IRMI Update—Issue #8
An E-mail Newsletter for Risk and Insurance Professionals
ISSN: 1530-7948
January 9, 2001
In This Issue
Colleague,
Recent market surveys by Conning and the Council of Insurance Agents and
Brokers confirmed the firming market trend that our friends have told us about.
Thus far, everyone's worst nightmare—a dramatic reduction of capacity coupled
with predatory pricing from the remaining markets ala 1984/1985—does not appear
to be occurring. The marketplace seems to be firming in a rational and controlled
manner.
Nevertheless, we've heard a few stories of major increases on certain accounts
and in certain lines of coverage. While the Conning and CIAB surveys provide
some insight into the market, the data used in them are months old. To give
everyone a better feel for the current marketplace, we're polling visitors to
IRMI.com on their recent renewal experience. [To see how readers voted, go to IRMI Update #10, and to see some of their comments,
refer to the "Your View" column of that issue.]
Thank you for your support and best wishes for a fantastic new millennium!
Jack
Jack P. Gibson
President
IRMI
Get Copies of AI Endorsements! Two recent "Expert
Commentaries" by Joseph Postel of Liberty Mutual discussed Additional Insured
Endorsements. The conclusion was to specify the endorsement required in the
contract between the subcontractor and the additional insured.
That's certainly good advice as far as it goes, but it doesn't go far enough.
The only remedy if an improper endorsement is used is a breach of contract action.
If successful, collection of damages is limited by the assets of the subcontractor.
Go ahead and specify the endorsement—it will at least help to get the proper
endorsement if the wrong one is used. Then require the actual endorsement to
be attached to the certificate. Give contractor personnel handling the certificate
collection function a list of the acceptable endorsements by ISO form number.
Refer forms without an acceptable form number to a qualified person for review
and further action if necessary.
By: Thomas A. Drawert, CPCU, ARM
HCDT Insurance Agency
San Antonio, Texas
tadraw@flash.net
Suggest a Risk Tip. Future issues of IRMI Update will include more risk tips from our readers. Send
us a practical tip (less than 300 words) for identifying and managing risks,
buying insurance, managing claims, or filling gaps in insurance coverages. We'll
acknowledge your contribution as we did for Tom.
We add new Expert Commentary to IRMI.com every week. There are now 98 articles
on IRMI.com, and many more are in production. Below you'll find summaries of
some recent additions with links to the articles.
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What Is Subrogation
... and Why Is My A/E Contract Waiving It?—Do you really understand
the waiver of subrogation provision contained in most form agreements used
in the architect/engineer industry, why it's there, and how it helps you
manage the risk of your business? This article will help clear up some of
the confusion.
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Stand Alone
E-Commerce Market Survey—This chart, to be regularly updated,
lists the current stand-alone e-commerce insurance policies being offered.
See what coverages are available and how to contact the appropriate insurer,
MGA, or broker.
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Brownfield Redevelopment:
A Risk versus Reward Proposition—With local governments striving
to curb urban sprawl and eliminate inner-city decay, and with the development
of recent legislative and regulatory initiatives, "Brownfield" sites offer
an opportunity for redevelopment. This article explains how environmental
insurance and innovative risk management tools help reduce the risk and
uncertainty surrounding these projects.
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Professional Liability:
Are Contractors Adequately Protected?—As the lines of responsibility
between design firms and contractors merge, professional liability coverage
has become just as essential to a contractor as it is to an architect or
engineer. Learn about the contractor's professional exposure, potential
damages, and alternative solutions and insurance options in this insightful
article.
Additional Insureds
and Completed Operations—Construction contracts require additional
insured status that will respond to completed operations claims. Contractors
faced with such obligations often attempt to have additional insured endorsements
drafted with older language in the belief that this provides the required coverage.
This article discusses a recent court decision that should provide reassurance
that contractors who do so are complying with the insurance requirements of
their contracts.
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