INSURANCE MARKET UPDATE
A recent survey of 300 privately held companies indicates that nearly two in five believe that it is likely their directors and officers will be sued by shareholders, customers or vendors in 2004. According to The Chubb 2004 Private Company Risk Survey, executives at 37% of the companies surveyed anticipate that customers will sue their directors and officers in the coming year, while 30% believe that they will be sued by vendors and 21% fear that shareholders may sue.
According to the same survey, 18% of private companies report that the company or its directors and officers were sued by customers during the past few years. Seven percent of the companies surveyed report being sued by vendors and 6% report being sued by a shareholder.
More than 30% of the companies surveyed said Sarbanes-Oxley has a direct or indirect effect on private companies. The act has redefined corporate conduct and the relationship between directors, officers, accountants, attorneys, and analysts. Although the legislation was intended for publicly traded companies, legal experts say that many of the standards it sets are now being applied to private and nonprofit companies. The majority of the respondents (54%) reported they were not sure what impact Sarbanes-Oxley or similar legislation at the state level had on their companies.
The survey also shows that many private companies appear to be responding to the growing threat of lawsuits against their companies and directors and officers. Of the companies surveyed, 36% plan to conduct a risk assessment of executive protection-related exposures, including directors and officers liability, in 2004. Also, 36% of the companies report that they have a published corporate governance program already in place.
ICBA, Iroquois Group form P-C alliance
The Independent Community Bankers of America and the Iroquois Group announced a strategic alliance under which ICBA members' property/casualty agencies will gain access to the more than 75 insurance companies represented by Iroquois Group. The alliance establishes the first program under ICBA Insurance Services, ICBA's new insurance corporation. Iroquois Group is a network of more than 1,350 independent agencies in 34 states.
LIG Marine launches two new programs
LIG Marine Managers introduced two new programs: the Stock Throughput Program and the Marine Contractors Package Program.
Stock Throughput is a combination of ocean and inland cargo with worldwide "location" coverage in a warehouse or manufacturing premises. The coverage is most applicable when the cargo is carried on a round trip or when multiple stops are made along the way. The minimum premium is $25,000, and the policy is written on an annual basis with typically annual or quarterly adjustments.
The Marine Contractors Package Program is designed for marine contractors who work on vessels or build docks and/or seawalls; stevedores; ship repairers; wharfingers/landing owners; marine terminal operators; passenger vessel operators (harbor types), and related marine industries. Mandatory CGL (occurrence form) including products/completed operations is covered. Options are: ship repairers legal liability, stevedores liability, terminal operators liability, wharfingers liability, tankermans liability, protection and indemnity (excluding crew and cargo), hull and machinery, and equipment. Available limits are $1 million per occurrence/$2 million aggregate with excess coverage available. The minimum premium is $25,000; this can be reduced to $10,000 when coverage is written in conjunction with other lines.
Information and applications are available at LIG's Web site (www.LIGInsurance.com).
NIF offers new public entity program
A new public entity program has been introduced by NIF Risk Management, Manhasset, New York, in partnership with the Alternative Market division of American Re-Insurance Company. This program is for large public entities, including state and local governments, as well as special districts, including water and housing, and public and private educational institutions.
Premiums start at $200,000 and retentions start at $100,000 on all lines except excess workers compensation which requires a retention level of at least $350,000. If the insured is interested in aggregate stop loss coverage, it can be made available for an additional premium. The lines of coverage available are general liability; auto liability and physical damage; educators legal; law enforcement liability; public officials' liability, property; crime; EPLI; and excess workers compensation. Limits of $5 million are available. The underwriting process requires 60 days. A TPA of the insured's choice can be used as long as it is qualified by the company.
More information about the pro-gram is available at www.nifgroup.com or by contacting Nancy Williams, Director of Marketing, NIF Group, Inc., at (800) 892-8892.
Hartford enhances truck equipment program
The Hartford added an endorsement it calls SPICE to its Specialized Truck Equipment Program® (STEP) that expands the policy's coverages to add: extra expense coverage with $25,000 limits; lock rekeying or replacement with a limit of $10,000; and coverage for newly acquired or constructed property or buildings with a $2 million limit. The endorsement also increases some existing limits: employee dishonesty coverage from $15,000 to $100,000; forgery/monies and securities from $15,000 to $25,000; and utility services from $15,000 to $90,000. The endorsement also covers losses while customers' vehicles are in the insured's care, custody, or control and while recently outfitted vehicles are held for sale or are in transit. The insured's demonstration vehicles are covered while at exhibitions.
STEP is a multiline program for manufacturers, distributors, installers, and repairers of specialized truck equipment.
AIG Private Client Group will check domestic staff backgrounds
AIG Private Client Group, a division of the property and casualty insurance subsidiaries of American International Group, Inc., will provide policyholders who employ domestic staff with access to background investigations at no cost. Kroll Inc.'s Background Screening Group, a provider of employee and vendor screening services, will conduct the investigations.
Once written permission to conduct a background investigation has been obtained from the current or prospective employee, Kroll can offer a policyholder information about that individual including verification of identity and address history; confirmation of educational background; verification of complete employment history and professional licensure; and searching capabilities for federal, state, and county criminal records. Policyholders can screen all of their U.S.-based employees.
AIG Private Client Group provides personal lines products and services for high net worth individuals. Among the products offered are: excess liability; homeowners; coverage for private collections of jewelry, art and other fine collectables; preferred driver automobile; kidnap and ransom insurance; personal aviation insurance; and watercraft coverage.
Services include art collection management to help protect, preserve, and enhance the value of a collection; residential services that provide resources which prevent losses from occurring; and personal security services.
For more information, visit the AIG Private Client Group Web site (www.aigpcg.com).
Chubb updates Customarq Classic
The Chubb Group has updated its Customarq Classic all-risk commercial policy. The policy now provides coverage for impairment of computer services caused by an illegal or malicious entry into electronic data or a system. The automatic blanket limit was increased from $250,000 to $500,000. Blanket limits of $1 million or $2 million are available for an additional premium, subject to underwriting. In addition, several new property coverages have been added to the automatic blanket limit.
HSB launches online quote system
The Hartford Steam Boiler Inspection and Insurance Company launched HSB InstaQuote, an online tool for quoting and binding equipment breakdown coverage. The Web-based quoting system is designed to provide new business quotes for small commercial and middle market firms with individual location values up to $10 million for manufacturing and $20 million for non-manufacturing.
The insurer believes that the majority of types of business it underwrites will be eligible for new business quotes using InstaQuote. If the account requires individual underwriting or has more than 20 locations, the information the agent has input online is immediately referred to an underwriter.
A two-minute animated demo of InstaQuote can be viewed at the insurer's Web site (www.hsb.com). *