Programs, Programs, Programs

Welcome to our 10th annual Program Directory issue, Volume I. The Insurance Journal has provided this guide for retail agents since 1992 in print and since 1998 online. The print edition is regional and published twice a year. The online version is national. Every time we do this Directory, there is a controversy.

The controversy is over what exactly is a PROGRAM? Well, we define a program as multiple coverages customized for a specific class of business. An example would be the class: Dairy Farms. The customized coverages might include animal mortality in the farm package. A program has coverage tailored to fit the class of business. Often, you hear a surplus line broker say, ” I’m offering a program for medical malpractice.” That is a coverage or a market, not a program. Medical malpractice would be one of several coverages offered in a program for hospitals. One key is that a true program will always have an SIC code for the class.

The point of all this is that we are not at all precise in the terminology we throw around in the property/casualty insurance industry. I’m not sure whether it’s a lack of knowledge or just carelessness. Another example is excess and umbrella. You often hear the terms used interchangeably. They actually refer to two very different coverages. An umbrella usually follows the form of the primary policy and may provide excess coverage over more than one primary policy. Excess liability is just that; a policy that is excess of the primary liability policy and may or may not follow the form of the primary. Then there is following form excess, but that’s another story.

I’m sure you can give me more examples and I’d like to hear about them. Also, if you try a few searches in our Program Directory; let me know how we can improve it. Or, if you know of a program that should be listed, let me know about that too. We here at the IJ are always looking for feedback from our readers.

You can contact me at mwells@insurancejournal.com.

Topics Excess Surplus