Contractor GL Specialists - Please weigh in on this

[Rob]

Question mainly for people in California or any state who may have been affected by the Montrose decision:

Given the option between the following two types of policies below for a small residential trade contractor, which would you choose?

A. A "modified" occurrence form with manifestation wording with an admitted A rated carrier and a per occurrence deductible


OR


B. A standard occurrence form with a non-admitted, A rated carrier, with a per claim deductible

Keep in mind the modified occurrence form with manifestation wording will only cover damage or injury which manifests itself during the policy period. If the completed operation takes place during the policy period, and damage "occurs" and then progressively deteriorates and then shows up outside of the policy period, it will not be covered.

[pita3333]

Robb: That is a no brainer! Everyone (well I hope) will say the true occurrence form. Now if you add in ... premium, deductible terms etc...that answer will likely "float".

[Rob]

Yes I agree. I guess I'm seeking assurances that it is the best way to go. Consider the premium being comparable and the deductible is $1000 instead of $500 and it is a per claim deductible.

[brokerdave]

Rob

You aptly discuss the pitfalls of the manifestation restrictions in "A".
What do you see as the issues with "B" that could lead you to select the pitfalls associated with "A"?

[pita3333]

Actually let me add one thing...I would try to change the deductible from "Claim" to "Occurence"...at very least let my client see premium impact to make the switch (assuming the carrier would do this).
Would also analyze the past history and how the deductible would apply if activity stayed at same level.

[Rob]

[quote="pita3333"]Actually let me add one thing...I would try to change the deductible from "Claim" to "Occurence"...at very least let my client see premium impact to make the switch (assuming the carrier would do this).
Would also analyze the past history and how the deductible would apply if activity stayed at same level.

[Rob]

Let me also add that the Burlington policy, company "B" has an amendment to the insuring agreement which basically adds:

"This insurance applies to 'bodily injury' and 'property damage' only if: The 'bodily injury' and 'property damage', whether known or unknown to any person: a) Did not first occur prior to the inception date of the policy b) Was not in the process of occurring and is not alleged to have been in the process of occurring, as of the inception date of the policy and c) Was not in the process of settlement, adjustment, 'suit' or other proceeding of any kind (including, but not limited to, any repair attempts or any statutorily mandated loss resolution or pre-suit process) as of the inception date of the policy"

This however, seem reasonable to me in order to address montrose type claims.

Burlington also has a contractual liability amendment.

This stuff is pretty challenging to explain to a contractor. I get it but then try to explain it to the guy hanging drywall and he says "huh?, well what do you recommend?" Of course I'm recommending the one that is less restrictive but then I have to explain why we're going non-admitted, the deductible difference, and the premium is a bit higher.

[CATHIEA]

I do a lot of small contractors (arizona) and seem to do quite a lot of them with Burlington rather than Lincoln General. I would rather sleep at night knowing that my client's claim will be paid. Maybe it's different here but contractors here seem to be more aware of construction defect claims and are more driven by coverage. After all we have Autoowners writing contractors excluding products/completed ops. You have to sell them on the coverages and forget about the price. If you let the client know your main concern is their best interest - price plays a far second. And for all those who will read this and snicker - my agency has a 87% retention rate. And those we do lose to other agencies we get back within 2 years.

[darnovak]

Gosh you folks are good! I was waiting for a definition of "modified" and "manifestation wording" as well as waiting to see what other (unimportant items like PD deductible) he would remember to add during a later post. The original query is so lacking in detail I wouldn't consider even guessing. After 34 years in this business I wouldn't dare to offer a competent comparison of the policies unless I could examine the specimen forms, the underwriting guidelines, and the rating of each carrier. An insurance associate had some "personal property" damaged during Katrina. The PP was in a condo in Cancun. I heard 5 people comment on "covered" vs "not covered" before I asked "did you read your policy ?" That was my first suggestion when considering coverage.- "Read your policy." If you write a lot of these accounts, learn the contracts and underwriting limitations backwards and forwards so you don't have to solicit "opinions" from a place like this. I read these posts for entertainment value only. If something said here piques my interest, I'll research it using reliable resources. Regards, Dar Novak[/u][/b]

[Rob]

[quote="darnovak"]Gosh you folks are good! I was waiting for a definition of "modified" and "manifestation wording" as well as waiting to see what other (unimportant items like PD deductible) he would remember to add during a later post. The original query is so lacking in detail I wouldn't consider even guessing. After 34 years in this business I wouldn't dare to offer a competent comparison of the policies unless I could examine the specimen forms, the underwriting guidelines, and the rating of each carrier. An insurance associate had some "personal property" damaged during Katrina. The PP was in a condo in Cancun. I heard 5 people comment on "covered" vs "not covered" before I asked "did you read your policy ?" That was my first suggestion when considering coverage.- "Read your policy." If you write a lot of these accounts, learn the contracts and underwriting limitations backwards and forwards so you don't have to solicit "opinions" from a place like this. I read these posts for entertainment value only. If something said here piques my interest, I'll research it using reliable resources. Regards, Dar Novak[/u][/b]

[Rob]

[quote="CATHIEA"]I do a lot of small contractors (arizona) and seem to do quite a lot of them with Burlington rather than Lincoln General. I would rather sleep at night knowing that my client's claim will be paid. Maybe it's different here but contractors here seem to be more aware of construction defect claims and are more driven by coverage. After all we have Autoowners writing contractors excluding products/completed ops. You have to sell them on the coverages and forget about the price. If you let the client know your main concern is their best interest - price plays a far second. And for all those who will read this and snicker - my agency has a 87% retention rate. And those we do lose to other agencies we get back within 2 years.

[darnovak]

Rob: Sorry, I forgot to join the "everybody already knows this" club years ago. Here in NY we have absolutely no knowledge of anything important in the GL world so I apologize for asking for clarifications and definitions - too much to expect "at this place". Thanks for the reply. Message received.

[PCorathers]

There are LOTSA admitted markets for trade contractors with minimum premiums starting at a 1000 + fees. Try Statewide, Colonial General, Superior Access, or CBIC. I write a couple or so every month - easy money!

There is no need for a small trade contractor to pay alot of money or have restricted coverage. You may have trouble if they do tracts or condo's. If not then you are good to go.

Generals are a WHOLE other story, of course. I would NEVER write a modified occurance ie claims made, unless you have your E&O paid up!!

[sylvia]

Tough choices for contractors, but I thought you couldn't place coverage through a non-admitted carrier if you had a quote by an admitted insurer? [/img]

[Rob]

[quote="PCorathers"]There are LOTSA admitted markets for trade contractors with minimum premiums starting at a 1000 + fees. Try Statewide, Colonial General, Superior Access, or CBIC. I write a couple or so every month - easy money!

There is no need for a small trade contractor to pay alot of money or have restricted coverage. You may have trouble if they do tracts or condo's. If not then you are good to go.

Generals are a WHOLE other story, of course. I would NEVER write a modified occurance ie claims made, unless you have your E&O paid up!!