) 758-0074
E-mail: breich.riamga@verizon.net
An MGA for the NorthEast Coastal Condominium Program and the Coastal Homeowners Program. Operating in DE, MD and NJ with varying limits. Target market is coastal condominium associations and coastal homeowners risks. Can offer a condominium package policy. Lexington and Landmark are the A rated or better carriers.
Roush Ins. Services, Inc.
P.O. Box 1060
Noblesville, IN 46061
Contact: Gabe Derzhavets, Jerry Roush, Scott Sackers
Phone: (800) 752-8402
Fax: (317) 776-6891
Web site: www.roushins.com
An MGA that operataes in IL, IN and OH only, with in-house liability limits of $3 million and property limits of $1 million (higher limits available). Can offer inland marine for maintenance equipment. Century Surety, Evanston, Associated International, Reliant American, and Scottsdale are all rated A; Atlantic Casualty is rated B+.
Russell Bond & Co., Inc.
295 Main St., Ste. 866
Buffalo, NY 14203-2595
Contact: Michelle Dimartile
Phone: (800) 333-7226
Fax: (716) 856-0403
E-mail: mdimartile@russellbond.com
Web site: www.russellbond.com
An MGA that operates primarily in NY (other states depending on risk), with no limitation on limits. Target market: minimum personal property--limit of $40,000; will consider risks with claim problems, dog exposures, seasonal, secondary, co-ops. Can also offer umbrella and condo associations D&O. Chubb and US Underwriters are the A rated or better carriers.
S.H. Smith & Co.
41 N. Main St.
West Hartford, CT 06107
Contact: Jeff Parmenter, Lisa Brunelle
Phone: (800) 356-0168
Fax: (860) 561-3606
E-mail: jeff@shsmith.com lisa@shsmith.com
An MGA/E&S broker that operates nationwide with limits of up to $25 million. Target market is owner-occupied condominiums. Can offer property and liability, plus D&O liability. Admiral, American Empire, Chubb, Indian Harbor, Crum & Forster, Royal, AIG, and Lloyd's are the carriers.
The Distinguished Programs Group
6 E. 43rd St.
New York, NY 10017
Contact: James A. Tesorieso
Phone: (888) 355-4626
Fax: (212) 297-3146
E-mail: jtesoriero@distinguished.com
Web site: www.distinguished.com
An MGA that operates in all 50 states with CGL limits of $1 million/$2 million, property limits of up to $25 million per location, and umbrella of up to $110 million. Can offer D&O, crime, and law limit umbrella. Kemper and Chubb are the carriers.
United Brokers, Inc.
P.O. Box 1243
New Albany, IN 47151
Contact: Crystal Burns, Ext. 112
Phone: (800) 444-4824
Fax: (812) 949-4015
E-mail: crystalb@ubinc.com
Web site: www.ubinc.com
An MGA that operates in GA, IN, KY, MO, OH and TN with limits of up to $5 million. Can offer GL, property, umbrella, and PL. Penn America, Colony, Markel, and USLI are the carriers.
U.S. Risk Underwriters
10210 N. Central Expy., Ste. 500
Dallas, TX 75231
Contact: Betty Prah, Donna Pace, Karen Tanner
Phone: (800) 232-5830
Web site: www.usrisk.com
An MGA operating in TX only, with GL limits of $1 million/$2 million/$1 million and $3 million property. All carriers are A rated or better.
Western World Insurance Co.
400 Parson's Pond Dr.
Franklin Lakes, NJ 07417
Contact: Timothy P. Hochkeppel, VP
Phone: (201) 847-8600
Fax: (201) 847-1010
Web site: www.westernworld.com
An insurer that operates in all states with limits of $1 million/$2 million. Will offer GL and property. Western World and Tudor are the A rated or better carriers.
Yates & Associates Insurance Services
2100 E. 4th St., 2nd fl.
Santa Ana, CA 92705
Contact: Bill Duncan
Phone: (800) 660-1125
Fax: (714) 550-5051
Web site: www.yates-assoc.com
An MGA that operates in 11 western states with limits of $5 million. Can offer condominiums, homeowners associations, planned unit developments, etc. The admitted, A rated carries are Fireman's Fund, Markel, Carolina Casualty, Executive Risk, Scottsdale, and Great American. *
