A report by David Dickson, VP of the Professional Insurance Agents of New York, finds that the state’s contractors are finding it increasingly hard to obtain insurance coverage, even paying higher premiums.
Dickson, in a commentary solicited by NY Insurance Superintendent Gregory V. Serio, to follow up on testimony given at public hearings last February, indicated that the PIANY gauges general liability for contractors as among the hardest hit classes. The finding is based on a survey of the association’s members, who write this type of business, which was carried out a year ago when the problem already was causing market restriction. “In the past year, things have only gotten worse,” Dickson wrote.
According to Dickson, insurance carriers are dropping businesses that have had the same insurer for years solely because the insurers have lost interest in underwriting in certain markets. This causes business owners’ and agents’ a lot of anxiety and uncertainty because even when risks are renewed, often the final decision and offer are not made by the carrier until after the renewal date.
“One problem faced by agents when a client is dropped by an insurer is the mad scramble to find replacement coverage,” Dickson stated. The PIANY favors a bill, S.4300/A.5845, that would require insurance companies to enclose “loss runs” with any nonrenewal or cancellation notice. This is the information prospective new insurers will require customers to provide in order to obtain new coverage.
PIANY is also advocating bringing workers’ compensation under the same policyholder protections that apply to other commercial lines. Currently, workers’ compensation coverage can be terminated at up to 30 days’ notice, while it requires 60 days’ notice to nonrenew most other commercial lines policies.
Lastly, Dickson thanked the NYSID for its activist role in obtaining a federal backstop for terrorism to the insurance market. He stressed that the “PIANY agrees with the department that a federal reinsurance plan is absolutely essential, as President Bush suggested last week, PIANY has asked all of its members to contact their senators to urge them to enact a federal plan.”
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