Insurance Journal Forums

Question: if you send a request to bind to a GA with all "subject to" documents, when should you reasonably expect the binder? i.e you sent the bind request to ABC brokerage on Friday, when do you expect your binder and invoice?

Friday afternoon... no later than Monday. But maybe I expect a lot.

depending on the GA, but you could reasonbly expect to have it within 24 to 48 business hours. That would be my expectation, or I would be on the phone with them to find out if there is some type of problem. Don't want to wait too long and expose your E&O

I completely agree, I expect a binder in 24-48 hours. But, I always call the underwriter to orally confirm binding when I email my request. That way, if there is a problem, I know what it is right away.

What someone tells me over the phone may be a low level of assurance, but it gives me peace of mind. I've never had any GA or underwriter not send me a binder after orally confirming. And if they didn't and then tried to deny coverage later, well, that is why we all have E&O after all.


Mark Walters, CPCU
CS Insurance Strategies
http://insuresavvy.blogspot.com

It also depends on the effective date. If I'm sending bind request on the effective date I need confirmation of binding within 24 hours. I can't confirm to my client that coverage is bound until I know for sure that it is. If the client gives you everything requested they expect and assume coverage to be in force.

Thank you guys. I was thinking along these lines too. I just have a case where the GA wants to downpayment prior to binding and the account is not bound 9 days after my binding request. The GA says that the carrier is "too busy"...

That's a case where you need to find a new carrier and especially a new GA. Has it taken them nine days to make you aware of this? And what company is "too busy" to write business? I think you're not getting the whole story.

In the current soft market you should have the binder immediately. If their service sucks find another GA and/or carrier.

And don't believe the GA saying the carrier is "too busy", sounds like smoke to me.

Had an account about 7 years ago, D&O/EPL for a nonprofit. Bound account a few days before renewal, waited and kept following up for binder. One week. Three weeks. Month. Claim comes in, big and ugly, EPL issue. GA now saying "never sent binder, no coverage". Carrier said "we never heard from GA, we have no idea what you are talking about". We had collected money from insured but had not sent yet to GA as they had not invoiced us since they had not sent binder. Was fairly easy to re-create paper trail to demonstrate our binding request & follow up, now GA is on the hook but we are still dangling because we never got the binder.

Fortunately claim disappeared due to retro date & other issues. I never used Stewart Smith again. Lesson learned.

24-48 hours MAX. Any binding request we send also requests immediate acknowledgement of receipt of the binding request. That's pretty easy no matter how you send it. If e-mail, all they have to do is click "reply", type "received" and then send. If it's faxed, they just write "received" on the cover sheet & fax it back. If we don't receive something like that within an hour (depending on day/time sent - so, say one "business" hour), we start calling, and keep calling until we get what we need. The binder and invoice should follow shortly. If they can't handle that, find someone else to deal with. Call the insurance carrier & tell them what's going on and ask if they have another GA you can work with. If they won't help, well, you probably don't want to deal with them either.

Thank you guys, Kevin this is the scenario that was giving me chills at night. Horrible

Not to take the GA's side, since I am one....but the part that made me curious was the GA wanting the downpayment prior to binding. Is it possible the insured has some prior payment issues, and that is holding up the process? Other than that, I can think of no reason why a binder would take my office 9 days to issue. I would call and first speak to the branch manager of the GA, and see what that person tells you.

No this account was a new piece of business. I also thought it was strange

E&S brokers work with both binding authority and brokerage markets. So if you wrote an account with say, Lexington Insurance Company, they are brokerage. So the wholesaler would wait for a binder confirmation from them prior to sending you a binder. If it is a binding authority market they should get the binder to you within 24-48 hours.

As a wholesaler, if I have an account that is still not bound 9 days after the client requests it bound, then typically we are waiting for some piece of information like loss runs, or signed supplemental, something...but we also let the client know what the reason is for the delay. It sounds to me in this case, there is no communication from the GA, and our friendly retail producer is just being shut out. That's not a very nice way to run your business.

I am glad to report that the account is finally bound