Preventing Primary Agent | April 2013
ERRORS AND OMISSIONS
6 TIPS WHEN MOVING STANDARD BUSINESS TO THE E&S MARKET CURTIS M. PEARSALL CPCU, ARM, CPIA Curtis M. Pearsall, CPCU, ARM, CPIA, president of Pearsall Associations Inc. and special consultant to the Utica National E&O Program, supplied this article. He blogs at www.agentseotips.com. Insurance Agents & Brokers Service Group Inc. is the exclusive agent for the Utica E&O program in Delaware, Maryland and Pennsylvania. For questions regarding this article or your E&O coverage, contact IA&B at 800-998-9644 or iab@iabgroup.com.
specific application needed. This initial contact could play an important role down the road.
As the market continues to harden, you will probably find most of your standard markets modifying their underwriting guidelines. This could mean that some of your standard market accounts will be nonrenewed and your agency will need to find them a new home. This new home could very well involve the Excess & Surplus Lines marketplace.
The timeline Give your wholesaler plenty of time with the submission. If the wholesaler has questions, respond quickly and accurately. In many situations, the wholesaler may have the “pen” for that market, so the submission can be turned around quickly. In other situations, it may take upwards of 60 days. If you are unsure whether your other standard markets will be interested in the account, it is best to get the application into the E&S market. This additional time period might be needed based on the type of account.
The E&S market has served a vital role in our industry for many years. While activity in the E&S market normally is fairly busy, it increases significantly during a hard market. As a result, there are a number of issues to keep in mind. The application While wholesalers will typically accept ACORD applications for most of their business, there will be some classes of business where the carrier will want its own application completed. Contact your wholesaler in advance and ask if there is a
Moreover, don’t just send the application and forget about it. Follow up with your wholesaler to ensure the application was received and to check whether any additional information is required.
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The proposal E&S proposals can be unique and contain some forms/endorsements/ exclusions for which you must watch. A General Liability policy in the E&S market might look much different than a General Liability policy in the standard market. Review the proposal and don’t hesitate to ask for a specimen policy if the forms are unfamiliar to you. One endorsement to look for is the Classification Limitation Endorsement. This form, commonly found on GL policies in the E&S market, is a potential E&O headache. This endorsement essentially restricts coverage under that policy to only those classifications noted on the policy. For example, if you insure a carpenter, the coverage would state only claims arising from carpentry would be covered. If the carpenter does some drywalling, there would be