Insurance Journal West 2019-03-04

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March 4, 2019 • Vol. 97 No. 5

Contents

News & Markets

12

Highway Fatalities Level Off After Years of Increasing Rates

13 Insurtech Investments

Continued to Climb in Q4: Willis Tower Watson

13 Prices Rise by 2% for

Commercial Insurance: Marsh Global Index

16 Cyber Criminals and ‘Sextortion’: Beazley

17

The High Price of Cyber Attacks: Chubb

18

Word of Mouth Matters When Customers Buy Their Insurance: Facebook

19 Hidden Truth About Stolen Snowmobiles

19

U.S. Plans Regional Response Teams for Oil Train Derailments

Special Report

24

Spotlight: The Future of Driver’s Licenses?

30

Special Report: Small Business Risks in a Cyber World

33

Small Business Owners Don’t Trust Commercial Insurance Buying Process: Accenture

34 Special Report: What

Main Street Wants from Insurance and Why

36

Claims Journal: No More Nuts at the Ballpark for Kids’ Sake

37 How to Prevent Spread of

Idea Exchange

38

Striking a Balance Between Big Data and Underwriting Integrity

40

Opening the Door for Private Flood

42

When Words Collide: Two Ways to Deal with Claim Disputes

44

The Competitive Advantage: The Power of Trust and the Value of an E&O Audit

46

Ins and Outs of Contingent Business Interruption

49

Infectious Diseases in the Workplace

Ask the Insurance Recruiter: How and Where to Start When an Agency Leader Retires

2019 Hospitality Risks Directory

Fending Off Disaster in a Changing World

50

64 66

Closing Quote: The Drone Claims Scenario

28

College Basketball Star’s Busted Shoe Raises Loss of Value Insurance Question

Departments 14 Declarations 6 | INSURANCE JOURNAL | MARCH 4, 2019

14 Figures

20 Business Moves

22 People

48 My New Markets

INSURANCEJOURNAL.COM


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Opening Note Write the Editor: awells@insurancejournal.com

High Health Deductibles and Workers’ Comp Claims

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re employees injured at work more likely to file under workers’ compensation instead of group health insurance when their group health plan has a higher deductible? The Workers Compensation Research Institute (WCRI) found evidence they do in a new study it says has great relevance since the number of workers in health insurance plans with high deductibles is growing. “In years past, workers may have chosen to have a work injury covered within their group health plan. But the increasing cost of deductibles may cause them to consider having the injury covered where it potentially belongs in the workers’ compensation system, where there are no deductibles or copayments for the medical care they receive,” said John Ruser, WCRI’s president and CEO. Injured workers consider a variety of factors in deciding whether to file in group health or workers’ compensation. WCRI’s new study, Do Higher Deductibles in Group Health Plans Increase Injured Workers’ Propensity to File for Workers’ Compensation?, finds evidence that injured workers are more likely to file in workers’ compensation when they face higher out-of-pocket costs in group health plans. The following is a sample of the study’s major findings: • Workers with a higher remaining group health deductible at the time of injury are more likely to file under workers’ compensation than under group health insurance. • Injured workers are about 1.4 percentage points more likely to file a workers’ compensation claim when they have a remaining deductible of $550 (the average) compared with a zero deductible at the time of injury, amounting to a 5.3 percent increase in the workers’ compensation claim volume. • The increase in propensity to file for workers’ compensation coverage in response to higher deductibles is even greater for injured workers with soft tissue conditions. • The increase in filing for workers’ compensation coverage is concentrated in states where employees can choose their initial provider. This may reflect the ability within workers’ compensation of workers to remain with their group health doctor in these states. • The study also estimated the increase in workers’ compensation volume from the growth in high deductible group health policies. The increase partially offsets the overall decline in workers’ compensation claims seen over the past decade.

Workers with a higher remaining group health deductible at the time of injury are more likely to file under workers’ compensation than under group health insurance.

Publisher Mark Wells | mwells@wellsmedia.com Chief Executive Officer Joshua Carlson | jcarlson@insurancejournal.com

ADMINISTRATION / CIRCULATION

Chief Financial Officer Mark Wooster | mwooster@wellsmedia.com Circulation Manager Elizabeth Duffy | eduffy@wellsmedia.com Staff Accountant Sarah Kersbergen | skersbergen@wellsmedia.com

EDITORIAL

Chief Content Officer Andrew Simpson | asimpson@insurancejournal.com Editor-in-Chief Andrea Wells | awells@insurancejournal.com East Editor Elizabeth Blosfield | eblosfield@insurancejournal.com Southeast Editor/MyNewMarkets Amy O’Connor | aoconnor@insurancejournal.com South Central Editor/Midwest Editor Stephanie K. Jones | sjones@insurancejournal.com West Editor Don Jergler | djergler@insurancejournal.com International Editor L.S. Howard | lhoward@insurancejournal.com Columnists & Contributors Contributors: Rob Barber, Jeff Ellington, Matthew Junge, Richard McCathron, Heather McMahon Columnists: Chris Burand, Mary Newgard, Bill Wilson

SALES / MARKETING

Chief Marketing Officer Julie Tinney | jtinney@insurancejournal.com West Sales Dena Kaplan | dkaplan@insurancejournal.com Romeo Valdez rvaldez@insurancejournal.com South Central Sales Mindy Trammell | mtrammell@insurancejournal.com Southeast and East Sales (except for NY, PA, CT) Howard Simkin | hsimkin@insurancejournal.com Midwest Sales Lisa Whalen | (800) 897-9965 x180 East Sales (NY, PA and CT only) Dave Molchan | (800) 897-9965 x145 Sales & Marketing Coordinator Ashley Berg | aberg@insurancejournal.com Advertising Coordinator Erin Burns | eburns@insurancejournal.com Insurance Markets Manager Kristine Honey | khoney@insurancejournal.com Senior Strategist Pam Simpson | psimpson@insurancejournal.com Social Media Manager Ly Short | Lshort@insurancejournal.com Marketing Administrator Gayle Wells | gwells@insurancejournal.com Marketing Director Derence Walk | dwalk@insurancejournal.com

DESIGN / WEB / VIDEO

V.P. of Design Guy Boccia | gboccia@insurancejournal.com V.P. of Technology Chris Thompson | cthompson@insurancejournal.com Ad Ops Specialist Jeff Cardrant | jcardrant@insurancejournal.com Web Developer Terrance Woest | twoest@wellsmedia.com Web Developer Ryan Kleshinski | rkleshinski@wellsmedia.com New Media Producer Bobbie Dodge | bdodge@insurancejournal.com Videographer/Editor Ashley Waldrop | awaldrop@insurancejournal.com

ACADEMY OF INSURANCE

Director Patrick Wraight | pwraight@ijacademy.com Online Training Coordinator Nathan Granitz | ngranitz@ijacademy.com

SUBSCRIPTIONS:

Call (855) 814-9547 or visit ijmag.com/subscribe Outside the US, call (847) 400-5951

The study was authored by Olesya Fomenko and Jonathan Gruber.

Andrea Wells Editor-in-Chief 8 | INSURANCE JOURNAL | MARCH 4, 2019

Insurance Journal, The National Property/Casualty Magazine (ISSN: 00204714) is published semi-monthly by Wells Media Group, Inc., 3570 Camino del Rio North, Suite 200, San Diego, CA 92108-1747. Periodicals Postage Paid at San Diego, CA and at additional mailing offices. SUBSCRIPTION RATES: $7.95 per copy, $12.95 per special issue copy, $195 per year in the U.S., $295 per year all other countries. DISCLAIMER: While the information in this publication is derived from sources believed reliable and is subject to reasonable care in preparation and editing, it is not intended to be legal, accounting, tax, technical or other professional advice. Readers are advised to consult competent professionals for application to their particular situation. Copyright 2019 Wells Media Group, Inc. All Rights Reserved. Content may not be photocopied, reproduced or redistributed without written permission. Insurance Journal is a publication of Wells Media Group, Inc. POSTMASTER: Send change of address form to Insurance Journal, Circulation Dept, PO Box 708, Northbrook, IL 60065-9967 ARTICLE REPRINTS: Contact (800) 897-9965 x125 or visit insurancejournal.com/reprints


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News & Markets Highway Fatalities Level Off After Years of Increasing Rates: National Safety Council

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or the first time since the Great Recession, the U.S. has experienced three straight years of at least 40,000 automobile-related deaths, according to estimates from the National Safety Council. In 2018, an estimated 40,000 people lost their lives to car crashes – a 1 percent decline from 2017 and 2016. Roughly 4.5 million people were seriously injured in crashes last year – also a 1 percent decrease over 2017 figures. At the state level, eight states – Florida, Hawaii, Minnesota, Nevada, New Hampshire, Oregon, Pennsylvania and Washington, D.C. – had at least a 5.8 percent spike in

fatalities, according to NSC estimates. Five states experienced declines of more than 9.4 percent – Kansas, Maine, New Jersey, Rhode Island and Wyoming. The council’s preliminary estimate signals a leveling off after years of consecutive rises. However, last year’s estimated 40,000 deaths is 14 percent higher than four years ago. Driver behavior is likely contributing to the numbers staying stubbornly high. The council’s estimates do not reveal causation; however, 2017 final data show spikes in deaths among pedestrians, while distraction continues to be involved in 8 percent of

12 | INSURANCE JOURNAL | MARCH 4, 2019

crashes, and drowsy driving in an additional 2 percent. “Forty-thousand deaths is simply unacceptable,” said Nick Smith, interim president and CEO of the National Safety Council. “We cannot afford to tread water any more. We know what works, but need to demonstrate the commitment to implementing the solutions. Roadway deaths are preventable by doubling down on what works, embracing technology advancements and creating a culture of safer driving.” The National Safety Council has tracked fatality trends and issued estimates for nearly 100 years. All estimates are

subject to slight increases and decreases as the data mature. NSC collects fatality data every month from all 50 states and the District of Columbia and uses data from the National Center for Health Statistics, so that deaths occurring within one year of the crash and on both public and private roadways – such as parking lots and driveways – are included in the estimates. The National Safety Council is a nonprofit organization whose mission is to eliminate preventable deaths at work, in homes and communities, and on the road through leadership, research, education and advocacy.

INSURANCEJOURNAL.COM


News & Markets Insurtech Investments Continued Climb in Q4: Willis Towers Watson

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here were 63 insurtech investment deals worth nearly $1.6 billion in the 2018 fourth quarter, according to a new Willis Towers Watson report. That’s a 24 percent jump in deal count compared to the 2017 fourth quarter, and funding volume grew by 155 percent year-over-year. The report attributes the growth, in part, to an increasing focus on developing tools to manage cyber risk, as well as a bigger drive for partnerships that help boost technology prowess. “Cyber is a multifaceted, ever-evolving phenomenon. The appropriate response to this is to task our industry with an equally multifaceted approach. Rather than trying to specialize and excel in each tenet required, insurtechs offer our industry a huge opportunity through strategic commercial partnering to allow incumbent insurance firms the ability to become part of a broader, more resilient jigsaw puzzle,” Dr. Andrew Johnston, global head of InsurTech at Willis Re,

said in prepared remarks. According to the report, which covers property/casualty and life/health venture investments: The 63 transactions in Q4 2018 were higher than in Q3 but lower than the first two 2018 quarters. Seed and Series A investments account for 64 percent of the total deals since 2012 and 62 percent this quarter, up 4 percent since Q3. But 45 percent of financings in 2018 took

place at the Series A, B or C rounds. Willis Towers Watson said that this could point to consolidation ahead. P/C insurtech funding volume jumped 89 percent compared to Q4 2017 and 57 percent versus Q3 2018. There were 41 P/C transactions in Q4 2018 compared to 40 in Q3. The number is 52 percent higher, however, than the same period a year prior. There were 31 strategic partnerships between insurers/

reinsurers and insurtech companies in the quarter, rivaling Q3, which itself is a highpoint, the report said. Among the partnerships: Munich Re linked with Fraugster, an AI-based fraud detection product, and AXA XL partnered with Parsyl, a supply chain data platform providing marine risk prevention insights. The report is Willis Towers Watson’s “Quarterly InsurTech Briefing” for Q4 2018.

Prices Rise by 2% for Commercial Insurance in Q4: Marsh Global Index

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verage commercial insurance prices increased by 2npercent in the fourth quarter of 2018, the fifth consecutive quarter of average increases. Also, according to broker Marsh’s Global Insurance Market Index, composite pricing in Q4 increased in all global regions, the first time all regions have reported an increase in the same quarter. INSURANCEJOURNAL.COM

Globally, pricing for property risks increased by almost 4 percent on average, slightly above the rates recorded in the previous three quarters. Casualty prices declined nearly 1 percent on average, continuing a trend started in 2013. Average pricing in financial and professional lines increased across all global regions, most notably in

Australia. The increases were primarily on directors and officers insurance. Regionally, Pacific had the largest pricing increases in the index (>10 percent), a trend that has continued for seven quarters. The UK, Continental Europe, and Latin America all reported average pricing increases of at least one percent. “Although the last quarter

of 2018 saw average prices increase in all regions, the increases were generally modest,” commented Dean Klisura, president, Global Placement and Specialties at Marsh. Klisura also said that while pricing for property, financial and professional lines have increased globally for five straight quarters, “market capacity remains strong in most geographies.”

MARCH 4, 2019 INSURANCE JOURNAL | 13


Figures

47%

The percentage increase in deaths from opioid use in South Carolina between 2014 to 2017, according to the South Carolina Opioid Emergency Response Team, which was formed in 2017 by Gov. Henry McMaster. The team’s first report, released Jan. 31, shows that Charleston County had the highest number of deaths from opioid use in 2017.

Declarations Medical Cannabis

“There is incredible medicinal value associated with cannabis.” — Kentucky Gov. Matt Bevin, on supporting the legalization of medical marijuana in the state. After losing a nephew to a hard battle with cancer, Bevin said he would sign a bill to a make marijuana legal in Kentucky for medical purposes, depending on how the legislation was written.

First Responders

“House Bill 1521 is an important step toward ensuring that our hero first responders are not denied the medical treatment they have earned through their service under Texas law.” — Rep. Oscar Longoria, one of the co-authors of legislation (HB 1521) filed in the Texas House of Representatives that would penalize insurers that illegally deny Texas first responders’ access to medical treatment for line-of-duty injuries covered under state workers’ compensation laws.


42%

The percentage drop in the number of structure fires in Detroit, Michigan, since 2014. Data from the Detroit Fire Department show there were 2,736 structure fires in 2018, with the city fighting about seven structure fires per day. That compares with about 30 structure fires per day five years ago.

$215 MILLION

That’s the amount of a proposed settlement for women who said they were sexually abused by a longtime gynecologist at the University of Southern California. Attorneys say the proposed lawsuit settlement will require the university to put procedures in place for identifying, preventing and reporting sexual abuse and racial misconduct.

Cease and Deist

“This company and its owners misrepresented their ability to pay medical claims, putting employers and their employees in immediate danger.” — Insurance Commissioner Ricardo Lara and the California Department of Insurance issued a Cease and Desist Order to NexGen Insurance Services Inc., Riverstone Capital LLC and its owner/operators for reportedly operating as an unauthorized Multiple Employer Welfare Association, an arrangement that offers or provides health and welfare benefits to employers and their employees.

Worried Doctors

“Doctors are worried that if they would say this, they would risk losing their federal license and also their malpractice insurance.” — North Dakota state Rep. Matthew Ruby, R-Minot, comments after the N.D. House voted 90-3 in favor of removing a requirement in state law that health professionals who certify a patient attest that medical marijuana will help that person. The North Dakota Medical Association said doctors were uncomfortable with the requirement because research on the efficacy of medical marijuana is lacking.


News & Markets Cyber Criminals' Threats to Expose Employee's Use of Adult Sites Emerges as New Cyber Risk: Beazley

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new form of online bribery is emerging where cyber criminals attempt to extort cryptocurrency by claiming to have potentially embarrassing evidence of people using adult websites on work computers, according to a report issued by Beazley Breach Response (BBR) Services. So-called “sextortion” is adding to the tide of cyber-related incidents hitting businesses, said Beazley, explaining that the crime begins with an email from someone claiming to have accessed the recipient’s work computer. The sender says they have tracked the addresses of pornographic websites the recipient has viewed and to have simultaneously recorded footage of their activity while watching these sites using their webcam. The cyber criminal then threatens to humiliate the recipient by sending his or her email contacts details of the embarrassing online activity if their demands are not met. The emails often contain a link or zip file they claim directs the recipient to evidence of the internet usage or webcam activity or to a website to pay the cryptocurrency ransom. If clicked on, the link 16 | INSURANCE JOURNAL | MARCH 4, 2019

may in fact spread malware that can steal information or introduce ransomware used by hackers to lock the computer until the ransom is paid. There is no sign yet that the targets of sextortion are anything other than hoaxes targeting random individuals, and it often turns out that no data has been compromised, said Beazley. However, a small number of emails sent out to thousands of recipients may indeed hit home, the company said, that if these individuals did engage in inappropriate behavior on their work computer, they could be vulnerable to extortion. In the fourth quarter of 2018, Beazley Breach Response (BBR) Services was notified of these cases by several commercial clients involving demands for cryptocurrency worth thousands of dollars. This comes as cyber attacks on business email accounts continue to rise sharply, said Beazley, noting that the total number of email compromises handled by BBR Services in 2018 increased by 133 percent, and the upward trajectory continues. To increase the authenticity of the demand, in some cases, the email will include an old or current password linked

to the recipient’s email address. Such information is often obtained via the dark web where user credentials that have been compromised in earlier data breaches are dumped and sold by cyber criminals. “BBR Services is seeing sextortion emails being sent to individuals in multiple countries, including the UK, and across different industry sectors, from SME to large business,” said Helen Nuttall, international breach response manager at Beazley. “They are sent in the recipient’s local language and often include reference to passwords known by the user,” she added. “These emails are convincing as they often appear to come from within the individual’s own email account. This immediately makes the recipient believe that the account has been compromised. Combine this with the fear of potentially humiliating content being distributed to your friends/family/colleagues, it is easy to see why people are lured into paying.” Nuttall said that spoofed emails are nothing new, but users need to be warned about these tactics — especially as these scams are becoming more sophisticated. “Don’t panic, delete the email, and perform a thorough scan of your computer using a recognized anti-virus solution,” she recommended. “If the email comes from your business email domain, alert your IT department, who should take steps to lock down the domain.” Katherine Keefe, head of BBR Services at Beazley, said: “As with all types of cyber attacks, employers need to treat seriously email compromise in its many forms. The sources of these emails should be scrutinized, and organizations need to ensure employees are aware of practical measures to protect their data, such as via phishing training, and of ways to reduce the instances of email compromises escalating into a more serious cyber incident for organizations.” Compromises can be expensive and costly in terms of reputation, however, they are also preventable, said Beazley. INSURANCEJOURNAL.COM


The High Price of Cyber Attacks: Chubb

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he average price tag for a business to recover after a cyber attack is $400,000, which can be fatal for small-and-medium-sized enterprises (SMEs), according to a report published by Chubb. This hefty cost of repairing the business and its reputation is exacerbated by the frequency of cyber attacks, which are reaching 4,000 per day since Jan. 1, 2016, said Chubb, quoting FBI statistics. Despite these dire statistics, many SMEs may not believe they are at risk, Chubb warned. “Cyber attacks against SMEs often go unreported by the media, so these quite-frequent crimes tend to fly under the radar, and smaller companies may subsequently fail to understand the true extent of the risk,” said the report titled “Cyber Attack Inevitability: The Threat Small & Midsize Businesses Cannot Ignore.” “Small and mid-sized businesses are INSURANCEJOURNAL.COM

directly in the crosshairs of cyber criminals in the United States and across the world,” said William Stewart, division president of Chubb’s Global Cyber Practice. (Stewart co-authored the report with Dave Charlton, executive vice president of Westchester, a Chubb subsidiary.) “These businesses often assume they are not targets for cyber criminals, due to their size, industry, or lack of large databases of personal information,” said Stewart in a statement. “However, the reality is quite the opposite: smaller businesses are actually more vulnerable and considered prime targets for cyber criminals, as their security measures are more likely to be outdated or under-prioritized, opening the door for cyber criminals to deploy attacks quickly, cheaply, and anonymously,” he added. Part of the perception problem is that many SME leaders lack sufficient information about risk protection and assume their cyber attack risk is relatively small, which creates vulnerabilities that cyber criminals exploit, affirmed the report. Chubb cited the following real-life examples used by cyber criminals: Stolen email account. After a cyber criminal gained access to an email account belonging to a real estate office, he convinced a client of the firm to wire transfer $300,000 to a fraudulent bank account set up by the criminal. Ransomware scam. When an employee at a nonprofit accidentally visited a malicious website at work, the company’s shared server became infected with a virus that encrypted all of its files. Cyber criminals then tried to extort money from the nonprofit in exchange for releasing the nonprofit’s stolen documents. Phishing scam. When an accounting

employee at a social services agency got a seemingly legitimate email request, he provided the W-2 forms of current and former staff members. Computer heist. When a small healthcare company was the victim of a laptop theft, sensitive employee payroll information stored on that laptop was lost and compromised. “From device theft to ransomware, and phishing scams to unauthorized access, cyber criminals can access sensitive information by targeting organizations from the outside, as well as the inside,” said the report.

How Can SMEs Protect Their Businesses?

Despite the gloomy outlook, Chubb emphasized the majority of cyber incidents are preventable, as they mostly stem from human error or a simple lack of proper training. The company recommended SMEs take the following preventative measures: • Create a cyber-attack response plan and invest in the resources to ensure the plan can be executed. • Use a secure password manager to make it easier for employees to manage their credentials in a secure manner. • Educate employees about the risks of cyber crime and deploy software that can reduce social engineering attacks such as phishing. • Install good antivirus software and ensure it is always up-to-date. • Update operating systems and applications regularly to ensure they are supported by the manufacturer. • Protect networking activity with a secure router on your internal network and a virtual private network (VPN) externally. • Purchase a cyber insurance policy. “In addition to the built-in loss mitigation services to reduce the risk of being targeted in the first place, a cyber policy will likely include incident response services if an attack succeeds,” said the report. MARCH 4, 2019 INSURANCE JOURNAL | 17


News & Markets Word of Mouth Matters When Customers Buy Their Insurance: Facebook

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or young and old property and auto insurance customers alike, word of mouth shapes their coverage purchases, according to a new Facebook survey. Where that word of mouth comes from can differ, however. The survey found that 80 percent of customers are influenced by recommendations from friends and family when deciding on their insurance. But younger customers said they worried that an insurance broker or agent would try to influence their purchase if they weren’t sure of their choice, the survey found. As a result, the global social networking giant said, many younger customers saw non-family word of mouth — consumer reviews — as the most trustworthy information source. 18 | INSURANCE JOURNAL | MARCH 4, 2019

The global social networking giant pursued its survey through Facebook IQ, its “insights unit” designed to help marketers better understand how people communicate both on and offline. Accenture gathered the data, surveying 1,007 U.S. insurance consumers who bought automobile or property insurance products in the three months before July 2018. Here are some additional survey highlights: • Millennials primarily buy their auto insurance online. But online comes in second when the age group seeks property insurance. About 37 percent rely on insurance agents for property coverage, and 32 percent sign up online. • Approximately 56 percent of auto insurance shoppers said they are loyal to a spe-

cific insurance brand, and 83 percent said they initially only look at 1-3 brands before they make a purchase. • 70 percent of shoppers spent less than four hours looking for their insurance. • 34 percent surveyed said they hear about new auto insurance brands through friends and family. For millennials, that number reaches 38 percent, with 36 percent evaluating a brand through friends and family. • Younger auto insurance purchasers often talk to friends and family about their options online, through social platforms. • Millennials are 2.7 times more likely than Generation X and Baby Boomers to be interested in auto insurance they see advertised on social platforms such as Facebook. INSURANCEJOURNAL.COM



News & Markets NSAIDs Overtake Opioids as Top Workers’ Comp Drug in California

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on-steroidal anti-inflammatories, or NSAIDs, have supplanted opioids as the most common therapeutic drug group prescribed to injured workers in California, according to a new California Workers’ Compensation Institute study. The study also finds that payment data show that both dermatological medications and anticonvulsants now rank ahead of opioids in terms of total reimbursements. The study uses data from 5.75 million prescriptions dispensed to California injured workers from 2009 to June 2018. CWCI analysts examined changes in the prescription and payment distributions among therapeutic drug groups, identified trends in the use of generics and determined average amounts paid for drugs within each drug group over the past decade. The results show that efforts to curb inappropriate use of opioids are continuing to have an effect, as opioids fell to 18.0 percent of the prescriptions filled in the first half of 2018, down from 20.2 percent in 2017 and down from 30.5 percent a decade ago. The study credits measures including tighter scrutiny via utilization review and independent medical review, restrictions by payers, medical provider networks, pharmacy benefit managers and in the Medical Treatment Utilization Schedule formulary. NSAIDs, often prescribed as non-opioid alternatives to treat pain, surpassed opioids as the top drug group in California workers’ comp in 2016, and since then, their share of the prescriptions has continued to grow, climbing to a record 31.7 percent of the drugs dispensed to injured workers in the first half of 2018, according to the CWCI study. Anticonvulsants’ share of the prescriptions also increased, more than doubling from 4.1 percent in 2009 to 9.7 percent in the first half of 2018, likely due to their growing use as a W2 | INSURANCE JOURNAL | WEST MARCH 4, 2019

non-opioid alternative to treat neuropathic pain, the study states. The 2018 data show anticonvulsants were the third most prescribed drug group, moving ahead of muscle relaxants, which under the MTUS formulary that took effect on Jan. 1, 2018, are not exempt from utilization review, with the exception of limited special fill or perioperative allowances that restrict the quantity of the drug that can be dispensed. The study also found shifts in the distribution of prescription payments. A decade ago, dermatological products accounted for 10.1 percent of the total drug spend in California workers’ comp, and were the fourth most costly drug group behind opioids, NSAIDs and ulcer drugs. In the first half of 2018, however, that proportion was up to 17.6 percent, making dermatologicals the top drug group in terms of total payments, according to the study. In addition to the increasing share of the workers’ compensation prescription dollars going toward derma-

tologicals, the study also found that anticonvulsants’ share of the drug spend tripled from 4.8 percent in 2009 to 15.2 percent in the first half of 2018, so anticonvulsants now rank ahead of opioids as the second most costly drug group. The data show that most of the growth in anticonvulsant’s share of the payments occurred over the past four years, coinciding with the decline in opioid use, suggesting the use of certain anticonvulsants in place of opioids. Notably, anticonvulsant prescriptions used in California workers’ comp are heavily concentrated in just two drugs, one of which is only available as a brand drug, and that drug accounted for nearly three quarters of the anticonvulsant dollars paid in the first half of 2018. CWCI has published its study in a Research Update report, “California Workers’ Comp Prescription Drug Utilization and Payment Distributions, 2009-2018: Part 1.” The free report can be downloaded from the Research section at www.cwci.org. INSURANCEJOURNAL.COM


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News & Markets Insurer Hit With $102K Fine for Selling Illegal NRA-Branded Policies

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llinois Union Insurance Co. has paid a $102,000 fine after Washington Insurance Commissioner Mike Kreidler ordered the company to cease underwriting self-defense policies branded by the National Rifle Association. After an investigation, Kreidler ordered Illinois Union in January to stop underwriting the illegal policies in the state because they insure unlawful activity. The company agreed in a consent order to pay the fine. The company reportedly sold 811 policies to Washington consumers, marketed through the NRA’s Carry Guard program. The policies offered upfront money for covered costs and expenses related to criminal defense for gun owners, even if the insured subsequently pleads guilty to or is convicted of a crime. Washington law prohibits insurance that covers intentional criminal activity by the policyholder. Illinois Union is a subsidiary of Chubb

Ltd. Group and had previously indicated it would stop selling the liability policies nationwide in October 2019. As a result of Kreidler’s cease-and-desist order, Illinois Union immediately halted sales of the policies in Washington. Kreidler is also seeking to fine Lockton Affinity LLC $75,000. Lockton Affinity is the licensed insurance producer that

sold the illegal policies on behalf of the NRA. The company requested an extension until early March to decide whether to agree to the terms of the $75,000 fine or demand a hearing to contest it. Fines assessed against insurance companies, agents and brokers are deposited in the state’s general fund to pay for state services.

California Department of Insurance Issues Cease and Desist Order for Benefits Firm

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he California Department of Insurance issued a Cease and Desist Order to NexGen Insurance Services Inc., Riverstone Capital LLC (dba Riverstone Capital Insurance Services LLC) and its owner/operators Travis O. Bugli, James C. Kelly and Robert M. Clarke. The move follows a joint investigation by CDI and the U.S. Department of Labor, which reportedly revealed that NexGen and Riverstone have

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been operating as an unauthorized MEWA (Multiple Employer Welfare Association), an arrangement that offers or provides health and welfare benefits to employers and their employees. The Cease and Desist Order alleges that NexGen and Riverstone were marketing, soliciting, and selling purported self-insured health plan arrangements to employers, not health insurance, in violation of California law. NexGen and Riverstone allegedly failed to pay medical provider claims totaling $24 million. Investigators say NexGen’s and Riverstone’s business practice was to pool and commingle contributions received from its employer clientele into

its own corporate accounts. “This company and its owners misrepresented their ability to pay medical claims, putting employers and their employees in immediate danger,” Insurance Commissioner Ricardo Lara said in a statement. Under the CDI’s Cease and Desist Order, NexGen and Riverstone are to immediately stop operating any MEWA directly or indirectly or acting as an insurance agent, producer, insurer, or any other capacity in the California for which they do not hold a valid license, permit, or Certificate of Authority to do so. The companies are to immediately cease and desist from receiving any money, commission, fee, rebate, payment, remuneration or any other valuable consideration whatsoever, directly or indirectly, in connection with any MEWA transactions. INSURANCEJOURNAL.COM


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CHANGE IS HARD. CHANGE IS GOOD. The road to change is often long and not always easy to follow. But we’ve started down that road and have a clear vision of where we’re going. We hope you notice the big changes happening at State Fund and, better yet, let us show you where we’re headed. It’s a good thing.

statefundca.com Together, we’ll help keep California working. State Compensation Insurance Fund is not a branch of the State of California. Copyright © 2019 State Compensation Insurance Fund of California.


News & Markets In Separate Cases, 2 Charged in Washington with Insurance Fraud

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wo Yakima County, Wash., residents have been charged in Superior Court in connection with separate auto insurance fraud claims. The charges followed investigations by Insurance Commissioner Mike Kreidler’s Criminal Investigations Unit. William Gaethle, of Yakima, was charged with first-degree theft and filing a false insurance claim, both felonies. According to the investigation, Gaethle reported a 1995 Ford van stolen from his business in February 2016. He filed a claim with Cincinnati Insurance, which paid him $19,550 for the van, which he insured on his commercial auto policy. Gaethle told police that a former employee stole the van from the business. Yakima Police determined the van was owned by the former employee, and Gaethle didn’t have the documentation to prove he owned it. Cincinnati Insurance later asked Gaethle to return the payment, which he declined to do. The insurer referred the case to Kreidler’s detectives. Tara Lee Tillett, of Selah, was charged with attempted first-degree theft and filing a false insurance claim. According to the investigation, Tillett’s son caused a two-car collision on

April 3, 2018, while driving her 2005 Chevrolet Trailblazer. At the time of the collision, the Trailblazer and two other cars on Tillett’s auto policies didn’t have collision coverage. Eight minutes after the collision, Tillett

logged into her PEMCO account to add collision coverage and the next day filed a $5,368 claim for the damage to her vehicle. PEMCO denied the claim and referred the case to Kreidler’s detectives.

It could happen today. After a damaging earthquake, the dawn we woke up to today could look completely different come tomorrow. Your customers may need your help to recover if their world has been turned upside down by an earthquake. Home insurance does not cover shake damage, and limited government assistance is only for those who qualify. Help your customers protect their way of life with a CEA policy that’s flexible and affordable.

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News & Markets

Participants in $200M California Workers’ Comp Scheme Sentenced

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everal conspirators involved in a massive workers’ comp kickback scheme were ordered in late February to serve prison sentences and pay millions in financial penalties for their roles in the corrupt payment of millions of dollars to induce doctors and other medical professionals to refer hundreds of injured workers for medical treatments and services. According to court records, dozens of marketers, doctors, lawyers and medical service providers conspired to bilk the workers’ comp system in California by buying and selling patients and their individual body parts like commodities. Among the defendants sentenced was an attorney, a chiropractor, two business owners and several marketers who referred patients for tests, such as MRIs, functional capacity exams and sleep studies, and treatments like X-rays and ultrasound, as well as pain medications, and durable medical equipment based on the corrupt payments. Defendant Fermin Iglesias and co-defendant Carlos Arguello reportedly W8 | INSURANCE JOURNAL | WEST MARCH 4, 2019

operated a patient-capping enterprise, in which they found individuals who would file workers’ comp claims against their employers. Iglesias and Arguello then sold, bartered and exchanged these applicants with others in the workers’ comp industry, including attorneys, primary care physicians and providers of medical goods and services. Each of these entities had to “pay to play,” and as the patient was referred throughout this corrupt system, money changed hands at each step. Arguello operated several patient-recruitment entities, including one called Centro Legal. Through billboards, flyers, advertisements and business cards, Centro Legal recruited persons to seek workers’ compensation benefits from their employers or former employers. When the injured worker called the 1-800 number on the billboard or card, he or she reached a call center, which might be located in another country. From there, Iglesias’ company, Providence Scheduling, took over brokering the patient to maximize the profit that could be extracted from him or her.

Centro Legal referred the newly-acquired patient to complicit workers’ comp attorneys. To get these new clients, the attorneys in the corrupt network were expected to comply with certain conditions: first, they had to use Arguello’s copying service to fulfil document requests for all of the new client's medical records; second, they had to agree to designate as their client’s primary treating physician with one of the complicit physicians within the corrupt network. In exchange, the attorneys received compensation. In sentencing hearings held on Feb. 20 and 21, U.S. District Judge Cynthia A. Bashant sentenced each defendant to custodial time. For his crimes, Iglesias was sentenced to 60 months in custody, and required to forfeit $1,005,000 in ill-gotten gains. Judge Bashant imposed five years’ probation on Igelsias’ corporations, MedEx and Meridian, and imposed a $500,000 joint and several fine. Miguel Morales was sentenced to 12 months and one day in custody, and was required to forfeit $140,000. INSURANCEJOURNAL.COM


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News & Markets MGA Coalition Covers Firms with Cyber Exposure Under EU’s Data Privacy Law

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oalition, the San Francisco-based managing general agency that specializes in cyber insurance for small and mid-sized businesses, announced it is broadening coverage to include exposures to violations of the European Union’s General Data Protection Regulation (GDPR). Unlike other cyber insurance policies, Coalition said it is the first insurer to offer full-spectrum coverage to help businesses comply with regulations, protect against alleged violations and pay resulting expenses and penalties. For the time being, said a company representative, the coverage is focused on U.S. small and medium-sized enterprises (SMEs). The ramifications of GDPR are widespread and can impact businesses regardless of their location, size or financial health, said Coalition, explaining that if a company offers goods or services to, or collects data about, an EU citizen, it must comply with the law. Failure to comply with GDPR can be a costly proposition: penalties may be assessed at 4 percent of an organization’s annual global revenue or 20 million euros, whichever is higher. “GDPR is complex and violations can arise even when there has been no breach of protected information. Companies can be fined simply for failing to comply with the terms of their own privacy policy. Many cyber insurance policies miss this exposure,” said Joshua Motta, co-founder and CEO of Coalition.

“Coalition’s policy will now not only respond with broad coverage for any resulting costs and liability, including GDPR violations, resulting from a security failure or data breach, but also protect organizations against their failure to comply with broader GDPR enforcement actions,” he added. “Non-compliance with GDPR can cost a small or [mid-sized] business its livelihood. Our expanded GDPR offering, available with all Coalition cyber insurance policies, is designed to educate organizations on their obligations, assist with compliance, and ultimately provide financial protection from alleged violations,” noted Motta. With Coalition, any small or mid-sized business can protect themselves against cyber risk with comprehensive insurance coverage, free cyber-security tools, and access to a team of experts to assist with compliance, cyber security and the response to a cyber incident. Coalition provides companies with up to $10 million of cyber and technology insurance coverage in all 50 states and the District of Columbia. Coalition’s cyber risk management platform provides automated security alerts, threat intelligence, expert guidance and tools to help businesses remain resilient in the face of

cyber attacks. To demonstrate the need for GDPR coverage, Coalition said businesses are estimated to spend more than $40 billion this year on efforts to comply with privacy and cyber-security regulations, including GDPR. Coalition gathered these statistics from Stamford, Conn.-based research firm Gartner Inc., which on Aug. 15, 2018 issued forecasts on worldwide information security spending. Now, more than ever, businesses must work to implement controls to adhere to new regulations, and prepare themselves for any resulting penalties should the worst come to pass, said Coalition. Launched in 2017 by Joshua Motta and John Hering, Coalition combines comprehensive insurance and free cyber-security tools to help businesses manage and mitigate cyber risk. Coalition is backed by Swiss Re Corporate Solutions and Argo Group.

Nevada Lawmakers Raise Concerns Over Speed Camera Bill

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evada lawmakers have expressed concern over legislation that would give governments the ability to install red light and speed cameras to capture traffic violations. Senate Majority Leader Kelvin Atkinson raised concerns in February that the enforcement cameras will first appear in low-income

communities, instead of in more affluent neighborhoods. The bill says an automated traffic enforcement system creates a photograph that can be used as evidence of a traffic violation. The Insurance Institute for Highway Safety reports more than a dozen states have both red light

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and speed cameras. Amy Davey with the Department of Public Safety says the system would only be used for traffic light and speed violations. She argued the system is shown to reduce crash fatalities and serious injuries, but also said some studies show rear-end collisions can increase. Copyright 2019 Associated Press. All rights reserved. INSURANCEJOURNAL.COM


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News & Markets AM Best Revises Status to Developing For California Capital Insurance Co. and Subsidiaries

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M Best has revised the implications of the under review status to developing from negative for the Financial Strength Rating (FSR) of A- (Excellent) and the Long-Term Issuer

Credit Ratings of “a-” of California Capital Insurance Co. and its subsidiaries. The revised implications follow the recent announcement that Capital Insurance will be acquired by Auto-

Owners Insurance Group. The ratings will remain under review pending the completion of the deal and AM Best’s discussions with the company’s management. The developing implications are due primarily to the potential of positive rating factors that may result post-acquisition, according to AM Best. AM Best says it will continue to hold discussions with Capital’s management throughout the process and will monitor the group’s risk-adjusted capitalization, operating performance, business profile and enterprise risk management. California Capital’s subsidiaries are: Eagle West Insurance Co.; Monterey Insurance Co.; and Nevada Capital Insurance Co. They operate under an inter-company pooling arrangement, Capital Insurance Group. All companies are domiciled in Monterey, Calif.

Washington Jury Awards $14M in Malpractice Suit

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King County, Wash., jury awarded a woman nearly $14 million in a medical-malpractice suit against Seattle Children’s Hospital and Children’s University Medical Group. The jury found doctors failed to prevent a stroke that left her unable to care for herself. Latosha Evans, now 22, underwent a heart transplant in 2007. Doctors later found that a stent in her heart needed to be replaced and she underwent surgery in 2014, but doctors realized during the procedure they didn’t have enough stents and prolonged the surgery. The surgery lasted four hours, leaving Evans at risk for stroke. Her parents filed the suit, claiming negligence and medical malpractice. Copyright 2019 Associated Press. All rights reserved.

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Hidden Truth About Stolen Snowmobiles

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uring the period Jan. 1, 2015, through Dec. 31, 2017, 1,592 snowmobiles were reported stolen — 506 in 2015, 549 in 2016 and 537 in 2017. That’s according to a report by the National Insurance Crime Bureau (NICB). Law enforcement agencies in 32 of the 50 states reported at least one snowmobile theft during this period with Minnesota reporting the most with 314. It was followed by Michigan (207), Wisconsin (129), Alaska (128) and Washington (109).

There are only four manufacturers of snowmobiles in North America: Textron/ Arctic Cat, Bombardier/Ski-Doo, Polaris and Yamaha. Polaris machines were the most stolen during this period with 566, followed by Textron/Arctic Cat (418), Bombardier/Ski-Doo (416) and Yamaha (153). Another 39 thefts were unable to be identified by manufacturer. While some snowmobiles are stolen while unattended, most are taken while they sit on transport trailers either in transit to trail riding areas or stored during non-use in publicly-accessible locations. Officials say that once snowmobiles are stolen, they can be easily hidden in garages or in storage units, which makes recovery more difficult. That helps explain why 57 percent of the snowmobile thefts in this period have not been recovered.

U.S. Plans Regional Response Teams for Oil Train Derailments By John Raby

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ederal transportation officials are requiring railroads to establish regional response teams along oil train routes following a series of fiery derailments. The new rule is aimed at having crews and equipment ready in the event of an accident. It applies to oil trains in continuous blocks of 20 or more loaded tank cars and those having 35 loaded tank cars. The U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration issued the rule in coordination with the Federal Railroad Administration. The safety agency said a review identified challenges that occurred during previous responses to derailments. “This final rule is necessary due to expansion in U.S. energy production having led to significant challenges for the country’s transportation system,’’ the agency said. In 2014, the agency issued a report detailing the concerns of fire chiefs and emergency management officials in oil INSURANCEJOURNAL.COM

train accidents, including that emergency responders were not fully aware of resources available from railroads and other organizations that would be helpful in preparing for such disasters. Rail carriers now will be required to provide information about oil trains to state and tribal emergency response agencies and identify someone to oversee each response zone along with organizations, crews and equipment that would be used in a “worst-case discharge.’’ Environmentally sensitive areas along the route must be identified, along with the location where the response team will deploy and the location and description of equipment. A railroad must indicate whether information should be exempt from public disclosure due to security or proprietary concerns. Transportation Secretary Elaine Chao said the rule “will make the transport of energy products by railroad safer.’’ The greatest share of oil now moved by the nation’s 140,000-

mile freight rail network goes from North Dakota and Montana to the West Coast. In 2013, a runaway train carrying crude oil from North Dakota derailed in LacMegantic, Quebec, and exploded, killing 47 people. Other fiery crashes and fuel spills have occurred in Alabama, Illinois, Montana, North Dakota, Oregon, Virginia, West Virginia and elsewhere. Copyright 2019 Associated Press. All rights reserved.

MARCH 4, 2019 INSURANCE JOURNAL | 19


Business Moves ty and casualty, life and health, employee benefits, investment and risk management products and services.

The Hilb Group LLC, Aloisio Insurance Associates Inc.

National Hanover Insurance Group, RSA Group The Hanover Insurance Group, Inc. has

a new agreement with the multinational insurer RSA Group to join its global network as a U.S. strategic network partner. This relationship expands The Hanover’s international specialty capabilities for domestic businesses with overseas risks. Through the company’s partnership with London-based RSA Group, The Hanover gains access to a global network of local insurers in more than 180 countries. This offers The Hanover’s agents admitted products that are compliant with local laws and legislation for foreign operations in countries where coverage must be written by local, licensed insurers.

East Relation Insurance, J. Deutsch Associates

Relation Insurance Services, an insurance brokerage that offers risk management benefits and third party administrator (TPA) consulting services through its family of brands across the U.S., has entered into a definitive agreement acquiring J. Deutsch Associates Inc., a New York City-based, privately owned and operated insurance agency. The transaction is expected to bring together complementary portfolios and deepen Relation's Education Solutions student health insurance offerings. The 20 | INSURANCE JOURNAL | MARCH 4, 2019

purchase is Relation's first in New York. Founded in 1998, J. Deutsch Associates provides insurance to international students and scholars in the U.S. through its International Student Protection (ISP) offering, but has also evolved into a full-service brokerage offering business travel accident insurance, group life insurance, basic and voluntary accidental death and dismemberment insurance, statutory disability insurance, short-term disability insurance and long-term disability insurance. Relation Insurance Services is a privately held corporation with private equity partners Parthenon Capital and Century Equity Partners.

Hub International Limited, The Rubin Group Inc.

Hub International Limited, a global insurance brokerage, has acquired the assets of The Rubin Group. The Rubin Group President Michael Rubin, along with his team, will join Hub International Northeast following the transaction. Headquartered in New York, N.Y., The Rubin Group has provided insurance and risk management to businesses and individuals throughout the country for nearly 30 years. The firm specializes in commercial and personal insurance, providing a portfolio of business and industry-specific insurance products and risk mitigation strategies in industries such as real estate, retail, construction and transportation. Headquartered in Chicago, Ill., Hub is a global insurance broker providing proper-

The Hilb Group LLC has acquired Rhode Island-based Aloisio Insurance Associates Inc. AIA, a full-service insurance agency, primarily provides property and casualty insurance to individuals and businesses in the Rhode Island area. Located in North Providence, R.I., AIA and its associates will join THG’s regional operations in New England following the acquisition. The Hilb Group is a middle market insurance agency headquartered in Richmond, Va., and is a portfolio company of Boston-based private equity firm, Abry Partners. Following the acquisition, The Hilb Group aims to continue growing through targeted acquisitions in the middle market insurance brokerage space. The company now has 67 offices in 17 states.

The Hilb Group LLC, D’Camera Group

The Hilb Group LLC has acquired D’Camera Group. The transaction became effective Jan. 1, 2019. Located in Annapolis, Md., DG is a full-service insurance agency founded in 2006. It primarily provides property and casualty insurance in the Mid-Atlantic region. DG Agency President Dean D’Camera and his associates will join THG’s MidAtlantic operations following the acquisition. The Hilb Group is a middle market insurance agency headquartered in Richmond, Va., and is a portfolio company of Boston-based private equity firm, Abry Partners.

Kaplansky Insurance, KW Insurance

Kaplansky Insurance, an independent locally owned agency in the Northeastern U.S., has acquired KW Insurance, a full-service agency with locations in Dedham and Cambridge, Mass. Following the acquisition, the KW Dedham location will be merging with INSURANCEJOURNAL.COM


Kaplanky’s corporate headquarters in Needham, Mass. The KW Cambridge location will continue to operate at its present location under the Kaplansky name. Kaplansky Insurance currently operates 13 locations throughout Massachusetts.

commercial property and casualty, professional liability, healthcare, transportation and personal lines. Myron Steves is known for its advanced technology, service to retail clients and ease of doing business.

South Central

Chicago-based Ryan Specialty Group has reached a definitive agreement to acquire the assets and operations of Westphalen Insurance Services, an independently owned wholesale insurance brokerage located in Edmond, Oklahoma. The Westphalen team will become part of R-T Specialty, the wholesale brokerage unit of Ryan Specialty Group. Founded in 1987, Westphalen is a family run business that focuses on property and casualty, personal lines and transportation. Led by Jeff Westphalen, the firm has binding authority commitments within each segment with ‘A’ rated XV carriers.

U.S. Risk Insurance Group, USI Insurance Services

Dallas-based property and casualty program and specialty brokerage firm, U.S. Risk Insurance Group (U.S. Risk), announced it has agreed to be acquired by USI Insurance Services. The transaction is expected to close in the second quarter of 2019, subject to customary conditions and regulatory requirements. U.S. Risk will maintain its Dallas headquarters and continue to operate independently under the company’s various existing brands, U.S. Risk, Oxford, MGB, James Hampden International, Antarah and UNIS. U.S. Risk Chief Executive Officer Randall G. Goss and his current leadership team will remain and continue to lead these businesses. Headquartered in Valhalla, New York, USI Insurance Services delivers property and casualty, employee benefits, personal risk and retirement products and services to large risk management clients, middle market companies, smaller firms and individuals.

Ryan Specialty Group, Myron F. Steves & Co.

Chicago-based Ryan Specialty Group is acquiring the assets and operations of Myron F. Steves & Co., an independently owned wholesale insurance brokerage founded in 1955 and headquartered in Houston, Texas, with additional offices in Austin, Dallas and San Antonio. The Myron Steves team will become part of R-T Specialty, the wholesale brokerage unit of Ryan Specialty Group, strengthening RT’s presence in Dallas and Houston and establishing offices in Austin and San Antonio. Myron Steves’ areas of expertise include INSURANCEJOURNAL.COM

Ryan Specialty Group, Westphalen Insurance Services

Southeast Ryan Specialty, International Specialty Insurance Services

Ryan Specialty Group, LLC has reached a definitive agreement to acquire the assets and operations of International Specialty Insurance Services, an independently owned managing general underwriter with offices in Winston-Salem, North Carolina. ISI’s team will become part of RSG Underwriting Managers, LLC, the managing general underwriting unit of Ryan Specialty Group. ISI offers disability and other related insurance products to athletes, entertainers, physicians and other high-earning The business is privately professionals. owned and led by Matthew Ferraro, Joseph Ferraro and Christopher Larcheveque. All of these individuals, along with the whole team at ISI, will remain with the business under the new RSG ownership. Sherman & Company LLC acted as financial advisor to ISI. Ryan Specialty Group includes a wholesale brokerage firm and managing general underwriting companies designed for brokers, agents and insurers.

Wilkinson Insurance, Commercial Insurance Services

Wilkinson Insurance Services Inc., an insurance premium audit services company based in Huntsville, Ala., is expanding to Virginia with its acquisition of Commercial Insurance Services of Virginia. The acquisition is expected to increase the company's footprint in the Southeast and Mid-Atlantic region, according to a company press release. Wilkinson Insurance Services Inc. was incorporated in 1993 with the goal of providing premium audit services to the insurance industry in the Southeast. CIS has been in business for thirty years, servicing both the Commonwealth of Virginia and North Carolina.

West Auto-Owners, Capital Insurance Group

Auto-Owners Insurance has entered into a definitive agreement to acquire Monterey, Calif.-based Capital Insurance Group. Philo Smith & Co. was the exclusive financial advisor to Auto-Owners. Auto-Owners Insurance Group is headquartered in Lansing, Mich. Auto-Owners is a multiline property and casualty insurer operating through independent agencies in 26 states. Capital Insurance Group insures personal lines and a wide range of commercial and agricultural businesses in California, Washington, Oregon, Nevada and Arizona.

Arthur J. Gallagher, Surety Solutions, Agency Multiplied

Arthur J. Gallagher & Co. has acquired Salem, Ore.-based Surety Solutions LLC and Agency Multiplied Inc. Surety Solutions is a surety focused agency that specializes in offering surety bonds for mortgage brokers, artisan contractors and other industries. Arthur J. Gallagher is an insurance brokerage, risk management and consulting services firm headquartered in Rolling Meadows, Ill. MARCH 4, 2019 INSURANCE JOURNAL | 21


People National

Ironshore Specialty Casualty has named Casey Hartley senior vice president and head of the Programs business unit in the U.S. She will oversee the development, marketing and distribution of programs lines, working with programs administrators across Ironshore’s underwriting platforms in the U.S. Hartley will be supported by Tracey Sharis, senior vice president, who has been appointed director of Programs. Hartley was named to lead U.S. General Liability Lines for Liberty International Underwriters (LIU) in 2016. She previously served in various roles at LIU's parent, Liberty Mutual Commercial Insurance. Sharis was most recently senior vice president of Operations and Distribution for Ironshore Specialty Casualty and senior vice president of Retail Distribution. She joined Ironshore Specialty Casualty in 2011 as vice president for retail and construction business lines within the U.S. Sharis has held management positions for Aon Benfield within its facultative reinsurance group and with AIG’s Lexington Insurance Co. in property and casualty sectors. Kimberly A. Holmes has joined Chicago, Ill.-headquartered Kemper Corp. as senior vice president, chief actuary and strategic analytics officer. Holmes will lead Kemper’s actuarial and analytics teams. Holmes’ direct reports include the executives who lead the actuarial and data and analytics functions for Kemper’s specialty auto, personal insurance, life and health lines of business. She will report directly to Kemper President and CEO Joseph P. Lacher Jr. and be based in Chicago. Most recently, Holmes served as senior vice president and global head of strategic analytics for AXA XL. Prior to that, she held chief actuary roles at Endurance Risk Solutions, Endurance Specialty Insurance, Enterprise Reinsurance and Starr Excess Liability Insurance Co.

East

M&T Insurance Agency (MTIA), headquartered in Buffalo, N.Y., has hired Jeffrey Batt to its Washington D.C. office as the cyber insurance practice leader. 22 | INSURANCE JOURNAL | MARCH 4, 2019

He will manage client relationships by providing cyber insurance and risk consulting and will lead efforts to create cyber and privacy Jeffrey Batt risk assessment and quantification tools for MTIA. Batt most recently worked for Marsh in its Cyber Center of Excellence. Prior to Marsh, he was an associate deputy general counsel at the U.S. Department of Defense.

Global Excess Partners (GEP), a

New York City-based specialty insurance organization, has promoted Brendan Cook from vice presBrendan Cook ident to vice president and managing director. He reports to Chris Zoidis, corporate executive vice president of H.W. Kaufman Group, the parent company of GEP. Cook will lead GEP’s growth strategy, product development and operations, with immediate priorities of capitalizing on the company’s specialty insurance products, including middle market property facility and flood only facility coverage. Cook joined GEP in July 2017 as vice president and head of its Middle Market Underwriting operation and has more than 30 years of experience in the insurance industry from both the United States and his native Australia through various roles within the insurance industry.

South Central

Concord, Calif.-based Athens Administrators has hired Catharine Knight as its Texas sales director. Knight has more than 25 years in the healthcare and insurance industry as an all-lines adjuster, a sales director for ancillary services to third-party administrators (TPAs), insurance carriers and insurance companies. Most recently, Knight served as the vice president of payor relations for an occupational medicine clinic in Texas. Knight will deliver claims administration services to businesses in order to build

Athens’ presence in Texas. Founded in 1976, Athens Administrators delivers workers’ compensation and liability claims administration services. Newport Beach, Calif.-headquartered

Alliant Insurance Services has hired John Cox to its Employee Benefits Group as vice

president, based in Austin, Texas. Prior to joining Alliant, Cox was president of the health division of a human resources services organization. Alliant Insurance Services provides property and casualty, workers’ compensation, employee benefits, surety and financial products and services to clients nationwide. The Texas

Department of Insurance (TDI)Division of Workers’ Compensation has reappointed Cassie Brown as commis-

Cassie Brown sioner. Her term will expire on Feb. 1, 2021. Brown has served as workers’ comp commissioner since being appointed to the post in June 2018. She succeeded Ryan Brannan, who left the division on May 1, 2018. Previously, she served as deputy commissioner for Regulatory Policy at the Texas Department of Insurance. She also previously was a policy advisor to former Governor Rick Perry. TDI’s Division of Workers’ Compensation regulates the workers’ compensation system in Texas.

Midwest

Appalachian Underwriters Inc. (AUI) has hired four workers’ compensation underwriting professionals in its St. Peters, Missouri, office. Tara ReganCollins, senior underwriter, will handle the West region for AUI. She previously worked with another national managing general agent (MGA) where she was senior underwriter. Kimberly Ksiazkiewicz, senior underwriter, will be underwriting workers’ comp business in the Southeast region as well as middle market accounts. She most recently served as underwriting supervisor for a national MGA. Eric Nitz, underwriter, will work on accounts under INSURANCEJOURNAL.COM


$25,000 from the AUI Xpress workers’ compensation online rater. He has been an underwriter for the past five years. Kathy Hovis, underwriting assistant, will support the St. Peters underwriting team to rate, quote and bind new workers’ comp business. She has three years of workers’ comp policyholder experience. Wisconsin’s new insurance commissioner, Mark Afable, has made three appointments to the Office of the Commissioner of Insurance’s (OCI) leadership team. Nathan Houdek will serve as deputy commissioner responsible for managing the day-to-day operations and supervising the regulatory, public information, legal, legislative relations and administrative responsibilities of OCI. Olivia Hwang will serve as director of public affairs, responsible for overseeing all communications and legislative relations activities for OCI. Richard Wicka will serve as chief legal counsel, responsible for supervision of OCI’s Legal Unit. He has previously served as OCI’s deputy chief legal counsel and acting chief legal counsel for the last seven years. Chicago-based insurance brokerage

Hub International Limited (Hub) has hired Darren Hickey and acquired a motorsports book of business. Hickey is based in Indianapolis and will join Hub Southeast. He previously served as a vice president in the commercial insurance division of the Indianapolis-based agency Gregory & Appel Inc., according to Hickey’s LinkedIn page. United Group Alliance (UGA), an alliance of independent insurance agencies, hired

Dianne Swanson

as regional vice Dianne Swanson president for Ohio. Swanson will be responsible for membership service and business development for all UGA member agencies in her territory of Central/Southeastern Ohio. She will work closely with Nicole Kaylor, UGA’s regional agency development field specialist. Most recently, she served as INSURANCEJOURNAL.COM

the regional brokerage consultant for Nationwide Brokerage Solutions.

Southeast

Kentucky Governor Matt Bevin has appointed Brenda Collins as a member of the Kentucky Workers’ Compensation Funding Commission. Collins, a benefits distributor for Constellium-UACJ, will represent employers and serve for a term expiring Nov. 18, 2021. The Kentucky Workers’ Compensation Funding Commission was created in 1987 for the purposes of controlling, investing and managing the funds collected to support the Commonwealth’s workers’ compensation program. Rolling Meadows, Ill.-headquartered

Associated Agencies

has hired Stuart Shapiro as an account executive on its sales team. Stuart Shapiro Shapiro will be responsible for expanding Associated Agencies’ presence in the Southeast, specifically in the Atlanta market, and will focus on building insurance programs for real estate companies and retailers. Most recently, Shapiro spent the past five years as vice president of leasing – Southeast, and director of leasing – Southeast for Phillips Edison in Atlanta. Associated Agencies is an independent insurance agency that manages property and casualty, employee benefits and personal lines for business and individuals. Insurors of Tennessee has promoted Daniel Smith to chief marketing officer and added Jim Layman as director of Government Relations. The new positions at the trade association, which represents independent insurance agents in the state, are

Daniel Smith

Jim Layman

effective immediately. Smith previously served as director of Communications for the organization since 2007. Layman joins Insurors after more than seven years with state government, including most recently for the Tennessee Department of Mental Health and Substance Abuse Services as legislative liaison and rules coordinator.

West

CREST Insurance Group LLC in Arizona has named Lindsay Welch vice president of community relations and business development. She Lindsay Welch will be responsible for managing Crest’s philanthropic involvement and brand awareness. She most recently was CEO of her strategic development and sales consulting firm, Autus Strategies. Welch’s former roles include school administrator, non-profit executive director, chief business development director and CEO. CREST Insurance offers personal and business insurance. Island Insurance, a Honolulu, Hawaiibased property and casualty insurance carrier, has named Daniel Lee vice president in commercial lines. Lee Daniel Lee will oversee Island’s commercial insurance division, which includes commercial underwriting, commercial operations, risk control, premium audit and surety bonds. Lee has nearly 15 years of insurance experience and was previously a casualty broker at CRC Group. His experience also includes industry manager for The Hartford. Portland, Ore.-based Fournier Group has named Melissa Larson commercial insurance manager. Larson is responsible for boosting departmental efficiencies, refining procedures, and recruiting, training and managing staff. Larson has been with Fournier Group for more than 17 years. Fournier Group brokers business, personal and aviation insurance. MARCH 4, 2019 INSURANCE JOURNAL | 23


Spotlight: Auto

The Future of Driver’s Licenses?

More States Supplementing Digital with Plastic By Jenni Bergal Stateline

M

illions of people may be able to show their smartphones rather than a plastic card to prove they’re legit to drive, vote or buy a beer in coming years. Louisiana in July became the first state to make digital licenses available to anyone who wants them, and at least 14 other states either have developed a program, run a pilot or are studying the possibility, according to the American Association of Motor Vehicle Administrators. Seventy-seven percent of American adults already own a smartphone, includ-


ing 94 percent of adults under 30, and many state motor vehicle officials think residents will appreciate the convenience of having their driver’s license available in an app. Officials also like that the licenses are connected to a central database and can be updated easily with, for example, suspensions or revocations. And unlike plastic cards that can easily be counterfeited or tampered with, mobile licenses are less susceptible to fraud, they say. But as is often the case when something analog goes digital, privacy advocates worry about the potential for government overreach and fear the digital licenses and motor vehicle databases will become vulnerable to hackers. “These are shiny new things, and states are only talking about the upsides,” said Chad Marlow, a senior counsel at the American Civil Liberties Union in New York. “It is very important the public understand

there are significant risks with digital driver’s licenses. I think it is irresponsible for states to offer them [without explaining those risks].” Colorado, Delaware, Maryland and Wyoming are among the states that have started a digital driver’s license pilot program. Others are exploring the possibility. “This is a quantum leap improvement over what has been the traditional model for how we ask for and receive identification,” said Geoff Slagle, director of identity management at the motor vehicle administrators’ association. “With this approach, I’m able to verify that the MVA actually created that license for you and that it was overseen by them.” Only one state — New Mexico — does not allow driv-

ers to use an electronic copy of their insurance card during a traffic stop, according to the Property Casualty Insurers Association of America.

Supplement Not Replace

Slagle said digital driver’s licenses won’t replace plastic ones; they’ll simply be a supplement. Everybody still will have to carry a physical license for the foreseeable future. Eventually, officials envision people using digital licenses not only for traffic stops and airport ID but also in bars, grocery stores, casinos, banks, doctor’s offices and as voter ID at polling places. About 35,000 of Louisiana’s approximately 4 million drivers have signed up to have their license available on the LA Wallet app, said Paige

Paxton, a field administrator for the Louisiana Office of Motor Vehicles. And on Election Day, the secretary of state’s office allowed voters to display digital licenses instead of plastic ones. “We like to move with the times. We saw the potential,” Paxton said. “Our plan is to eventually make it so your registration, insurance or any credential would be on LA Wallet.” The program was jointly designed by the motor vehicles office, the Louisiana State Police and the Department of Public Safety. It was developed for free by Envoc, a Louisiana software firm, Paxton said, and there has been no cost to the state. Louisiana residents can

continued on page 26


Spotlight: Auto

Nicole Johnson, right, asks a customer to take off his hat for a photograph at a Texas Department of Public Safety driver’s license office in Houston last year. Officials in more than a dozen states are considering offering residents digital driver’s licenses. Photo: Godofredo A. Vasquez/Houston Chronicle via The Associated Press

continued from page 25

download the Apple or Google app for free but must pay a $5.99 activation fee (most of which goes to the software developer; the rest to Google or Apple) that covers them until their driver’s license expires. Drivers must use a PIN number, fingerprint or both to access their license, which is linked to the DMV data system. “This is not a static thing,” Paxton said. “It’s a live connect.” For now, the app only can be used for stops by Louisiana police and for voting, and drivers still must carry a physical license for the foreseeable future, Paxton said. Louisiana’s Office of Alcohol and Tobacco Control is developing a policy and training materials for its officers. LA Wallet was developed after the state legislature passed a measure in 2016

allowing the creation of digitized licenses as an alternative to physical ones. To address privacy concerns, the law says that displaying a digital license doesn’t serve as consent or authorization for police or anyone else to search or view any other data or app on the mobile device. And at the request of state police, Paxton said, the policy goes even further: Under its hands-off procedure, police can check the license without having to take the phone from the driver. “Our state police were concerned,” Paxton said, “that there was a potential that someone could say, ‘Hey, you broke my phone.’ So, who’s liable for that if a screen is shattered?” The system has been working fine for state troopers, said Lt. Nick Manale, a Louisiana State Police spokesman.

“We’re not aware of any problems with it, as long as the driver has cellphone connectivity,” he said. “And they always have a physical driver’s license as a backup.” The app, which Paxton said does not track users’ location, also is built so the screen only shows what’s needed. If a store clerk or bouncer scans it, for example, the app would show only whether the person is old enough to drink.

Digital Skeptics

But critics such as the ACLU’s Marlow are skeptical that digital licenses in Louisiana or anywhere else are a good idea. By unlocking the license, phone owners could expose their data to whoever is checking it, Marlow said. And, he added, while an officer normally would need a warrant to search a phone, in the real

world, drivers who don’t know the law could be pressured into handing over the phone, allowing access to everything from contacts to text messages. And he worries hackers could access data being transmitted to and from the DMV database. A group formed by the motor vehicle administrators’ association has been working on a plan to provide standards that would make it possible for digital licenses to work across states. This way, a license from one state could be checked and verified by a device in another. Wyoming is one of several states that joined a pilot last year to test digital licenses. As part of the first phase, Wyoming officials wanted to see, for example, whether information could be transferred from a tractor-trailer digital driver’s license


directly to a highway patrol officer’s cruiser behind the truck. It worked, said Misty Zimmerman, a deputy program manager at the Wyoming Department of Transportation. Wyoming is now planning the second phase of its pilot program. “The first phase was very smooth. There were no hurdles whatsoever,” Zimmerman said. “We have not made any formal commitment [to offer digital licenses to the public]. However, from a department standpoint, I feel we would greatly benefit from having this option for our citizens.” Biometrics Iowa, which in 2016 became the first state to start a digital license pilot program, is moving ahead with its plan to offer mobile licenses, turning to a system that uses biometrics and beefed-up security. The state hired a French multinational company that specializes in providing secure credentials, IDEMIA, to develop the pilot for just under $50,000, said Mark Lowe, director of the state Department of Transportation. After a competitive bidding process for the current digital license project, Iowa awarded the company a contract of $1.2 million initially. It hopes to start the digital license by late 2019 or early 2020. The driver’s app would be able to interact with another device used

‘That’s ‘1984’ stuff. You’re opening up a new channel of attack or breach or nonconsensual monitoring of a person’ Alan Butler, senior counsel, Electronic Privacy Information Center by the person checking the license. The device-to-device exchange would authorize information sharing and verify that the person is who he says he is. “The really powerful thing is that once we bind you to that credential and verify it, you can use it for hunting and fishing licenses, weapons’ permits, tax returns — all sorts of things,” Lowe said. “There’s a ton of convenience and efficiencies.” Iowa is working with other states to make sure its system can be used outside the state. Lowe said that’s the biggest hurdle — developing common standards across states. But privacy advocates are concerned about states creating digital license programs that use device-to-device communications rather than just scanning a barcode, as is done in airports and grocery stores. “That’s ‘1984’ stuff,” said Alan Butler, senior counsel at the

Washington, D.C.-based Electronic Privacy Information Center, a nonprofit research group. “You’re opening up a new channel of attack or breach or nonconsensual monitoring of a person. It creates substantial privacy and data security risks with no added benefit.” And the ACLU’s Marlow worries about expanding the use of digital licenses. “What’s stored on your physical driver’s license is limited,” Marlow said. “But the digital one has the potential to store a lot more information, and that could be hacked.” But Slagle, of the motor vehicle administrators’ group, said the ACLU should be more concerned about plastic licenses, which are vulnerable to fraud and counterfeiting. “They should be super excited about something coming along that helps to solve some of those problems,” he said. Slagle and Lowe predict that every state eventually will offer digital licenses. “It is not a question of whether or not this is happening, it’s a question of how fast this happens,” Slagle said. “We’re going to do this as fast as we can, but we want to make sure that we get it right.”

Jenni Bergal is a veteran journalist who covers transportation, infrastructure, and cybersecurity for Stateline. She has been a reporter at Kaiser Health News, the Center for Public Integrity and the South Florida SunSentinel, and was supervising senior editor of “Weekend Edition” at NPR. Bergal has spent much of her career doing investigative reporting. She has won numerous national awards, including the Loeb Award for Distinguished Business and Financial Journalism, the National Press Club Consumer Journalism Award and the Worth Bingham Prize for Investigative Reporting and is a two-time Pulitzer Prize finalist. Source: Stateline, an initiative of The Pew Charitable Trusts.


News & Markets College Basketball Star’s Busted Shoe Episode Raises Loss of Value Insurance Question

By Joedy McCreay

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oon after Duke University star freshman Zion Williamson’s shoe ripped apart, Nike’s stock price took a hit. The freak injury during one of the college basketball season’s marquee games immediately sparked debates about everything from the shoe manufacturer to insurance issues and whether the likely NBA lottery pick should risk his professional future by continuing to play for the top-ranked-fornow Blue Devils. Williamson has a mild right knee sprain and is progressing as expected, team spokesman Mike DeGeorge said. Nike, which manufactured the shoes

Williamson was wearing, also was feeling the impact of the injury. The company’s stock dropped as the sportswear manufacturer became the target of ridicule on social media. A spokesman said Nike has begun an investigation into what it called an “isolated” event. “Shoes have failed before, but not as visibly,” said Matt Powell, a senior industry adviser for sports for the NPD Group, a market research firm. Playing before a crowd littered with celebrities — from Spike Lee to former President Barack Obama — Williamson was hurt in the opening minute of the game as his Nike PG 2.5, from Oklahoma City

28 | INSURANCE JOURNAL | MARCH 4, 2019

Thunder star Paul George’s signature sneaker line, tore apart. Williamson wears that model frequently during games and hadn’t had any obvious problems. The 280-pound Williamson is one of the most powerful players in the game, and he tried to plant with his left foot as his right foot was slipping. The blue rubber sole ripped loose from the white shoe and Williamson’s foot came all the way through the large gap. He ended up in an awkward-almost-split, clutching the back of his right knee. He walked to the bench and a few minutes later headed to the locker room, leaving the wrecked shoe under his chair. George said that he has talk-

ed with Nike to see what went wrong and what happened to the shoe. “It hasn’t happened to me as long as I’ve been in this shoe,” George said. “We’ve made three generations, going on four now of my shoe, of being successful. So I didn’t necessarily feel any way about that part — the negative part of it. My only concern was for Zion, honestly.” Since Duke is a Nikesponsored school, Williamson has his choice of that company’s footwear. “I’ve seen guys bust through shoes but not sprain their knee,” coach Mike Krzyzewski said. “He’s gone down a couple times where he’s slipped and saved the ball. That’s what I INSURANCEJOURNAL.COM


thought happened. He goes so fast that maybe if there’s something slippery, that happened.” The injury also set off a fresh round of debate about whether Williamson — the possible No. 1 overall pick in the NBA draft, should he leave Duke after his freshman season — would be wise to end his college season in an attempt to avoid an injury that could jeopardize his pro career. NBA Hall of Famer Scottie Pippen made the case for it a month ago, saying on ESPN that “I would shut it down.” Asked to respond on Feb. 5 to those comments, Williamson turned to his locker room sidekick, walk-on Mike Buckmire, and asked, “Buck, would you hate me if I shut down the season? “I couldn’t do that to my

DIRECT

teammates,” Williamson said. Now that he’s actually hurt, it’s unknown if his feelings have changed. It’s also unclear, if he decides to continue his college career, whether Williamson has an insurance policy to protect him in case of injury like many other elite college athletes have purchased. George could not confirm a report by Action Network that Williamson had an $8 million loss of value policy written by Winston-Salembased International Specialty Insurance that would pay out if he slipped past the 16th pick in this June’s draft. Officials at ISI did not return messages. Loss of value polices are not offered by the NCAA, but the governing body does offer dis-

ability insurance. Spokeswoman Stacey Osburn said the NCAA allows schools to purchase loss of value policies on a player’s behalf. She added that the NCAA also facilitates a disability insurance program for players in five sports, including men’s basketball, in which athletes can purchase policies with preapproved financing to protect against future loss of earnings due to injuries suffered in college. Duke spokesman Jon Jackson said the university does provide the resource for athletes to purchase policies in limited cases but declined to comment. There are no NCAA restrictions on how much insurance a player can purchase, or if the player wants both types of pol-

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icies, Osburn said. A few years ago, former South Carolina running back Marcus Lattimore took out a disability insurance policy. He purchased a $1.8 million insurance policy through the NCAA program. Lattimore had a clause in his policy that it would pay out if he did not play four NFL games. Lattimore never played in an NFL game but only received about $270,000 from the policy, in part because he did get a signing bonus when he was drafted by the San Francisco 49ers in the fourth round. Copyright 2019 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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MARCH 4, 2019 INSURANCE JOURNAL | 29


Special Report: Small Business

Small Business Risks in a Cyber World Why Main Street Needs to Lean on Insurance Partners By Elizabeth Blosfield

W

hen it comes to cyber security events, “hours make a difference, let alone days” in terms of response time, according to Tim Francis, enterprise cyber lead at Travelers. For small and mid-sized businesses, formulating a cyber response plan can be a challenge without the right insurance coverage, education and resources, he told Insurance Journal. “If you have an event, and you’re a small business…that not only doesn’t have insurance, but doesn’t have access to the network of professionals that an insurance carrier would have, [it] means you’re really going to be behind the eight ball,” he said. Francis was a panelist at the 2019 PLUS Cyber Symposium held February 6 and 7 in New York City, during which a group of panelists discussed challenges and opportunities around cyber insurance for small 30 | INSURANCE JOURNAL | MARCH 4, 2019

and mid-sized businesses. know [cyber insurance] as well “The impact is real,” he as they would know some othsaid. “Sometimes people feel er lines of coverage, because like, ‘Well, I’m a small or midit’s new, and because they’re sized company, and I’m not trying to run a small business,” he said. “I think once a going to be a target.’ Because small business is educated on they read headlines about the fact that cyber insurance nation state actors taking exists in the first place, has a down major corporations, familiarity with what it does it creates this culture where and maybe, more importantly, they think that they have to Tim Francis understands that there are be a targeted entity.” The Travelers coverages that are designed With this in mind, Francis for small business, then I think stated he believes a culture they really see the value.” shift needs to happen in which small PLUS Cyber Symposium panelists companies can better understand they are agreed. perhaps more vulnerable to cyber attacks “I think having the conversation [is than large companies. This is because important] and not just saying, ‘Here’s smaller organizations may lack the financial and personnel resources to secure this insurance policy. This is what it does. their systems and react to an event if one Have a great day. We’ll talk to you in a occurs. This shift, Francis said, can start year at renewal,’” said Adam Abresch, with the cyber insurance industry. vice president of Cyber Risk at Acrisure. “I “Small business owners don’t often just don’t think that delivers a lot of value.” INSURANCEJOURNAL.COM


Abresch added that the cyber insurance industry should be helping clients understand what to do when a breach happens and walking them through that process ahead of time.

our products and how our attacks are most often a result proposition relates to small of employee error, which runs businesses. We have a lot of the gamut of not installing a small businesses that still computer patch, falling for a aren’t sure of what a cyber poliphishing email or even taking cy actually does.” work home where it is sus Burns added that as cyber ceptible to being misplaced or attacks among small businessstolen. es have skyrocketed over the Within the context of past two years from a frequenbusiness email compromise, Schafle added attackers will cy and severity standpoint, Sian Schafle Mullen Coughlin run search terms within a they are costing more money for small and mid-sized busicompromised email account nesses. in order to identify the target and the tone “We just need to do a better job as an of typical conversations to create a fake industry — cyber insurers in email that seems real. particular — at articulating what “We see some organizations not really threats are facing small busiappreciate the incident they had,” she nesses from a cyber perspective, said. “We’ll get on the phone, and they’ll “When a breach strikes, and then how cyber insurance that’s chaos,” Abresch said. say, ‘Yeah, someone hacked into our email “That’s not the time to figure can help protect against those account, but we don’t have any protected out what to do. That’s the threats,” he said. information. There are no socials.’ I can time to execute on a plan. tell you I’ve never had a business email Types of Threats As a broker, I try to effeccompromise case that came back with As cyber attacks become tively communicate how to no protected information in the email more sophisticated, Sian respond.” account. There’s usually something. But James Burns Schafle, partner at Mullen Indeed, Francis said that you have organizations that don’t appreCFC Underwriting ciate what they experienced and what is having a cyber insurance polCoughlin, stated during the required, and they’ll stick their head in the icy in place is often less about PLUS Cyber Symposium panel sand and do nothing.” the capacity to tap into a pool of money discussion that the attacks are less about and more about the ability to tap into a information and more about opportunity. pool of resources. “You may not be targeted because you “I guarantee you that if we look across have certain data,” she said. “You may be anyone’s portfolio of business in a small or targeted because there’s an opportunity to mid-sized space, those companies don’t get into your network and have somebody already have on retainer a forensic invesfall victim. The types of attacks have really tigator and breach notification system increased in sophistication over the past and wouldn’t know where to begin if that few years, and we see the small and midhappened,” he said. “So the value of insur- dle market organizations being the ones ance is not only what should the response that struggle the most with defending be, but to understand and truly appreciate against those attacks.” that when an event takes place, there is Abresch added that increasingly, a single attack is being created by a hacker with probably little chance their staff will be Panelists agreed that the solution will the purpose of being distributed to a large equipped to handle it.” come through a culture shift in which amount of people. In a recent interview with Insurance small and mid-sized companies begin to “Hackers are lazy to a degree,” he said. Journal, James Burns, cyber product “It doesn’t necessarily matter to them realize the attacks can happen to them leader for CFC Underwriting, echoed the and be just as severe as when they happen which company it is, and a lot of the tools idea that the conversation around small to a much larger organization. that are being used now to assess a combusiness’ lack of understanding of cyber pany’s cyber posture and see where there “In many of these cases, it’s not personinsurance needs to start with those in the al,” Francis said. “No one actually even are weaknesses and strengths are openly industry. cares necessarily who you are. They’re available. So if the good guys can do that, “I guess that’s on us — the cyber insurance industry,” he said. “We need to still just the bad guys and are just trying to so can the bad guys.” continued on page 32 do an even better job of articulating how Francis stated that for small businesses,

‘The small businesses do tend to lean on their insurers a little bit more for advice, for risk management, for pre-loss services in terms of things like formulating a response plan, and that’s absolutely fine.’

Small businesses’ cyber attacks are most often a result of employee error, which runs the gamut of not installing a computer patch, falling for a phishing email or even taking work home where it is susceptible to being misplaced or stolen.

INSURANCEJOURNAL.COM

MARCH 4, 2019 INSURANCE JOURNAL | 31


Special Report: Small Business continued from page 31

ance and how to create a response plan, where to start or even what questions to ask. “They should understand that’s okay, and there are resources out there that can help them with that,” Francis said. “One of the virtues Incident Response of being a small business is while For smaller organizations, they might not be fully aware the challenge with incident of their exposures, it’s okay to response when a breach have a plan that’s proportional occurs is primarily around and reasonable for their own time and resources, panelists business. They don’t necessarily stated, adding that this is have to have the same level of where the insurance industry an incident response plan that should step in yet again. a large company might have. Adam Abresch “Probably the most They’ve just got to put a plan in Acrisure important thing is not only place that’s appropriate for their understanding the vulneraorganization.” bilities in terms of, ‘If an event happens, Francis said that in many cases, a small what’s going to be the impact?’ But also business’ incident response plan can simply be to call its insurer. understanding basic incident response, “I would be happy in many cases if their such as, ‘Should an event happen, what do you do next?’” Francis said. “Part of an incident response plan was, ‘I have a numinsurance program is also providing access ber I know I can call, and things will begin to happen,’” he said. “Sometimes, I would to some of those services that can help say small businesses are actually better in develop incident response plans, follow an event because big companies tend to templates or engage with consultants.” think they can solve it themselves because Francis added that it can be unrealistic they have IT staff, they have resources, to expect smaller organizations to have and that almost always goes wrong, but it the appropriate knowledge of cyber insurget someone to open that email. They’re just as happy to take company A’s money versus company B’s money, and they’re certainly happy to take from both.”

32 | INSURANCE JOURNAL | MARCH 4, 2019

takes a while for them to appreciate how wrong that’s going.”

One of the virtues of being a small business is while they might not be fully aware of their exposures, it’s okay to have a plan that’s proportional and reasonable for their own business. Small to mid-sized companies, however, are more likely to admit they need someone to help and bring people in who know what they’re doing and do this everyday, he said. Burns added that this type of response once again points to the role of the insurance industry in managing cyber risk and educating small and mid-sized companies about the space. “The small businesses do tend to lean on their insurers a little bit more for advice, for risk management, for preloss services in terms of things like formulating a response plan, and that’s absolutely fine,” Burns added. “That’s what we’re here to do. Those are the tasks we’re here to perform as cyber insurers.”

INSURANCEJOURNAL.COM


Small Business Owners Don’t Trust Commercial Insurance Buying Process: Accenture

S

mall commercial insurers aren’t giving their client base what they want — a simple and easy purchase experience. Whether online or through an agent, business owners are left confused, frustrated and having to seek extra advice before they can find suitable coverage, according to new Accenture research. “Small businesses are extremely frustrated with the process of commercial insurance, whether they purchase directly or through an agent,” the report concludes. “Many report that they do not trust the sales process or fear that they are inadequately covered by the policies they eventually buy.” Among the report’s findings: • “Overwhelming,” “confusing” and “not fun” were words business owners used to describe pursuing the purchase of commercial insurance for the first time. They were confused about how insurers collect data, insurance industry language and how much coverage they actually needed. Businesses said they wanted the quoting process to be faster and simpler than it is. • Business owners may start pursuing the direct/online purchase of insurance, but they often feel overwhelmed by the complexity of it all and can’t find what they need. They end up needing more time and consultation with others. • Business owners are jaded about sales pitches from commercial or personal insurers, leaving them cynical and on a quest to find unbiased advice from somewhere else before they make a purchase. • Business owners complain that commercial insurance policies aren’t flexible, wishing instead that they could find policies that adjust to their needs over time. The study argues that carriers should streamline information small business owners need to receive quotes or policy information; use artificial intelligence to update policies and improve coverage; INSURANCEJOURNAL.COM

and rely on clear, non-jargon language so people who don’t know insurance insider language can pursue buying a policy easily.'

‘Small businesses are extremely frustrated with the process of commercial insurance…’ There’s plenty of room for improvement. As Accenture noted, the small commercial insurance market has no single carrier with more than a 4 percent market share. Also, more than 60 percent of small businesses in the United States will be owned by millennials and Gen Xers by 2020, according to data cited by Accenture, and those demographics prefer “digital purchases and self-service to faceto-face” interactions or the telephone. That means carriers will win and stand out if they revamp their buying process for small commercial business customers in a way that addresses their concerns and preferences, Accenture said.

“Carriers that want to win need to leverage design thinking co-creation with customers, imagination and experiential research capabilities to create and rapidly refine their target segments, channels and touch points,” Accenture said in its study. Accenture, working with the consulting company Fjord, based its conclusions on interviews with 12 small business organizations centered around identifying past and future insurance needs. They also held a business owner workshop with seven small business organizations to gauge participants’ perspective on buying insurance digitally and what carriers needed to do to boost business owners’ willingness to buy insurance directly. The report is based on participation from 19 total business owners, and it also involved “ethnographic research,” where researchers observe or interact with study participants in their real-life environment. Interviews and the workshop took place in the U.S. in July 2018. The Accenture study is titled “Winning the Hearts and Minds of Small Business Insurance Buyers.” MARCH 4, 2019 INSURANCE JOURNAL | 33


Special Report: Small Business What Main Street Wants from Insurance And Why in 2017, and direct writers accounted for approximately 30 percent,” said Michael Barry, head of media and public affairs for the Insurance Information Institute. Citing I.I.I. data, Barry said that “this would indicate businesses favor doing business with independent agencies, brokers, general agents and managing general agents.”

The Gelato Maker

By Mark Hollmer

P

atricia Ross, Raphael Strumlauf and Kate DeNeveu each have at least one thing in common: They’re generally happy with their business insurance. Each owns a business at the downtown pedestrian mall in Charlottesville, Va. They’re all in their early 30s and theoretically fit the industry model of a younger customer that shouldn’t care for the old model of buying insurance through an agent or broker. But each person continues to rely on an agent or broker. While some want more technology and the flexibility to use advances such as a customer portal, they say that the existing process gener-

ally works just fine. There’s mixed opinions on that topic. A recent study from Accenture concluded that millennials and Gen X small businessowners prefer digital purchases and self-service rather than using the telephone or talking to an agent/broker face to face. (See page 33) Ross, a gelato maker; Strumlauf, co-owner of a neighborhood grocer; and De Neveu, co-owner of a local comic book store, generally don’t fit that template — something that one insurance insider said is not surprising. “The industry’s latest research shows agency writers accounted for about 70 percent of commercial property/ casualty net premiums written

34 | INSURANCE JOURNAL | MARCH 4, 2019

Patricia Ross (most people call her P.K.), is the 35-year-old owner of Splendora’s Gelato Café, located at a prominent spot midway through the red brick-paved pedestrian mall. Her store is painted in a yellow/ mustard color that feels bright and sunny even on a dark, rainy day. During a break in making a new batch of hazelnut sorbet, Ross explained she gets coverage through a broker that covers both product loss and workers’ comp for her business and 11 employees. She’s been with her broker for eight years and said she’s worked with two different individuals from the firm over that time, and she’s quite happy with the outcome. “I get an entire notebook every year, and it is at least 120 pages of what is and is not covered with my insurance premiums…There are all these vagaries I don’t need to have in my head because I have actual humans that are familiar with the industry and familiar with what my needs are as a small business,” Ross said. “I feel like brokers make things easy for me in a way that online

‘I feel like brokers make things easy for me in a way that online facilitation doesn’t necessarily offer.’ – Patricia Ross, owner, Splendora’s Gelato Café

facilitation doesn’t necessarily offer.” Ross said she’s not naïve about her coverage and realizes that some clauses exist to prevent her “from getting any money in any circumstance, but again, I’ve got brokers on my side, so they will, in general, find a way for me to get some sort of compensation.” As an artisanal gelato maker, she said she’s content using a traditional broker for her business needs. At the same time, she has one request if carriers/brokers are reading: Please make insurance language more accessible. “You just kind of glaze over in the middle of it when you’re trying to read the contract,” she observed.

The Grocer

Raphael Strumlauf is INSURANCEJOURNAL.COM


‘Once a year I just have to update our sales information and employee information and stuff like that. Aside from that, it’s fairly simple.’ – Raphael Strumlauf, coowner, Market Street Market

co-owner with his father, Steve, of Market Street Market, a small but well-packed grocery store housed in a light blue, 19th-century building just around the corner from the Charlottesville pedestrian mall. About 18 full- and parttime employees work at the store, which carries grocery basics plus extras such as a wide wine selection along with locally made sausage and baked goods. Strumlauf, 31, speaking from a low-key office at the back of the store, said he found his current coverage about four years ago by getting a quote online. The service directed him to an agent about an hour away in Richmond, who later drove down and set him up with his current policy. Strumlauf needed new coverage after his previous carrier INSURANCEJOURNAL.COM

dropped the grocer following some major storms that knocked out power for three days, leading to a large claim. Strumlauf said the insurance buying process is “reasonably easy,” despite the insecurities about what happens if there’s ever need for a major claim. “In terms of the process, paying [for coverage] and dealing with the agent, it’s pretty minimal,” he said. “Once a year I just have to update our sales information and employee information and stuff like that. Aside from that, it’s fairly simple.” Strumlauf said he’s fine dealing with an agent but does like the ease that doing business online brings him, even if it is just through email. “When you do it online, you can do it at your own speed,” he said. “If I am really busy, sometimes it is just easier to reply to an email with some facts or to sign in and update my credit card information or something like that,” Strumlauf said. “I can just do it when I have the time.” “They’re amazing,” she said. “They always help me whenever I have issues.” Ross said she doesn’t mind that the forms are sometimes complicated. Strumlauf said his insurance process works just fine right now without “any huge issues.” At the same time, he said he wished insurance could be customized to “exactly what you need.” “I think the one big issue that I could find with it is the fact you’re always paying for things you don’t really need because they are bundled in, and there’s this and that,” he said. “There are certain things you’re required to

have because of your lease or because of common sense, but it’s not always broken up or able to be tailored to exactly what you need.” Still, Strumlauf said he realizes, as a customer, “you can have the deductible you want to have, and you can take a little bit more or less risk.” In dealing with agents, however, Strumlauf said he would also push to have an online portal as an option, so he could easily upload required documents.

The Comic Book Store Owner

Kate DeNeveu, 34, is co-owner of Telegraph Art & Comics with her husband, David Murray. The store is on one end of the pedestrian mall, with a cinema complex, coffee shop, restaurant and bars among its immediate neighbors. Inside, the store is

‘It was really nice to be able to talk to [an agent] who can advise us on what we need and who we trusted. That was a major part of it for us.’ – Kate DeNeveu, co-owner, Telegraph Art & Comics

multicolored, lined with new comics, graphic novels and custom cards, with posters, t-shirts and other art also for sale. While DeNeveu is technically a millennial, she said she prefers to work with an insurance agent. The first agent she found for their business was within walking distance, and they obtained their business liability coverage and signed necessary documents via email and other programs. DeNeveu said the coverage is “adequately high tech” and works just fine. “We’re really happy with what it is,” she said. “It’s nice knowing that our inventory is protected and that our business is protected from lawsuit kind of stuff,” she said while sipping coffee at some outdoor seating near her store. DeNeveu added she is not interested in obtaining insurance coverage online. “One of the reasons it would make me nervous to go online and do that stuff for myself is that I am not an insurance specialist. I don’t really know much about it,” she said. “It was really nice to be able to talk to [an agent] who can advise us on what we need and who we trusted. That was a major part of it for us.” The added bonus: DeNeveu’s insurance agent helped her and her husband to obtain homeowners coverage before they opened their store. I’m quite happy with how everything was done and our current status, insurance-wise,” DeNeveu said. “I really hope we never have to use insurance, but we’re happy it’s there,” DeNeveau added.

MARCH 4, 2019 INSURANCE JOURNAL | 35


Claims Journal No More Nuts at the Ballpark for Kids’ Sake By Pat Eaton-Robb

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erry Adamowicz hoped that a meeting with Hartford Yard Goats officials might lead to a few peanut-free days or maybe a peanut-free section at the team’s Double-A baseball stadium, so her son and other children with food allergies could enjoy a game. The team decided to go a bit further. The Double-A affiliate of the Colorado Rockies announced this month it is going completely peanut free — no more peanuts, Cracker Jack or any other food that could put kids with the potentially deadly peanut allergy in anaphylactic shock. “Everyone wants their kids to be kids and be part of the group,’’ said Adamowiz, whose 2-year-old, Sam, has a severe peanut allergy. “Our biggest worry is would he even be able to go to a game? Now we know, stress free, he can go to the games with his siblings and we don’t need to worry about it.’’ The organization Food Allergy Research & Education says 1 in every 10 children has some sort of food allergy, and up to 2 percent of children have an allergy to peanuts. Lisa Gable, executive officer of FARE, says many teams and colleges have made some areas peanut free, or they have set up special games for fans with allergies. The group is partnering with the NBA for a series

of games next month, which will feature nut-free concession stands or sections. But, the Yard Goats, she said, are the first team affiliated with a major league to simply ban the nuts. Northwestern University has made the non-conference portion of its football season peanut free since 2016, but recently ended the practice at basketball games when it opened a new arena with a different food vendor. Hartford’s decision takes on added significance, Gable said, because it’s a baseball team, a sport linked by song and tradition to peanuts and Cracker Jack, making it all the more significant, she said. “But we appreciate every team that partners with us in some way and whatever accommodation that a venue deems appropriate,’’ she said. “It’s just important that people

36 | INSURANCE JOURNAL | MARCH 4, 2019

know there is a safe space, and where that safe space is going to be.’’ Yard Goats President Tim Restall says he has two nephews with food allergies, and the team’s decision was not made to get publicity or drive up business. But he notes that since making the decision, support has come from across the country. “I’ve received emails from as far away as Virginia and Pennsylvania from people telling me they are going to vacation in Connecticut so they can see a Yard Goats game,’’ he said. “I received one last night from a father of four, one of whom has a peanut allergy, who has never been able to take his kids to a professional game. They are going to trav-

el to Hartford this year to do that.’’ And, yes, the famous song has not been forgotten. The opening lyrics to “Take Me Out to the Ball Game’’ go: “Take me out to the ball game/Take me out with the crowd/Buy me some peanuts and crackerjacks/I don’t care if I never get back.’’ The Yard Goats are now running a contest on social media, asking fans to rewrite the key lyrics. The winner will get to lead fans in singing the song on opening day. Copyright 2019 Associated Press. All rights reserved. INSURANCEJOURNAL.COM


How to Prevent Spread of Infectious Diseases in the Workplace

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t may be obvious when people get injured at work, but it may not always be apparent when people acquire infections resulting from exposures at work. The National Institute for Occupational Safety and Health (NIOSH) reviewed infectious disease investigations in workplaces across the U.S. to understand the range of cases, the risk factors for workers and ways to prevent infectious disease transmission. NIOSH researchers reviewed published scientific literature describing 66 U.S. workplaces from 2006 to 2015. The need to identify at-risk populations a work, how diseases spread and how they can be prevented has been highlighted by experiences with anthrax, severe acute respiratory syndrome (SARS), influenza A (H1N1), the Ebola virus and several other clusters of infectious diseases in the workplace. “The cases we reviewed allowed us to identify a range of diseases, specific settings

and activities that are at an increased risk for certain infectious diseases, and employee and workplace factors that often facilitate transmission of the disease,” said Marie A. de Perio, MD, one of the lead authors of the study. Researchers found reported cases appear to be concentrated in specific industries and occupations, especially the healthcare industry and among laboratory workers, animal workers and public service workers. These include those who come in contact with ill persons or with livestock, poultry or other animals as part of their job. In addition to becoming infected themselves, some workers may serve as vectors that spread the disease. For example, workers in food preparation and serving-related occupations have been identified as sources of transmission in foodborne outbreaks. NIOSH says considering occupational risk factors, strengthening biosafety pro-

grams and involving epidemiologists, physicians, industrial hygienists and engineers could help prevent spread of occupationally acquired infectious diseases to co-workers and the public. “What is important to realize is that effective prevention and control measures begin with using the occupational health and safety hierarchy of controls as a framework, with the elimination of hazards being the most preferred occupational health and safety measure,” said Dr. de Perio. “Following the elimination of the hazard, the next best things are isolating workers from the hazard, changing the way people work,

and personal protective equipment.” Measures include improved ventilation systems in workplaces, vaccination of workers and personal protective equipment appropriate to the pathogen. “Although it is clear from the literature review that many groups of workers are at risk for infectious diseases, we may be missing some clusters in workplaces, given that surveillance of work-related infectious diseases is not done systematically,” said Sara Luckhaupt, MD, MPH, co-author of the study. “We also may be missing exposures, industries and occupations not readily identified as at risk.”

Romaine Lettuce Outbreak Source Still a Mystery

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.S. food regulators say they weren’t able to identify a contamination source for a food poisoning outbreak tied to romaine lettuce this fall. The Food and Drug Administration says it couldn’t determine how a water reservoir on a Santa Barbara County, Calif., farm became contaminated with E. coli or how lettuce from other farms may INSURANCEJOURNAL.COM

have been contaminated. The FDA says leafy greens’ short shelf-life makes it difficult to investigate outbreaks. It notes food safety has been an issue with leafy greens, and the industry should review operations to minimize risk. The Centers for Disease Control and Prevention says there is always risk of foodborne illness when eating raw produce.

MARCH 4, 2019 INSURANCE JOURNAL | 37


Idea Exchange: Home

Striking a Balance

Between Big Data and Underwriting Integrity

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rom accountants to advertisers, everyone is talking about the power of big data. Underwriters and insurance agents By Richard McCathron are no exception. While big data is undoubtedly an extremely valuable tool when it comes to risk assessment, policy pricing and customer service, it doesn’t need to upend the entire industry. The insurance experience can improve with the use of big data, but it’s important to remember that insurance does effectively protect millions of Americans. Consider this scenario: your insured is getting ready to close on a home and needs to show a mortgage lender evidence of insurance to finalize the loan. To take out a homeowners insurance policy, they’ll have to answer all sorts of questions about the home. Of course, they didn’t build the house and have never lived in it. Chances are, they’ve only seen it a few times. Yet, almost every insurance carrier will ask how old the home’s roof is before providing a quote. Even though the material and age of the home’s roof are some of

the biggest factors in designing a

policy and determining rates, most people provide an approximation. In some cases, they just guess. The same scenario can apply to a range of carrier questions, meaning coverage is often based on inaccurate answers to pertinent questions.

Big Data and Homes

Big data is helping solve that problem by revealing the age of a home’s roof without asking the customer directly. In addition to getting a more reliable answer, this also reduces friction, and that means fewer awkward phone calls between a buyer, their real estate agent and the home’s seller to get information about the home. Sounds incredible, right? A streamlined application process and a more precise pricing model has helped insurers create innovative products and attract a large base of policyholders. Unfortunately, some companies ignore industry fundamentals in their technology-centric process. They are

transparent that their goal is exactly matching a policyholder with their propensity for trouble. Identifying the likelihood of risk for each customer and charging them accordingly is not how insurance works, though.

Insurance is about spreading risk over a large group of people. The idea has long been that everyone pays a little so that no one has to pay too much. It’s a balance between possibility and reality that keeps the average homeowner’s premiums affordable while providing a financial safety net in case disaster strikes. If insurers calculate a personal risk profile with an exact match for what each policyholder will face, the risk is not spread. Exact match doesn’t work for the customer, either. If someone will have a $10,000 claim each year and their insurer can predict that exposure perfectly, why would they pay the $11,000 premium it would take to cover their claim and the insurance provider’s overhead? Exact exposure pricing is actually the opposite of insurance. This is part of the reason that several insurtech companies that rely on big data and automated underwriting have experienced unsustainable loss ratios. Worse yet, their customers are treated like policyholders rather than people; they get ushered between bots until their claim is settled, often with a lower payout than they feel their circumstances require. Still, these providers have lost money at the end of the year. In a spreadsheet, it may be easy to assign a person to a number. In reality, risks are dynamic — they evolve. Data is just one component in the insurance equation. It must be combined with human inputs and insurance expertise to achieve both proper coverage and proper pric-

ing. It’s also important to recognize that data is not infallible. It varies


from one source to another. Some sources are more reliable than others. And data needs to be monitored well beyond the new business stage. Policies are not a “one and done” calculation. At Hippo, we use multiple, verifiable data sources to identify risk throughout the life of the policy. We also blend the data with AI and machine learning to determine which data components are most trustworthy and how to segment certain risks. By embracing new technologies and big data, we have lowered premiums and created a better experience for customers without sacrificing the integrity of our policies. We’re not just insuring homes, we are insuring families. For many, a home is where children grow and memories form. It’s important for providers to remember that insurtech is made from two words: insurance and technology. Data definitely plays a key role in the process, but it must be integrated properly into an insurance model that spreads risk. Even though there are touchpoints where we can remove friction, accurate underwriting INSURANCEJOURNAL.COM

tends to require some human intervention.

It’s a balance between possibility and reality that keeps the average homeowner’s premiums affordable while providing a financial safety net in case disaster strikes. Human Touch Still Needed

On top of deciding which sources are trustworthy and ensuring that inputs are accurate, there will be times when a provider needs to ask the customer a question to ensure they are properly covered and the coverage is appropriately priced. Along the same lines, sometimes a seasoned underwriter will see a policy and realize that it needs to be adjusted. Without recognizing that data is one of several inputs, it’s likely that a provider will under- or over-insure their customers at either inadequate or excessive prices.

As I said, big data does present big opportunities for the insurance industry, but too many disruptors are too keen to find an absolute solution. While data is transforming the way we evaluate and underwrite risks, it is not the be all and end all solution. Considering the nature of insurance, it’s unlikely that such a solution exists — or needs to. In addition to various data and human inputs, we must not forget the input of experience. Since the establishment of the first fire insurance companies more than 300 years ago in London, the industry has learned a few things about risk, data and pricing. Although there is room to improve and innovate, let’s not forget that there are a few things that we can learn from three centuries of experience. The insurtech revolution must be based on a balance of technology and underwriting integrity in order to modernize the industry in an effective way. McCathron, CPCU, CIC, is the chief insurance officer at Hippo Insurance. MARCH 4, 2019 INSURANCE JOURNAL | 39


Idea Exchange: Flood

Opening the Door for Private Flood

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echnological advances are changing the game in almost every facet of our lives, and insurance is no different. When we By Matt Junge think of technology and insurance, blockchain, self-driving cars and/or monitoring devices often take center stage, but perhaps with less fanfare, advances in flood modeling are changing our view of flood insurance. While the vast majority of residential and small commercial flood insurance is still written through the National Flood Insurance Program (NFIP), private insurance companies equipped with the latest inland flood modeling tools can start to challenge the status quo. And with approximately 85 percent of U.S. homeowners currently without flood insurance, the opportunity for the insurance industry is huge. For most of the last 40 years, flood risk 40 | INSURANCE JOURNAL | MARCH 4, 2019

in the U.S. has fallen within the scope of the Federal Emergency Management Agency (FEMA), which oversees the development of flood risk maps across the country. These maps, which cover more than 98 percent of the U.S. population, are used for disaster preparedness, zoning practices and flood insurance rates. For most consumers purchasing flood insurance, these maps are key to determining their risk and ultimately their flood insurance premiums. While significant resources have been put into developing these maps, the low risk granularity (i.e., 100year zones, 500-year zones and outside), frequent flooding outside of designated flood zones, a lack of any risk accumulation metric, and no information on NFIP loss experience, have made private insurers reluctant to rely on these maps. The difficulty in understanding flood risk is due to its high resolution, localized nature. More than hurricane or earthquake risk, flood risk can change from one house to the next, or even within a

few feet, as it depends on topography, land use, soil type, flood protection and other local features. These dependencies have traditionally made FEMA mapping resource intensive and probabilistic flood catastrophe models mostly infeasible.

Private insurance companies equipped with the latest inland flood modeling tools can start to challenge the status quo. What’s Changed?

Three things have changed: better understanding of the physics behind flooding, the availability of high-resolution data and increasingly more powerful computing resources. While many of the key concepts of flood modeling have been understood for quite some time, improved understanding of how water flows over floodplains has opened the door for more realistic flood INSURANCEJOURNAL.COM


modeling. For example, when water stays within the river banks, we can generally assume it flows in one direction, i.e. downstream, which is relatively simple to model. However, this assumption breaks down once the river banks have been overtopped and water is allowed to flow in multiple directions. Laboratory experiments and improved modeling techniques have advanced our understanding of this type of multidimensional water flow, which in turn has improved our ability to develop realistic flood maps and models. In addition, the availability of key input data at high resolution and high quality has allowed model developers to more accurately understand flood risk. For example, topography information is, in many places, available at resolutions of 10 meters or higher, thanks to advancements in satellite imaging and remote sensing capabilities. Land use information is also improving, giving us a more realistic view of how much flooding can occur and where. Simply put, better data is allowing us to better understand the small scale characteristics that change flood risk. Finally, combining multidimensional flow modeling with high resolution data requires powerful computing techniques. The availability of relatively inexpensive processing power and improvements in efficiencies have made large scale, high resolution modeling possible. Not only do we have the data, we now have the computing power to crunch the numbers on a much larger scale. We can now physically model flood waters at resolutions that were unthinkable not too long ago.

Changing the Uninsurable Risk

While these advancements are exciting on their own, the models that come with these advancements are changing our thinking on a peril that not too long ago was thought of as uninsurable. Firstly, rather than just 100- or 500-year zones, the models delineate flood risk at a much higher resolution. This is important because the potential loss per insured value for a location in a 40-year flood zone is significantly higher than a location that is just within the 100-year zone.

Secondly, many of the models are accounting for more than just river flooding. This allows insurers to rate for high rainfall induced flooding, which often occurs outside FEMA designated flood zones. Finally, the fully probabilistic models are more than just flood zones. Most include the full four box modeling approach used in the more mature earthquake and wind models, providing event sets, vulnerability components and financial models. These models provide users with annual expected losses, as well as loss frequency curves for single risk and treaty, allowing insurers to control their flood risk. Essentially, these models allow us to understand, and thus underwrite, flood risk with a confidence that wasn’t there until now. While the models are relatively new, many in the private market see them as an opportunity to provide their current cus-

Junge is the head of property solutions, U.S. and Canada, at Swiss Re.

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tomers with a better service and a way to differentiate themselves from their competitors. They are finding out that in many cases, flood insurance can be provided for significantly less and at better terms than an NFIP policy. Agents and consumers have long struggled to fully grasp the risk of flooding and its impact, as well the options at their disposal. Yet now our enhanced understanding of the risk means it can be offered with confidence via a simple homeowners endorsement for example. This new protection for consumers combined with an attractive new revenue stream for insurers at a time when many are facing profitability challenges, makes flood insurance a real win-win. The door to the private flood market is now open.

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MARCH 4, 2019 INSURANCE JOURNAL | 41


Idea Exchange: When Words Collide

Two Ways

to Deal With Claim Disputes

strong our procedures and quality control (QC) efforts are, coverage gaps can arise that result in claim denials.

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o, your customer has had a claim that has been denied, but you believe it’s covered. What to do? Well, if you have a time machine handy, the best thing would be to return By Bill Wilson to the time before policy inception and see if there was an insurable exposure that was overlooked, either the exposure itself or its insurance solution. In other words, being proactive by preventing claim disputes is the best way to resolve them. However, as Charles Dickens wrote in David Copperfield, “Accidents will occur in the best regulated families.” No matter how good we are as coverage technicians, or how

Some of these denials do not arise from errors or omissions, but rather may simply be premised on policy language that is subject to multiple interpretations. Which interpretation wins depends on how well we move from reactive to proactive by advocating on behalf of the insured. With that, lets take a cursory look at the issues involved in avoiding claim disputes and the remedies available if prevention is unsuccessful and advocacy is indicated to successfully resolve the dispute.

Avoiding Claim Disputes

Again, the key word here is prevention. In the movie War Games, a teenager hacked a new, automated government defense system thinking it was an online game, only to discover that he had initiated a thermonuclear war missile launch sequence. To make a long movie short, they were able to make an AI program called Joshua understand that such a war was unwinnable by having it play millions of games of Tic Tac Toe until it learned that the only way to win was to not play.

In the case of insurance claims, the best way to win is to not have to engage in a coverage contest. You do that via a three-phase process involving: (1) properly identifying loss exposures; (2) insuring the insurable ones and risk managing the others; then (3) QC-ing policy deliverables to make sure what forms requested are there and what adverse forms not requested need to be removed if possible. Whether you are an agent, broker, consultant, underwriter, adjuster, risk manager, attorney, regulator or other industry professional, there are at least seven considerations that enable you to avoid or prevent claim disputes: (1) having a good historical perspective of the industry; (2) understanding and embracing foundational industry premises;

(3) engaging in proper policy form drafting and approval; (4) seeking quality training and education; (5) investing time in detailed exposure analysis; (6) implementing sound and practical risk management/ insurance processes; and (7) advocating for policyholders and other beneficiaries of insurance.

Resolving Claim Disputes

Another movie, Road House, comes to mind to illustrate the importance of avoiding claim disputes. This movie, which inexplicably did not receive multiple academy awards for its brilliant screenplay and acting, featured a cooler (essentially the head bouncer) named Dalton who had to get his side stitched up at the hospital following a barroom knife fight. Given the number of scars on his torso, the doctor asked him if he ever won a fight, and his response was, “Nobody ever wins a fight.” In a manner of speaking, that’s true about claim disputes. While one side or the other may technically win the dispute, it’s always far more productive for all parties to never have a dispute. But, the


reality, as Dickens wrote, is that disputes do happen. Perhaps the one upside to a claim dispute is that, if there is a reasonable premise for overturning a claim denial, that provides an opportunity for agents, brokers, consultants and others to demonstrate their value to the policyholder. A customer that never or rarely has a claim, particularly one that buys insurance directly or on a self-service basis, doesn’t understand the importance of having an advocate for the entire process, from exposure analysis to claim resolution. The key word here is advocacy. However, when advocating on behalf of an insured, the agent, broker or consultant must move carefully, cognizant that

the failure to resolve a claim denial could lead to or bolster an E&O claim if there is a potential for legal liability for the alleged coverage gap. If that possibility is feasible, it’s advisable that the agent, broker or consultant work with the advice of E&O insurance counsel. That being said, in my experience, countless E&O claims could have been prevented by obtaining a reversal of a wrongful or arguable claim denial.

Two Foundational Premises

Our industry is one founded, possibly more than any other, on uberrimae fidei, “the most abundant faith,” or the duty of utmost good faith. This ethical obligation is codified in all states by unfair trade practices and bad faith laws. It is an obligation of all parties to the insurance transaction, including buyers and claimants, as evidenced by fraud statutes. In its purest ethical form, this duty of utmost good faith is voluntarily followed as a trade practice, as illustrated by this 1983 Travelers Insurance Co. claims manual excerpt: “[There is a] requirement to meet the duty of good faith to the insured.

The most positive way to do that is to look for coverage in our policies, and not to look for ways to deny coverage.” In other words, a foundational industry premise, supported by extensive case law, is that the purpose of insurance is to insure, and in no aspect of the insurance transaction is this more apparent than in the claims process. An insurance claims professional looks for coverage, not a way out of coverage. My experience over the last 30 years supports the viewpoint that the majority of claims professionals seek to do just that. But there are frequently legitimate differences of opinion about the intent of policy language and

how clearly it is expressed in the insurance contract. A second foundational premise is that the mission of the insurance industry and every professional in it is to assist individuals, families and organizations in minimizing their exposure to serious or catastrophic financial loss. This mission involves both claim avoidance and resolution, both prevention and advocacy. It is steeped in ethics and altruism, both aspirations of true professionals. The mission begins with preventing claim denials by properly identifying loss exposures, properly insuring them and QC-ing policy deliverables. If that is not entirely successful, the mission continues by advocating for the policyholder if a claim has been improperly denied.

Ethics Awareness Month

The celebration of March as Ethics Awareness Month is an initiative of the CPCU Society that's supported by most major industry organizations. In promot-

ing professionalism and ethical conduct, the Society has modified its CPCU Oath for adoption by others in the industry: As an insurance professional, I shall strive at all times to live by the highest standards of professional conduct; I shall strive to ascertain and understand the needs of others and place their interests above my own; I shall strive to maintain and uphold a

standard of honor and integrity that will reflect credit on my profession, my employer and myself. Next month, we will explore some very specific actions you can take, along with policies and procedures you can implement to minimize the likelihood of an uncovered claim. The remaining articles in this series will be devoted largely to successfully resolving claim denials that were not prevented. In the meantime, don’t forget the purpose of insurance is to insure! Wilson, CPCU, ARM, AIM is the founder and CEO of InsuranceCommentary. com and the author of the book “When Words Collide: Resolving Insurance Coverage and Claims Disputes.”


Idea Exchange: The Competitive Advantage

The Power of Trust and the Value of an E&O Audit

I

have been completing E&O audits for almost 25 years now. My first experience was one of the oddest because my trainer By Chris Burand had me watch him complete 1.5 audits. Halfway through the second audit, he turned it over to me and then announced he was going home. We had three more audits scheduled that week! I do not remember anything about those three audits except one point an agency owner made. He told me he’d never been sued in 40 years. He was in a litigious area. I asked how he had achieved such an amazing feat. His answer was, “I never insure anyone I do not like.” To like someone almost always means trusting that person. If I only had one E&O rule to suggest agencies follow, it is “Only do business with people you trust.” Ever since that week, starting from absolutely zero knowledge, E&O auditing has been a long journey for me. I have had some weird experiences. A couple of times the agencies were so royally messed-up

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that I felt lucky to get out physically and mentally unscathed. A few agency owners are truly warped. I learned from them that sometimes, warped people insure other warped people and somehow that results in a twisted sort of trust. Those agencies were not sued nearly as often as one would think because they insured people that were twisted, like them. Trust matters. On the other hand, many of the most tortious E&O claims I’ve seen involved amazingly ethical, honest, smart, and knowledgeable agents that happened to insure someone they did not quite trust. This happens when producers are young, when producers are desperate, when the clients are call-ins, and when the agency just feels the need to help someone and ignores that little tickle advising them to not trust the client. In these situations, the agencies really did not deserve to be sued. They really did not do anything wrong or at least, materially wrong. The plaintiff tried to blow up some measly little issue as if that was the cause of their client’s loss. Trust is a major factor in predicting E&O claims. I don’t

think you find that in the E&O applications and risk management classes. Another great lesson has been more personal. When I began, I was so young and yet CSRs, producers, and agency owners listened to my advice. Honestly, I was surprised at a certain level. But over time, I kept getting the same response from agencies, “You’re not like everyone else in the E&O world. You actually explain and teach while you do the audit. This really helps.” I’m sharing this for a couple of reasons other than to pat myself on my back. First, I had to do it this way because I was so young. It is a good method for young producers to use because being young, no one would believe me if I just told them what to do. Second, I learned how mistrusting agents were of their E&O carriers. With my approach, with the way I work, people open-up more. Their fears were real, but the basis of their fears was not justified.

Common Fears

Here are a few of their common fears that I have not found to be true, at least when I do E&O audits. INSURANCEJOURNAL.COM


Trust is a major factor in predicting E&O claims. The carrier will see the results and they will nonrenew my policy. I have never seen this except for one situation where the agency already had two sizeable E&O claims and maybe had not been adequately proactive fixing the problem prior to the audit. They were being audited because of the claims, so it was not even a voluntary audit. Otherwise, the carriers with which I’ve worked have appreciated the proactive nature of an agency asking for an audit and one carrier gives a huge discount for such audits. The procedural recommendations will be onerous. The procedures will keep me from writing accounts. This is not what happens. I can only speak for myself and the kind of procedures I recommend, but high quality procedures do not hinder anyone from writing business. In fact, my clients that most assertively adopt my recommendations find they write more business. The one exception is where a producer can only write business by cutting corners but better procedures will hinder their ability to cut corners. Customers will resent the extra steps, signoffs and disclaimers. This is really a INSURANCEJOURNAL.COM

training issue relative to training people how to work with clients and a coaching situation to help people become confident using these protections. One factor to remember is that insureds are not stupid and they understand intuitively if not cognitively that if an agency is not getting them to signoff, the responsibility goes to the agency. A sad story happened to an agent making a proposal to a large commercial client who lost to one of the much larger brokers. When the agent asked why they did not get the account (because in their opinion, their proposal was far better), the account advised that while their proposal was much better than the big broker’s proposal, the big broker had higher E&O limits. Clients know. Another common fear is that agency morale will suffer. That may be true if the agency has a bunch of people that do whatever they want. In that case, morale will likely suffer and suffer even more when a major E&O claim is incurred. In these situations, morale is going to suffer one way or the other but addressing the situation and bringing order to the agency now will mitigate the pain, increase

morale, increase agency efficiency and therefore, profitability and sales will increase. This last point is surprising. Agencies that adopt high quality procedures and cause people to follow those procedures, increase sales and productivity. Sales increase because clients buy more insurance (at least the way I do E&O audits). Staff becomes more efficient with quality procedures and this also reduces future E&O claims. Think about it this way: if the staff can do 10 percent more work, then the agency can grow without hiring more people. The fewer people, the fewer headaches and with fewer people, especially new people, the lower the probability of a mistake. I encourage every agency owner to have an E&O audit completed. Depending on your carrier, they may give you a discount or even help pay for the audit. The positive results outweigh any negatives, if any negatives even exist. Burand is the founder and owner of Burand & Associates LLC based in Pueblo, Colo. Phone: 719-4853868. E-mail: chris@burand-associates.com. MARCH 4, 2019 INSURANCE JOURNAL | 45


Idea Exchange: Business Interruption

Ins and Outs

Of Contingent Business Interruption

T

he steady extension of supply chains over recent decades has exposed businesses to various risks resulting from By Jeff Ellington temporary interruption. These types of interruptions to a supply chain can result in significant losses, even over the short term. While it’s natural to focus on large-scale climatic or even geopolitical events as causative factors, the truth is that even local factors can trigger business interruption. For these reasons, insurers in the alternative risk marketplace have developed contingent business interruption products as an extension of their clients’ business interruption plans. These types of coverages are designed to replace loss of 46 | INSURANCE JOURNAL | MARCH 4, 2019

income and reimburse additional expenses suffered during an interruption to the insured’s supply chain. Furthermore, coverage is not merely limited to the supply chain, but can also be applied to any interruption initiated by an event away from the insured’s premises that prevents the insured’s business from operating.

Life Is Random, Coverage Isn’t

It’s easy to envision how an earthquake can upset the supply chain of a global corporation. What are less obvious but vastly more common are the myriad causes of interruption that expose medium-sized businesses to losses every day. For example, a fire or explosion at a key supplier or distributor’s facility could cause a disruption possibly lasting weeks or months. Importantly, such exposure becomes a serious threat to normal busi-

ness operations almost immediately.

Contingent business interruption coverage has its own contingencies. A shipment of a critical part that gets delayed or detained in customs overseas can cause a downstream delay or cessation of operations. This is a common occurrence with parts manufactured overseas, for example in China. Losses can be triggered by other unforeseen events such as government shutdowns or even the bankruptcy of a trusted supplier. With the focus on critical infrastructure these days, it’s important to note that roadway or bridge closures for major repairs can prevent customers from reaching businesses, possibly for a few weeks or INSURANCEJOURNAL.COM


even longer. Even such inconveniences as running out of critical supplies normally provided by a key supplier can result in a business having to switch to a different supplier, thus causing an unexpected loss of income from delays and increased costs.

What’s Covered, What Isn’t

Contingent business interruption coverage typically involves three basic categories of losses. The most obvious of these is loss of business income that would have been earned had the triggering incident not occurred. In addition, insureds must also consider any extra expenses incurred during the business interruption, including those due to replacement. A third category is loss mitigation expenses, or expenses incurred to avoid any further loss. Contingent business interruption coverage has its own contingencies. For example, the policy language could require that

the suppliers or other dependent entities be listed on the policy declarations page, with standard exclusions applied. In addition, claims are triggered by elapsed time, with a usual retention or deductible set at 48 hours. Under such a scenario, the business must have a disruption of normal business operations for at least 48 hours before coverage would apply.

Losses can be triggered by other unforeseen events such as government shutdowns or even the bankruptcy of a trusted supplier. Claims can be limited to specific locations or be extended to all locations of dependent entities, including unnamed ones. In other words, the coverage could specify a single warehouse or all warehouses, depending on the needs of the

insured. In any of these scenarios, standard conditions and exclusions apply. As one example, the contingent business interruption policy could specify a 25 percent monthly limitation, which means that no more than 25 percent of the coverage limit could be paid out in a single month. Thinking through the various scenarios that could result in a significant business interruption should be accomplished systematically and thoroughly. Determining exactly how such contingencies can affect a business and how coverages should be designed will have a significant effect on how the business recovers from any qualifying event.

Ellington is vice president at Atlas Insurance Management. His professional career spans over 30 years in the commercial insurance industry, including roles in sales, marketing, underwriting and management. Email: JEllington@atlascaptives.com.

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MARCH 4, 2019 INSURANCE JOURNAL | 47


My New Markets Apartments

Market Detail: Pacific Excess

Insurance Marketing (www.pacificexcess.com) is a wholesaler/general agent with access to many standard, surplus lines and workers' compensation markets. It offers higher commissions, fast quotes, and no premium volume requirements. Markets available for unique risks. Available limits: As needed Carrier: Various, admitted and non-admitted available States: Ariz., Calif., Colo., Conn., Fla., Ga., Iowa, Idaho, Ill., Ks., Ky., La., Maine, Mich., Mo., N.C., N.D., Neb., N.H., N.M., Nev., N.Y., Ohio, Okla, Ore., S.C., S.D., Tenn., Texas, Utah, Va., Wash., and Wisc. Contact: Juli Queen at 800222-5582 or e-mail: jqueen@ pacificexcess.com

Aircraft Products Liability

Market Detail: Aviation Markets Inc. (www.aviation-markets.com) is a wholesale broker offering aviation insurance services to licensed agents and brokers throughout the U.S., holding licenses in every state except Hawaii. Access to every domestic aviation market is available as well as the London Market. Products and services include: airports; airport property and aviation related risks; airport services; aviation fueling operations; aviation workers’ compensation; commercial and corporate operations; fixed base operators; flight schools; flying clubs; general liability/products/completed operations/hangarkeepers liability; helicopters; experimental aircraft; excess liability; industrial aid aircraft; manufacturer’s aviation product liability; non-ownership liability – personal and corporate; repairs and service operations; private airstrips; sales demonstration aircraft; and UAV’s. Available limits: As needed Carrier: Unable to disclose States: All states 48 | INSURANCE JOURNAL | MARCH 4, 2019

Contact: Customer service at 800-688-4901

High Value Homes Dwellings - Rentals

Market Detail: Lionheart Insurance Services’ (lionheartins. com) homeowners (HO 3) and condominium unit owners (HO 6) coverages are available in the admitted and surplus lines markets. Coverage is available for homes from $100,000 to $10 million (total section I). Eligible Risks include, but are not limited to: animals (subject to limitations; course of construction; LLCs (family) and family trusts; older homes with limited updates; post and pier foundation; prior claims; protection classes seven to 10 and brush or forest areas; trampolines, unfenced swimming pools and diving boards (subject to exclusion); and modular/manufactured homes if set on permanent concrete foundation. Available limits: As needed Carrier: Unable to disclose, admitted and non-admitted States: All states Contact: Sandra Stampfl at 916-6527880 or e-mail: sandra@lionheartins.net

Community Associations

Market Detail: Preferred Property Programs (www.ppp-quotes.com) offers boiler & machinery; environmental liability; equipment breakdown; mechanical breakdown; umbrella; and excess liability. Available limits: As needed Carrier: Unable to disclose, admitted and non-admitted States: All states Contact: Ken Hager at 888-548-2465 or e-mail: khager@ppp-quotes.com

Stand Alone Earthquake

Market Detail: GeoVera Holdings

Inc. (www.geovera.com) is a provider of specialty residential property insurance products, focused on

catastrophe exposed property in the homeowners and residential earthquake markets, operating on both an admitted and surplus lines basis. Available limits: As needed Carrier: Unable to disclose, admitted States: Calif., Ore., and Wash. Contact: Customer service at 707-8633686

Environmental - Hazardous Waste Hauling

Market Detail: CTC Transportation Insurance Services LLC (www.coast-ins. com) covers hazardous materials/non-hazardous bulk ahauling with at least 50 percent of commodities hauled. Must have at least 10 power units to qualify for this program; minimum of 25 power units for oilfield related bulk haulers. Available limits: As needed Carrier: Chubb/ACE Westchester States: All states except Alaska, Dela., Hawaii, Ky., Mass., Mich., Miss., and N.Y. Contact: Sales & Marketing Representative at 760-487-7399 or e-mail: info@coast-ins. com

Garage Risk

Market Detail: RIC Insurance General Agency (www.ric-ins.com) writes hard to place garage risk, including a used car dealership. Target classes include full-service car washes, windshield repair on autos, brake repair on autos, heavy truck sales, auto dealers, auto storage, auto auction, auto body painting, and more. Available limits: Minimum $300,000, maximum $1 million Carrier: Unable to disclose, non-admitted States: Ariz., Calif., Nev., Ore., and Wash. Contact: Tom Clansen at 714-505-8216 or e-mail: tomc@ric-ins.com.

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Idea Exchange: Ask the Insurance Recruiter How and Where to Start When an Agency Leader Retires 3. At heart, is this person rooted in sales, service or pure management?

Q:

Q&A

Our executive team wants to start the recruiting process for a chief operating officer. The current leader is within two years of retirement. We prefer to be ahead of the game and have the current COO groom his successor. How do we develop a search? When should we begin recruiting candidates? – Melissa in Virginia.

A:

Recruiting to fill senior positions due to retirement is a little bit like deciding to start a family. You think you have a lot of lead time, but surprises always pop up along the way. That happened to me. I bought a great, sporty new car six months before I learned I was pregnant with twins. You can imagine how well two car seats fit in the backseat. Had I known how quickly a minivan would be in my future, I never would have bought that car!

An Outline for Planning a Leadership Search Timing (12-24 months before date of hire)

1. Dialogue with the pre retiree. a. Do they want to slow down or shred current responsibilities? b. Will they quit cold turkey or want a post-retirement consulting contract? c. Do they want to participate in the search process? d. Is their retirement date fixed or could it change? 2. How many hats do they INSURANCEJOURNAL.COM

wear? Create an exhaustive list of duties and responsibilities. Is internal promotion a viable option? It’s a waste of time to build a search only to eventually promote from within.

Profile (9-12 months before date of hire)

Close your eyes and imagine the perfect resume. 1. Do you require insurance industry experience? 2. How many job changes are too many?

While the answers seem obvious, the trap for many companies is simplicity. You will be tempted to negotiate away the profile when you struggle to source candidates. This stage keeps your commitment firm.

Experience (6-9 months before date of hire)

Do you want an equal to the current leader or someone with raw potential? 1. A mirror image: A younger baby boomer who matches 99 percent of all job responsibilities. 2. An upstart: The gen X or older millennial with executive maturity who fits 50 percent of the role. Where they lack skills, you are willing to train. Beyond generational qualities, this is your opportunity to recruit for the future. Does the search address issues like diversity and pay equity?

Compensation (the last piece to launch the search)

Salary is one piece of a bigger puzzle. What substance will you offer? 1. Relocation: How much, applicability and payment method? Payback protection clause? 2. Signing Bonus: Yes or no? For what purpose? To what max? 3. Equity, Ownership Stake: Immediately or after X

By Mary Newgard years of tenure? 4. Performance Variables: Percent of the first year total compensation package? Long term, weighted on individual performance or company profitability?

Food for Thought: Executive Recruiting Don’t start by saying, “We

Need to Find Candidates.” That’s a reactionary mindset. That mentality works when you’re scrambling to backfill a $60,000 account manager job. It lets applicant quality and availability determine your hiring profile. Do say. “This Is A Huge Opportunity for Our Company.” Your firm’s brand, story, mission, history, vision and culture are impactful in a search. Be strategic. Plan and execute. Figure out how to put your best attributes on display. Your firm’s DNA will attract passive job seekers.

Newgard is partner and senior search consultant for Capstone Search Group, a national recruiting firm dedicated to the insurance industry. For questions and comments, email: asktherecruiter@ csgrecruiting.com.

MARCH 4, 2019 INSURANCE JOURNAL | 49


2019

Hospitality Risks Directory

S

earching for the right market for a hard-to-place hospitality risk? Look no further than Insurance Journal’s Hospitality Risks Directory — a comprehensive listing of excess and surplus lines intermediaries and carriers offering hospitality risks coverage nationwide. The information listed in this directory has been compiled to serve as a resource guide for independent agents and brokers looking for superior markets for everything from nightclubs to special events, hotels to motels, spas, resorts and restaurants too. All markets profiled in this directory have been updated with the most current information available provided directly by the intermediaries and carriers writing the coverage. IJ has made every attempt to ensure the accuracy of all information listed in this directory. To submit a listing for future Hospitality Risks directories, e-mail Kristine Honey at: khoney@insurancejournal.com. We hope you find IJ’s 2019 Hospitality Risks Directory to be a useful tool when searching for quality markets. To comment on this directory, or any other Insurance Journal resource, please e-mail: editorial@insurancejournal.com.

Banquet Halls Market Advanced E&S Group All Risks, Ltd. AmWINS Group, Inc. AmWINS Program Udr, ResortGuard Ins. Program Arlington/Roe & Co. Ashley General Agency Aspera Insurance Services, Inc. Bass Underwriters Berkley Select Brecht & Associates Burns & Wilcox CITA Insurance Services

States Available View website for state info Has Pen, All States All States All States IL IN KY MI MN MO OH TN WI TX CA CO FL OR TX WA AL CA CO FL GA LA MS NJ NV NY OR PA SC TX WA All States TX All States All States

Cochrane & Company Crusader Insurance Company Erickson-Larsen, Inc.

ID MT OR WA CA MN MT ND NE SD WI WY

N50 | INSURANCE JOURNAL MARCH 4, 2019

Banquet Halls Market Executive Insurance Professionals, PLLC First Choice Ins. Intermediaries (Liq. Liab only) Founders Insurance Company G.J. Sullivan Company Gorst & Compass Insurance Gray-Stone & Company, Inc. Heritage Specialty Insurance Hospitality Insurance Group Innovative Coverage Concepts Izzo Insurance Services, A div. of Hull & Co. J.M. Wilson James River Insurance Company Jimcor Agencies Joseph Krar & Associates Lionheart Insurance Services, Inc. M.J. Hall & Company, Inc. M.J. Kelly Company MacNeill Group McClelland & Hine, A div of Worldwide Facilities Morstan General Agency, a div of Hull & Co., LLC Nautilus Insurance Co. & Great Divide Ins. Co. NeitClem Wholesale Insurance Brokerage, Inc. New England Excess Exchange, Ltd. NIF Group Number One Insurance Agency, Inc. Pacific Excess Insurance Marketing Patriot National Underwriters, Inc. Professional Liability Ins. Svcs, Inc. - Underwriting Facilities Quirk & Company RIC Ins. General Agency, div of Worldwide Facilities RISCO Insurance Brokerage, Inc. RMIS Roush Insurance Services, Inc. RT Specialty SCU - Middletown Seguros Underwriters, LLC Southern Insurance Underwriters, Inc. CMGA Specialty Insurance SUITELIFE by Venture Insurance Programs Tejas American General Agency Topa Insurance Company Unifax Insurance Systems, Inc. W.A. Schickedanz Agency, Inc. Walter General Agency (WGA) Western Security Surplus Insurance Brokers LLC Western Surplus Lines Agency, Inc. Wilson Smith Group

States Available CA GA OK TX Most States AL CO CT FL IA IL IN KS LA MD MI MN MT NC NH NV NY OH OR TN VA WI CA NV OR WA CA Most States AR OK TX CT MA NC NH PA RI VT All States except VT All States Most States All States All States except AK HI IA ID KS MT ND NM CT MA ME NH RI AZ CA CO HI ID NM NV OK TX UT WA WY AK AZ CA HI NV All States FL NC SC TX VA TX All States All States AZ CA NV CT MA MD ME NH NJ NY OH PA RI VT All States MA Most States AR KS LA MS OK TX All States LA NM OK OR TX WA CA CT MA ME NH NY RI VT All States IL IN OH All States CT MA ME NH NJ RI PA FL GA MO TN TX AL FL GA SC TN AZ CA CT DE FL GA IL MA MD MI MN MO NC NJ NY OH PA RI SC TN TX All States TX CA CA AR IL MO AR IA IL IN KS KY MO OK TN

CA FL GA LA MO NC NJ NY SC TX VA LA ND NM OK TX

AZ LA MD MI MS NJ NV NY OK PA TX

www.insurancejournal.com


2019 Hospitality Risks Directory Bars/Night Clubs

Bars/Night Clubs

Bars / Night Clubs coverage category sponsored by: M.J. Hall & Company, Inc. - for more info, check out our ad on pages 11 & 12 (West).

Market Abram Interstate Insurance Services, Inc. Advanced E&S Group All Risks, Ltd. AmWINS Group, Inc. AmWINS Program Udr, ResortGuard Ins. Program Anderson & Murison, Inc. Appalachian Underwriters Arlington/Roe & Co. Ashley General Agency Aspera Insurance Services, Inc. Bass Underwriters Braishfield Associates, Inc. Brecht & Associates Burns & Wilcox CID Insurance Programs, Inc. Combined Group Crusader Insurance Company Empire Underwriters Entertainment Risk First Choice Ins. Intermediaries (Liq. Liab only) Founders Insurance Company Gorst & Compass Insurance Heritage Specialty Insurance Hospitality Insurance Group IBI - Insurance Brokers Incorporated Indemnity Excess & Surplus Agency Innovative Coverage Concepts International Excess Companies IPC Izzo Insurance Services, A div. of Hull & Co. J.M. Wilson Jacobs & Associates James River Insurance Company Jimcor Agencies (and Taverns) Joseph Krar & Associates Legacy Employer Concepts, LLC Lionheart Insurance Services, Inc. M.J. Hall & Company, Inc.

www.insurancejournal.com

States Available CA View website for state info Has Pen, All States All States All States All States All States IL IN KY MI MN MO OH TN WI TX CA CO FL OR TX WA AL CA CO FL GA LA MS NJ NV NY OR PA SC TX WA All States TX All States AZ CA CO ID NE NM NV OR TN TX UT WA Most States CA All except monopolistic AZ CA CO FL GA IL LA MA MD MI NJ NV NY TN TX UT VA Most States AL CO CT FL IA IL IN KS LA MD MI MN MT NC NH NV NY OH OR TN VA WI CA AR OK TX CT MA NC NH PA RI VT IL IN MI AZ CA CO ID MT NV OR TX WA All States except VT All States AZ CA ID NV OR WA All States Most States OH All States All States except AK HI IA ID KS MT ND NM CT MA ME NH RI All States except AK HI NC AZ CA CO HI ID NM NV OK TX UT WA WY AK AZ CA HI NV

Market M.J. Kelly Company MacNeill Group Market Finders Insurance Corp. MAXIMUM McClelland & Hine, A div of Worldwide Facilities McLeckie Insurance Group MexiPass International Insurance Services, LLC Midlands Management Corp. Morstan General Agency, a div of Hull & Co., LLC NeitClem Wholesale Insurance Brokerage, Inc. New England Excess Exchange, Ltd. Next Wave Insurance Services, LLC NIF Group Number One Insurance Agency, Inc. Pacific Excess Insurance Marketing Patriot National Underwriters, Inc. Philadelphia Insurance Companies (E&S paper) Professional Liability Ins. Svcs, Inc. - Underwriting Facilities Quaker Special Risk Quirk & Company Regency Insurance Brokerage Services RIC Ins. General Agency, div. of Worldwide Facilities RISCO Insurance Brokerage, Inc. Risk Placement Services, Inc. RMIS RMS Hospitality Group Roush Insurance Services, Inc. RT Specialty SCU - Middletown Seguros Underwriters, LLC Southern Insurance Underwriters, Inc. CMGA Southwest Risk, LP Specialty Insurance (and Taverns) Tejas American General Agency Topa Insurance Company UFG Insurance/Specialty Division Unifax Insurance Systems, Inc. USASIA Insurance Services USG Insurance Services, Inc. W.A. Schickedanz Agency, Inc. Walter General Agency (WGA) Western Security Surplus Insurance Brokers LLC Western Special Risks, Inc, a JenCap Holdings Co. Western Surplus Lines Agency, Inc. Worldwide Facilities, LLC Wright Insurance Services, LLC

States Available All States FL NC SC TX VA All States All States TX AZ CO NC OK TN TX All States Most States All States AZ CA NV CT MA MD ME NH NJ NY OH PA RI VT All States All States MA Most States AR KS LA MS OK TX All States except LA All States Most States LA NM OK OR TX WA State availability varies - call us!

CA CT MA ME NH NY RI VT All States All States All except AK VT WV IL IN OH All States CT MA ME NH NJ RI PA FL GA MO TN TX AL FL GA SC TN All except AK HI NJ NY AZ CA CT DE FL GA IL MA MD MI MN MO NC NJ NY OH PA RI SC TN TX TX CA AZ CA CO ID NM NV OR UT WA CA CA NV All States AR IL MO AR IA IL IN KS KY MO OK TN

CA FL GA LA MO NC NJ NY SC TX VA AZ NV LA ND NM OK TX All States All States

MARCH 4, 2019 INSURANCE JOURNAL | N51


2019 Hospitality Risks Directory Breweries/Micro

Bed & Breakfasts Market All Risks, Ltd. AmWINS Group, Inc. AmWINS Program Udr, ResortGuard Ins. Program Arlington/Roe & Co. Ashley General Agency Aspera Insurance Services, Inc. Bass Underwriters Berkley Select Burns & Wilcox CITA Insurance Services Cochrane & Company Combined Group Crusader Insurance Company Empire Underwriters Erickson-Larsen, Inc. Executive Insurance Professionals, PLLC G.J. Sullivan Company Gorst & Compass Insurance Gray-Stone & Company, Inc. IPC J.M. Wilson James River Insurance Company Joseph Krar & Associates M.J. Hall & Company, Inc. McClelland & Hine, A div of Worldwide Facilities McLeckie Insurance Group MexiPass International Insurance Services, LLC Midlands Management Corp. Morstan General Agency, a div of Hull & Co., LLC NeitClem Wholesale Insurance Brokerage, Inc. NIF Group Patriot National Underwriters, Inc. Philadelphia Insurance Companies (E&S paper) Professional Liability Ins. Svcs, Inc. - Underwriting Facilities Quaker Special Risk Quirk & Company RIC Ins. General Agency, div of Worldwide Facilities RISCO Insurance Brokerage, Inc. Risk Placement Services, Inc. Tejas American General Agency Topa Insurance Company UFG Insurance/Specialty Division Unifax Insurance Systems, Inc. W.A. Schickedanz Agency, Inc. Walter General Agency (WGA) Western Special Risks, Inc, a JenCap Holdings Co. Western Surplus Lines Agency, Inc. Wilson Smith Group

N52 | INSURANCE JOURNAL MARCH 4, 2019

States Available Has Pen, All States All States All States IL IN KY MI MN MO OH TN WI TX CA CO FL OR TX WA AL CA CO FL GA LA MS NJ NV NY OR PA SC TX WA All States All States All States ID MT OR WA Most States CA All except monopolistic MN MT ND NE SD WI WY CA GA OK TX CA NV OR WA CA Most States AZ CA ID NV OR WA Most States All States CT MA ME NH RI AK AZ CA HI NV TX AZ CO NC OK TN TX All States Most States All States AZ CA NV All States AR KS LA MS OK TX All States except LA All States Most States LA NM OK OR TX WA CA CT MA ME NH NY RI VT All States TX CA AZ CA CO ID NM NV OR UT WA CA AR IL MO AR IA IL IN KS KY MO OK TN

AZ NV LA ND NM OK TX

AZ LA MD MI MS NJ NV NY OK PA TX

Market Abram Interstate Insurance Services, Inc. Advanced E&S Group All Risks, Ltd. AmWINS Group, Inc. Arlington/Roe & Co. Aspera Insurance Services, Inc. Bass Underwriters Braishfield Associates, Inc. CID Insurance Programs, Inc. Cochrane & Company Combined Group Crusader Insurance Company Delta General Agency Corp. Elite Underwriters Entertainment Risk Erickson-Larsen, Inc. Founders Insurance Company G.J. Sullivan Company Gorst & Compass Insurance Hospitality Insurance Group Indemnity Excess & Surplus Agency International Excess Companies IPC Izzo Insurance Services, A div. of Hull & Co. J.M. Wilson Jacobs & Associates James River Insurance Company Jimcor Agencies Legacy Employer Concepts, LLC M.J. Hall & Company, Inc. Market Finders Insurance Corp. McLeckie Insurance Group Midlands Management Corp. Morstan General Agency, a div of Hull & Co., LLC NeitClem Wholesale Insurance Brokerage, Inc. New England Excess Exchange, Ltd. NIF Group Number One Insurance Agency, Inc. Philadelphia Insurance Companies (E&S paper) Quaker Special Risk Quirk & Company RISCO Insurance Brokerage, Inc.

States Available CA View website for state info Has Pen, All States All States IL IN KY MI MN MO OH TN WI CA CO FL OR TX WA AL CA CO FL GA LA MS NJ NV NY OR PA SC TX WA All States AZ CA CO ID NE NM NV OR TN TX UT WA ID MT OR WA Most States CA TX CA FL GA NY AZ CA CO FL GA IL LA MA MD MI NJ NV NY TN TX UT VA MN MT ND NE SD WI WY AL CO CT FL IA IL IN KS LA MD MI MN MT NC NH NV NY OH OR TN VA WI CA NV OR WA CA CT MA NC NH PA RI VT AZ CA CO ID MT NV OR TX WA All States AZ CA ID NV OR WA All States Most States OH All States All States except AK HI IA ID KS MT ND NM All States except AK HI NC AK AZ CA HI NV All States AZ CO NC OK TN TX Most States All States AZ CA NV CT MA MD ME NH NJ NY OH PA RI VT All States MA All States except LA Most States LA NM OK OR TX WA CT MA ME NH NY RI VT

www.insurancejournal.com


2019 Hospitality Risks Directory Caterers

Breweries/Micro Market Roush Insurance Services, Inc. RT Specialty SCU - Middletown Specialty Insurance Tejas American General Agency The McGowan Companies Topa Insurance Company UCA General Insurance Services, Inc. Unifax Insurance Systems, Inc. W.A. Schickedanz Agency, Inc. Walter General Agency (WGA) Worldwide Facilities, LLC

States Available IL IN OH All States CT MA ME NH NJ RI PA AZ CA CT DE FL GA IL MA MD MI MN MO NC NJ NY OH PA RI SC TN TX TX All States CA AZ CA ID IL NV OR UT WA WI CA AR IL MO AR IA IL IN KS KY MO OK TN

All States

Casinos Market All Risks, Ltd. Alliant Insurance Services American Specialty Ins. & Risk Services, Inc. AmWINS Group, Inc. Anderson & Murison, Inc. Bass Underwriters Distinguished Specialty Empire Underwriters Entertainment Risk Izzo Insurance Services, A div. of Hull & Co. James River Insurance Company Legacy Employer Concepts, LLC Lionheart Insurance Services, Inc. M.J. Hall & Company, Inc. MAXIMUM Morstan General Agency, a div of Hull & Co., LLC NIF Group Walter General Agency (WGA) Worldwide Facilities, LLC

www.insurancejournal.com

States Available Has Pen, All States All States All States All States All States AL CA CO FL GA LA MS NJ NV NY OR PA SC TX WA All States All except monopolistic AZ CA CO FL GA IL LA MA MD MI NJ NV NY TN TX UT VA All States All States All States except AK HI NC AZ CA CO HI ID NM NV OK TX UT WA WY AK AZ CA HI NV All States All States All States

Market Abram Interstate Insurance Services, Inc. All Risks, Ltd. AmWINS Group, Inc. Arlington/Roe & Co. Ashley General Agency Aspera Insurance Services, Inc. Bass Underwriters Berkley Select Braishfield Associates, Inc. Brecht & Associates CID Insurance Programs, Inc. Cochrane & Company Delta General Agency Corp. Erickson-Larsen, Inc. Executive Insurance Professionals, PLLC First Choice Insurance Intermediaries, Inc. Founders Insurance Company Gorst & Compass Insurance Gray-Stone & Company, Inc. Hospitality Insurance Group Indemnity Excess & Surplus Agency Innovative Coverage Concepts International Excess Companies Jacobs & Associates James River Insurance Company Joseph Krar & Associates Lionheart Insurance Services, Inc. (Large Caterers) M.J. Hall & Company, Inc. M.J. Kelly Company MacNeill Group Market Finders Insurance Corp. McClelland & Hine, A div of Worldwide Facilities McLeckie Insurance Group Midlands Management Corp. Morstan General Agency, a div of Hull & Co., LLC Nautilus Insurance Co. & Great Divide Ins. Co. NeitClem Wholesale Insurance Brokerage, Inc. New England Excess Exchange, Ltd. NIF Group Number One Insurance Agency, Inc.

States Available CA Has Pen, All States All States IL IN KY MI MN MO OH TN WI TX CA CO FL OR TX WA AL CA CO FL GA LA MS NJ NV NY OR PA SC TX WA All States All States TX AZ CA CO ID NE NM NV OR TN TX UT WA ID MT OR WA TX MN MT ND NE SD WI WY CA GA OK TX Most States AL CO CT FL IA IL IN KS LA MD MI MN MT NC NH NV NY OH OR TN VA WI CA Most States CT MA NC NH PA RI VT AZ CA CO ID MT NV OR TX WA All States except VT All States OH All States CT MA ME NH RI AZ CA CO HI ID NM NV OK TX UT WA WY AK AZ CA HI NV All States FL NC SC TX VA All States TX AZ CO NC OK TN TX Most States All States All States AZ CA NV CT MA MD ME NH NJ NY OH PA RI VT All States MA

AR IA IL IN KS KY MO OK TN

All States

MARCH 4, 2019 INSURANCE JOURNAL | N53


2019 Hospitality Risks Directory Caterers Market Pacific Excess Insurance Marketing Patriot National Underwriters, Inc. Professional Liability Ins. Svcs, Inc. - Underwriting Facilities ProHost USA Quirk & Company Regency Insurance Brokerage Services RIC Ins. General Agency, div of Worldwide Facilities RISCO Insurance Brokerage, Inc. RMIS Roush Insurance Services, Inc. SCU - Middletown Specialty Insurance (and Delis) Tejas American General Agency The McGowan Companies Topa Insurance Company USG Insurance Services, Inc. Walter General Agency (WGA) Western Security Surplus Insurance Brokers LLC Western Special Risks, Inc, a JenCap Holdings Co. Western Surplus Lines Agency, Inc. Wilson Smith Group

Wright Insurance Services, LLC

Dinner Theaters States Available Most States AR KS LA MS OK TX All States All States except AK LA NM OK OR TX WA State availability varies - call us!

CA CT MA ME NH NY RI VT All States IL IN OH CT MA ME NH NJ RI PA AZ CA CT DE FL GA IL MA MD MI MN MO NC NJ NY OH PA RI SC TN TX TX All States CA All States AR IA IL IN KS KY MO OK TN

CA FL GA LA MO NC NJ NY SC TX VA AZ NV LA ND NM OK TX

AZ LA MD MI MS NJ NV NY OK PA TX

All States

N54 | INSURANCE JOURNAL MARCH 4, 2019

Wright Insurance Services, LLC

States Available TX CA FL GA NY All except monopolistic AZ CA CO FL GA IL LA MA MD MI NJ NV NY TN TX UT VA CA GA OK TX AL CO CT FL IA IL IN KS LA MD MI MN MT NC NH NV NY OH OR TN VA WI All States AZ CA CO HI ID NM NV OK TX UT WA WY AK AZ CA HI NV TX All States All States AZ CA NV All States MA Most States LA NM OK OR TX WA FL GA MO TN TX CA AR IA IL IN KS KY MO OK TN AZ LA MD MI MS NJ NV NY OK PA TX

All States

Gentleman’s Clubs

Dinner Theaters Market AmWINS Group, Inc. AmWINS Program Udr, ResortGuard Ins. Program All Risks, Ltd. Appalachian Underwriters Arlington/Roe & Co. Aspera Insurance Services, Inc. Bass Underwriters Berkley Select Brecht & Associates Crusader Insurance Company

Market Delta General Agency Corp. Elite Underwriters Empire Underwriters Entertainment Risk Executive Insurance Professionals, PLLC Founders Insurance Company James River Insurance Company Lionheart Insurance Services, Inc. M.J. Hall & Company, Inc. McClelland & Hine, A div of Worldwide Facilities Morstan General Agency, a div of Hull & Co., LLC Nautilus Insurance Co. & Great Divide Ins. Co. NeitClem Wholesale Insurance Brokerage, Inc. NIF Group Number One Insurance Agency, Inc. Pacific Excess Insurance Marketing Quirk & Company Seguros Underwriters, LLC Unifax Insurance Systems, Inc. Walter General Agency (WGA) Wilson Smith Group (includes Comedy Clubs)

States Available All States All States Has Pen, All States All States IL IN KY MI MN MO OH TN WI CA CO FL OR TX WA AL CA CO FL GA LA MS NJ NV NY OR PA SC TX WA All States TX CA

Market Abram Interstate Insurance Services, Inc. All Risks, Ltd. AmWINS Group, Inc. Anderson & Murison, Inc. Appalachian Underwriters Arlington/Roe & Co. Aspera Insurance Services, Inc. Bass Underwriters Crusader Insurance Company

States Available CA Has Pen, All States All States All States All States IL IN KY MI MN MO OH TN WI CA CO FL OR TX WA AL CA CO FL GA LA MS NJ NV NY OR PA SC TX WA CA

www.insurancejournal.com


2019 Hospitality Risks Directory Gentlemen’s Clubs Market Entertainment Risk First Choice Ins. Intermediaries (Liq. Liab only) Founders Insurance Company G.J. Sullivan Company Gorst & Compass Insurance Heritage Specialty Insurance Hospitality Insurance Group Innovative Coverage Concepts Jacobs & Associates James River Insurance Company Jimcor Agencies Legacy Employer Concepts, LLC Lionheart Insurance Services, Inc. M.J. Hall & Company, Inc. Market Finders Insurance Corp. MAXIMUM McClelland & Hine, A div of Worldwide Facilities Midlands Management Corp. Morstan General Agency, a div of Hull & Co., LLC NeitClem Wholesale Insurance Brokerage, Inc. Next Wave Insurance Services, LLC NIF Group Number One Insurance Agency, Inc. Quaker Special Risk Quirk & Company Regency Insurance Brokerage Services Risk Placement Services, Inc. RMS Hospitality Group RT Specialty Seguros Underwriters, LLC Southern Insurance Underwriters, Inc. CMGA Southwest Risk, LP Tejas American General Agency UFG Insurance/Specialty Division Unifax Insurance Systems, Inc. USG Insurance Services, Inc. Walter General Agency (WGA) Worldwide Facilities, LLC

www.insurancejournal.com

Hotels/Motels States Available AZ CA CO FL GA IL LA MA MD MI NJ NV NY TN TX UT VA Most States AL CO CT FL IA IL IN KS LA MD MI MN MT NC NH NV NY OH OR TN VA WI CA NV OR WA CA AR OK TX CT MA NC NH PA RI VT All States except VT OH All States All States except AK HI IA ID KS MT ND NM All States except AK HI NC AZ CA CO HI ID NM NV OK TX UT WA WY AK AZ CA HI NV All States All States TX Most States All States AZ CA NV All States All States MA Most States LA NM OK OR TX WA State availability varies - call us!

All States All except AK VT WV All States FL GA MO TN TX AL FL GA SC TN All except AK HI NJ NY TX AZ CA CO ID NM NV OR UT WA CA All States AR IA IL IN KS KY MO OK TN

All States

Market Abram Interstate Insurance Services, Inc. Advanced E&S Group All Risks, Ltd. Alliant Insurance Services AmWINS Group, Inc. AmWINS Program Udr, ResortGuard Ins. Program Anderson & Murison, Inc. Appalachian Underwriters Arlington/Roe & Co. Ashley General Agency Aspera Insurance Services, Inc. Bass Underwriters Berkley Select Braishfield Associates, Inc. Brecht & Associates Burns & Wilcox CITA Insurance Services CID Insurance Programs, Inc. Cochrane & Company Combined Group Crusader Insurance Company Delta General Agency Corp. Distinguished Specialty Elite Underwriters Empire Underwriters Executive Insurance Professionals, PLLC G.J. Sullivan Company Gorst & Compass Insurance Gray-Stone & Company, Inc. HabPro Hotels & Resorts Insurance Program – CITA Ins. Services (3, 4 & 5 Star Rated based on Amenities) Indemnity Excess & Surplus Agency International Excess Companies IPC Izzo Insurance Services, A div. of Hull & Co. J.M. Wilson Jacobs & Associates James River Insurance Company Jimcor Agencies KZ Insurance Brokerage, LLC Legacy Employer Concepts, LLC M.J. Hall & Company, Inc. M.J. Kelly Company

States Available CA View website for state info Has Pen, All States All States All States All States All States All States IL IN KY MI MN MO OH TN WI TX CA CO FL OR TX WA AL CA CO FL GA LA MS NJ NV NY OR PA SC TX WA All States All States TX All States All States AZ CA CO ID NE NM NV OR TN TX UT WA ID MT OR WA Most States CA TX All States CA FL GA NY All except monopolistic CA GA OK TX CA NV OR WA CA Most States Most States All States AZ CA CO ID MT NV OR TX WA All States AZ CA ID NV OR WA All States Most States OH All States All States except AK HI IA ID KS MT ND NM AZ CA CO LA NV TN All States except AK HI NC AK AZ CA HI NV All States

MARCH 4, 2019 INSURANCE JOURNAL | N55


2019 Hospitality Risks Directory Hotels/Motels Market MacNeill Group Market Finders Insurance Corp. MAXIMUM McClelland & Hine, A div of Worldwide Facilities McLeckie Insurance Group MexiPass International Insurance Services, LLC Midlands Management Corp. Morstan General Agency, a div of Hull & Co., LLC Nautilus Insurance Co. & Great Divide Ins. Co. NeitClem Wholesale Insurance Brokerage, Inc. Next Wave Insurance Services, LLC NIF Group Pacific Excess Insurance Marketing Patriot National Underwriters, Inc. Philadelphia Insurance Companies (E&S paper) Professional Liability Ins. Svcs, Inc. - Underwriting Facilities Quaker Special Risk Quirk & Company Regency Insurance Brokerage Services RIC Ins. General Agency, div of Worldwide Facilities RISCO Insurance Brokerage, Inc. Risk Placement Services, Inc. RMIS Roush Insurance Services, Inc. RT Specialty Sangamon Associates/Hotel Excess SCU - Middletown Seguros Underwriters, LLC Southern Insurance Underwriters, Inc. CMGA Southwest Risk, LP SUITELIFE by Venture Insurance Programs Tejas American General Agency The McGowan Companies Topa Insurance Company Travelers UCA General Insurance Services, Inc.

UmbrellaPro by Great Point Insurance

Resorts States Available FL NC SC TX VA All States All States TX AZ CO NC OK TN TX All States Most States All States All States AZ CA NV All States All States Most States AR KS LA MS OK TX All States except LA All States Most States LA NM OK OR TX WA State availability varies - call us!

CA CT MA ME NH NY RI VT All States All States IL IN OH All States All States CT MA ME NH NJ RI PA FL GA MO TN TX AL FL GA SC TN All except AK HI NJ NY All States TX All States CA All States

AZ CA ID IL NV OR UT WA WI

All States

ONLINE QUOTE, BIND & ISSUE. Admitted / “A” Rated Paper

Unifax Insurance Systems, Inc. USG Insurance Services, Inc. W.A. Schickedanz Agency, Inc. Walter General Agency (WGA) Western Security Surplus Insurance Brokers LLC Western Special Risks, Inc, a JenCap Holdings Co. Western Surplus Lines Agency, Inc. Wilson Smith Group

Worldwide Facilities, LLC Wright Insurance Services, LLC Zurich Programs

N56 | INSURANCE JOURNAL MARCH 4, 2019

CA All States AR IL MO AR IA IL IN KS KY MO OK TN

CA FL GA LA MO NC NJ NY SC TX VA AZ NV LA ND NM OK TX

AZ LA MD MI MS NJ NV NY OK PA TX

All States All States Nationwide

Market Advanced E&S Group All Risks, Ltd. Alliant Insurance Services AmWINS Group, Inc. AmWINS Program Udr, ResortGuard Ins. Program Anderson & Murison, Inc. Appalachian Underwriters Arlington/Roe & Co. Aspera Insurance Services, Inc. Bass Underwriters Berkley Select Burns & Wilcox CITA Insurance Services Cochrane & Company Delta General Agency Corp. Distinguished Specialty Elite Underwriters Empire Underwriters Entertainment Risk Erickson-Larsen, Inc. Gorst & Compass Insurance Heritage Specialty Insurance Hotels & Resorts Insurance Program – CITA Ins. Services (3, 4 & 5 Star Rated based on Amenities) Izzo Insurance Services, A div. of Hull & Co. James River Insurance Company Jimcor Agencies

States Available View website for state info Has Pen, All States All States All States All States All States All States IL IN KY MI MN MO OH TN WI CA CO FL OR TX WA AL CA CO FL GA LA MS NJ NV NY OR PA SC TX WA All States All States All States ID MT OR WA TX All States CA FL GA NY All except monopolistic AZ CA CO FL GA IL LA MA MD MI NJ NV NY TN TX UT VA MN MT ND NE SD WI WY CA AR OK TX

Legacy Employer Concepts, LLC M.J. Hall & Company, Inc. MAXIMUM MexiPass International Insurance Services, LLC Morstan General Agency, a div of Hull & Co., LLC NIF Group Patriot National Underwriters, Inc. Philadelphia Insurance Companies (E&S paper) Professional Liability Ins. Svcs, Inc. - Underwriting Facilities Quirk & Company Risk Placement Services, Inc. SUITELIFE by Venture Insurance Programs Tejas American General Agency Travelers USG Insurance Services, Inc. Walter General Agency (WGA) Wilson Smith Group

All States except AK HI NC AK AZ CA HI NV All States All States All States All States AR KS LA MS OK TX All States except LA

K & K Insurance Group, Inc.

Worldwide Facilities, LLC Wright Insurance Services, LLC Zurich Programs

All States All States All States All States except AK HI IA ID KS MT ND NM

All States

All States LA NM OK OR TX WA All States All States TX All States All States

AR IA IL IN KS KY MO OK TN AZ LA MD MI MS NJ NV NY OK PA TX

All States All States Nationwide

www.insurancejournal.com


2019 Hospitality Risks Directory Restaurants

Restaurants

Restaurants coverage category sponsored by:

Berkley Fine Dining Specialists - for more info, check out our ad on page 1 (East) and page 2 (Midwest). Market Abram Interstate Insurance Services, Inc. Advanced E&S Group All Risks, Ltd. Alliant Insurance Services AmWINS Group, Inc. Anderson & Murison, Inc. Appalachian Underwriters Arlington/Roe & Co. Ashley General Agency Aspera Insurance Services, Inc. Bass Underwriters Berkley Fine Dining Specialists Berkley Select Braishfield Associates, Inc. Brecht & Associates Burns & Wilcox CID Insurance Programs, Inc. CITA Insurance Services Combined Group Crusader Insurance Company Delta General Agency Corp. Distinguished Specialty Elite Underwriters Empire Underwriters Entertainment Risk Erickson-Larsen, Inc. Executive Insurance Professionals, PLLC First Choice Insurance Intermediaries, Inc. Founders Insurance Company G.J. Sullivan Company Gorst & Compass Insurance Gray-Stone & Company, Inc. Heritage Specialty Insurance Hospitality Insurance Group Hotels & Resorts Insurance Program – CITA Ins. Services (in Hotels & Resorts only) IBI - Insurance Brokers Incorporated Indemnity Excess & Surplus Agency Innovative Coverage Concepts

www.insurancejournal.com

States Available CA View website for state info Has Pen, All States All States All States All States All States IL IN KY MI MN MO OH TN WI TX CA CO FL OR TX WA AL CA CO FL GA LA MS NJ NV NY OR PA SC TX WA AZ CA CT DC GA IL MA MD MN MO NC NJ NV NY PA SC TN VA All States All States TX All States AZ CA CO ID NE NM NV OR TN TX UT WA All States Most States CA TX All States CA FL GA NY All except monopolistic AZ CA CO FL GA IL LA MA MD MI NJ NV NY TN TX UT VA MN MT ND NE SD WI WY CA GA OK TX Most States AL CO CT FL IA IL IN KS LA MD MI MN MT NC NH NV NY OH OR TN VA WI CA NV OR WA CA Most States AR OK TX CT MA NC NH PA RI VT All States IL IN MI AZ CA CO ID MT NV OR TX WA All States except VT

Market International Excess Companies IPC IPC (HNOA for food delivery) Irving Weber Associates, Inc. (no fast food) Izzo Insurance Services, A div. of Hull & Co. J.M. Wilson Jacobs & Associates James River Insurance Company Jimcor Agencies Joseph Krar & Associates KZ Insurance Brokerage, LLC Legacy Employer Concepts, LLC Lionheart Insurance Services, Inc. M.J. Hall & Company, Inc. M.J. Kelly Company MacNeill Group Market Finders Insurance Corp. MAXIMUM McClelland & Hine, A div of Worldwide Facilities McLeckie Insurance Group MexiPass International Insurance Services, LLC Midlands Management Corp. Morstan General Agency, a div of Hull & Co., LLC Nautilus Insurance Co. & Great Divide Ins. Co. NeitClem Wholesale Insurance Brokerage, Inc. New England Excess Exchange, Ltd. Next Wave Insurance Services, LLC NIF Group Number One Insurance Agency, Inc.

Origin Specialty Underwriters

Pacific Excess Insurance Marketing Patriot National Underwriters, Inc. Professional Liability Ins. Svcs, Inc. - Underwriting Facilities ProHost USA Promont Insurance Advisors (and Diners) Quaker Special Risk Quirk & Company Regency Insurance Brokerage Services RIC Ins. General Agency, div of Worldwide Facilities RISCO Insurance Brokerage, Inc. Risk Placement Services, Inc. RMIS RMS Hospitality Group (+ Franchise & Fast Food) Roush Insurance Services, Inc. RT Specialty SCU - Middletown

States Available All States AZ CA ID NV OR WA All States except FL Most States All States Most States OH All States All States except AK HI IA ID KS MT ND NM CT MA ME NH RI AZ CA CO LA NV TN All States except AK HI NC AZ CA CO HI ID NM NV OK TX UT WA WY AK AZ CA HI NV All States FL NC SC TX VA All States All States TX AZ CO NC OK TN TX All States Most States All States All States AZ CA NV CT MA MD ME NH NJ NY OH PA RI VT All States All States MA

AL AR DC GA IA IL IN KS KY LA MI MO MS NC NJ OH PA SC TN TX VA Most States AR KS LA MS OK TX

All States All States except AK All States Most States LA NM OK OR TX WA State availability varies - call us!

CA CT MA ME NH NY RI VT All States All States All except AK VT WV IL IN OH All States CT MA ME NH NJ RI PA

MARCH 4, 2019 INSURANCE JOURNAL | N57


2019 Hospitality Risks Directory Restaurants

Spas

Market Seguros Underwriters, LLC Southern Insurance Underwriters, Inc. CMGA Southwest Risk, LP

States Available FL GA MO TN TX AL FL GA SC TN All except AK HI NJ NY

Target Market Specialists Tejas American General Agency The McGowan Companies Topa Insurance Company Travelers UCA General Insurance Services, Inc. UFG Insurance/Specialty Division

All States TX All States CA All States AZ CA ID IL NV OR UT WA WI AZ CA CO ID NM NV OR UT WA

Specialty Insurance (and Delis)

AZ CA CT DE FL GA IL MA MD MI MN MO NC NJ NY OH PA RI SC TN TX

UmbrellaPro by Great Point Insurance

All States

ONLINE QUOTE, BIND & ISSUE. Admitted / “A” Rated Paper

Unifax Insurance Systems, Inc. USASIA Insurance Services W.A. Schickedanz Agency, Inc. Walter General Agency (WGA) Western Security Surplus Insurance Brokers LLC Western Special Risks, Inc, a JenCap Holdings Co. Western Surplus Lines Agency, Inc. Wilson Smith Group

Worldwide Facilities, LLC Wright Insurance Services, LLC

CA CA NV AR IL MO AR IA IL IN KS KY MO OK TN

CA FL GA LA MO NC NJ NY SC TX VA AZ NV LA ND NM OK TX

AZ LA MD MI MS NJ NV NY OK PA TX

All States All States

Spas Market Abram Interstate Insurance Services, Inc. All Risks, Ltd. AmWINS Group, Inc. Arlington/Roe & Co. Ashley General Agency Aspera Insurance Services, Inc. Bass Underwriters Braishfield Associates, Inc.

N58 | INSURANCE JOURNAL MARCH 4, 2019

States Available CA Has Pen, All States All States IL IN KY MI MN MO OH TN WI TX CA CO FL OR TX WA AL CA CO FL GA LA MS NJ NV NY OR PA SC TX WA All States

Market Burns & Wilcox CID Insurance Programs, Inc. CITA Insurance Services Combined Group Elite Underwriters First Choice Insurance Intermediaries, Inc. G.J. Sullivan Company Gateway Specialty Insurance Gorst & Compass Insurance Gray-Stone & Company, Inc. Heritage Specialty Insurance Hotels & Resorts Insurance Program – CITA Ins. Services (in Hotels & Resorts only) Indemnity Excess & Surplus Agency International Excess Companies Izzo Insurance Services, A div. of Hull & Co. James River Insurance Company Joseph Krar & Associates M.J. Hall & Company, Inc. M.J. Kelly Company MexiPass International Insurance Services, LLC Morstan General Agency, a div of Hull & Co., LLC NeitClem Wholesale Insurance Brokerage, Inc. NIF Group Philadelphia Insurance Companies (E&S paper) Professional Program Ins Brokerage, A div. of SPG Insurance Solutions Quirk & Company Regency Insurance Brokerage Services RMIS SASSI - Salon & Spa Specialty Insurance Seguros Underwriters, LLC Southern Insurance Underwriters, Inc. CMGA SUITELIFE by Venture Insurance Programs Tejas American General Agency UFG Insurance/Specialty Division USG Insurance Services, Inc. Walter General Agency (WGA) Western Security Surplus Insurance Brokers LLC Western Special Risks, Inc, a JenCap Holdings Co. Western Surplus Lines Agency, Inc. Wright Insurance Services, LLC Zurich Programs

States Available All States AZ CA CO ID NE NM NV OR TN TX UT WA All States Most States CA FL GA NY Most States CA NV OR WA All States CA Most States AR OK TX All States AZ CA CO ID MT NV OR TX WA All States All States All States CT MA ME NH RI AK AZ CA HI NV All States All States All States AZ CA NV All States All States except LA Most States LA NM OK OR TX WA State availability varies - call us!

All States Most States FL GA MO TN TX AL FL GA SC TN All States TX AZ CA CO ID NM NV OR UT WA All States

AR IA IL IN KS KY MO OK TN

CA FL GA LA MO NC NJ NY SC TX VA AZ NV LA ND NM OK TX All States Nationwide

www.insurancejournal.com


2019 Hospitality Risks Directory Special Events

Special Events Special Events coverage category sponsored by: K & K Insurance Group, Inc. - check out our company info on page 61 (in this directory).

Market Abram Interstate Insurance Services, Inc. Advanced E&S Group All Risks, Ltd. Alliant Insurance Services American Specialty Ins. & Risk Services, Inc. AmWINS Group, Inc. AmWINS Program Udr, ResortGuard Ins. Program Anderson & Murison, Inc. Appalachian Underwriters Arlington/Roe & Co. Ashley General Agency Aspera Insurance Services, Inc. Bass Underwriters Braishfield Associates, Inc. Brecht & Associates Burns & Wilcox CID Insurance Programs, Inc. CITA Insurance Services Cochrane & Company Combined Group Delta General Agency Corp. Elite Underwriters Erickson-Larsen, Inc. Executive Insurance Professionals, PLLC First Choice Insurance Intermediaries, Inc. Founders Insurance Company Gateway Specialty Insurance Gorst & Compass Insurance Gray-Stone & Company, Inc. Heritage Specialty Insurance Hospitality Insurance Group IBI - Insurance Brokers Incorporated Indemnity Excess & Surplus Agency International Excess Companies J.M. Wilson Jacobs & Associates James River Insurance Company Joseph Krar & Associates

K & K Insurance Group, Inc.

www.insurancejournal.com

States Available CA View website for state info Has Pen, All States All States All States All States All States All States All States IL IN KY MI MN MO OH TN WI TX CA CO FL OR TX WA AL CA CO FL GA LA MS NJ NV NY OR PA SC TX WA All States TX All States AZ CA CO ID NE NM NV OR TN TX UT WA All States ID MT OR WA Most States TX CA FL GA NY MN MT ND NE SD WI WY CA GA OK TX Most States AL CO CT FL IA IL IN KS LA MD MI MN MT NC NH NV NY OH OR TN VA WI All States CA Most States AR OK TX CT MA NC NH PA RI VT IL IN MI AZ CA CO ID MT NV OR TX WA All States Most States OH All States CT MA ME NH RI

All States

Market M.J. Hall & Company, Inc. Lionheart Insurance Services, Inc. (Large Events) M.J. Kelly Company MacNeill Group Market Finders Insurance Corp. MAXIMUM McClelland & Hine, A div of Worldwide Facilities McLeckie Insurance Group MexiPass International Insurance Services, LLC Midlands Management Corp. Morstan General Agency, a div of Hull & Co., LLC Nautilus Insurance Co. & Great Divide Ins. Co. NeitClem Wholesale Insurance Brokerage, Inc. New England Excess Exchange, Ltd. NIF Group Pacific Excess Insurance Marketing Philadelphia Insurance Companies (E&S paper) Professional Program Ins Brokerage, A div. of SPG Insurance Solutions Quaker Special Risk Quirk & Company Regency Insurance Brokerage Services RIC Ins. General Agency, div of Worldwide Facilities Risk Placement Services, Inc. RMIS RMS Hospitality Group Roush Insurance Services, Inc. RT Specialty SCU - Middletown Seguros Underwriters, LLC Southern Insurance Underwriters, Inc. CMGA Southwest Risk, LP Tejas American General Agency The McGowan Companies UFG Insurance/Specialty Division USASIA Insurance Services USG Insurance Services, Inc. W.A. Schickedanz Agency, Inc. Walter General Agency (WGA) Western Security Surplus Insurance Brokers LLC Western Special Risks, Inc, a JenCap Holdings Co. Western Surplus Lines Agency, Inc. Wilson Smith Group

States Available AK AZ CA HI NV AZ CA CO HI ID NM NV OK TX UT WA WY All States FL NC SC TX VA All States All States TX AZ CO NC OK TN TX All States Most States All States All States AZ CA NV CT MA MD ME NH NJ NY OH PA RI VT All States Most States All States except LA Most States Most States LA NM OK OR TX WA State availability varies - call us!

CA All States All States All except AK VT WV IL IN OH All States CT MA ME NH NJ RI PA FL GA MO TN TX AL FL GA SC TN All except AK HI NJ NY TX All States AZ CA CO ID NM NV OR UT WA CA NV All States

AR IL MO AR IA IL IN KS KY MO OK TN

CA FL GA LA MO NC NJ NY SC TX VA AZ NV LA ND NM OK TX

AZ LA MD MI MS NJ NV NY OK PA TX

MARCH 4, 2019 INSURANCE JOURNAL | N59


2019 Hospitality Risks Directory - Alphabetical Directory of Markets Abram Interstate Ins. Services, Inc. 2211 Plaza Dr., Ste. 100, Rocklin, CA 95765 Phone: 916-780-7000, Fax: 916-780-7181 Email: media@abraminterstate.com www.abraminterstate.com

Arlington/Roe & Co.

8900 Keystone Crossing, 8th Fl Indianapolis, IN 46240 Phone: 800-878-9891, Fax: 888-552-9891 Email: news@arlingtonroe.com www.arlingtonroe.com

Ashley General Agency

2040 N. Loop 336 W, Ste. 200, Conroe, TX 77304 Phone: 936-441-5959, Fax: 936-521-5922 Email: hnelson@ashleyga.com www.ashleyga.com

Advanced E&S Group

3250 N. 29th Ave., Hollywood, FL 33020 Phone: 954-461-9567, Fax: 855-289-3945 Email: sswanson@advancedesgroup.com www.advancedesgroup.com

All Risks, Ltd.

10150 York Rd., 5th Fl, Hunt Valley, MD 21030 Phone: 866-234-0955, Fax: 410-828-8179 Email: allrisksij@allrisks.com http://info.allrisks.com/insurance-journal-directory-hospitalityrisks-coverage

Aspera Insurance Services, Inc.

2221 Edward Holland Dr., Ste. 600, Richmond, VA 23230 Phone: 804-774-2101, Fax: 804-673-5697 Email: marketing@asperains.com www.asperains.com

Bass Underwriters

6951 W. Sunrise Blvd., Plantation, FL 33313 Phone: 954-473-4488, Fax: 954-316-3100 Email: businessdevelopment@bassuw.com www.bassuw.com

American Specialty Insurance & Risk Services 7609 W. Jefferson Blvd., Ste. 100, Fort Wayne, IN 46804 Phone: 260-969-5203, Fax: 260-969-4729 Email: sbatt@amerspec.com for Casinos Email: zachm@amerspec.com for Special Events www.amerspec.com

Berkley Fine Dining Specialists 301 Route 17 North, Ste. 900, Rutherford, NJ 07070 Phone: 201-518-2545 Email: dmerlo@berkleyluxurygroup.com www.berkleyluxurygroup.com

Berkley Fine Dining Specialists is a division of Berkley Luxury Group. The name is designed to clearly identify the company as an operating unit of Berkley, one of America’s largest commercial line writers, and what Berkley Fine Dining Specialists offers: tailored, all-inclusive insurance solutions for fine dining restaurants.

Berkley Select

AmWINS Group, Inc.

See Website for Locations - HQ - Charlotte, NC 28210 Phone: 704-973-3489, Fax: 704-943-9000 Email: marketing@amwins.com www.amwins.com

AmWINS Program Underwriters, ResortGuard Ins. Program

7125 El Cajon Blvd. Ste 3, San Diego, CA 92115 Phone: 800-922-7283, Fax: 619-593-2008 Email: Teresa@cidinsurance.com www.cidinsurance.com

CITA Insurance Services

681 S. Parker St., Orange, CA 92868 Phone: 888-813-9295 Email: john.jasinski@citainsurance.com www.citainsurance.com

Cochrane & Company

P.O. Box 19150, Spokane, WA 99219 Phone: 509-838-0655, Fax: 509-838-1710 Email: marketing@cochraneco.com www.cochraneco.com

Combined Group

P.O. Box 819045, Dallas, TX 75381-9045 Phone: 214-295-1600, Fax: 800-275-3194 Email: marketing@combinedgroup.com www.combinedgroup.com

Crusader Insurance Company

26050 Mureau Rd., Calabasas, CA 91302 Phone: 800-669-9800, Fax: 818-591-9856 Email: dklayman@crusaderinsurance.com www.crusaderinsurance.com

Alliant Insurance Services

1301 Dove St., Ste. 200, Newport Beach, CA 92660 Phone: 949-756-0271, Fax: 619-699-0937 Email: marcomm@alliant.com www.alliant.com

CID Insurance Programs, Inc.

233 S. Wacker Dr., Ste. 3900, Chicago, IL 60606 Phone: 312-800-6200, Fax: 312-207-1839 Email: info@berkleyselect.com www.monitorliability.com

Braishfield Associates, Inc.

2966 Commerce Park Dr., Ste. 350, Orlando, FL 32819 Phone: 407-825-9911, Fax: 407-825-9737 Email: info@braishfield.com www.braishfield.com

Delta General Agency Corp.

P.O. Box 2045, Houston, TX 77252 Phone: 713-570-2700, Fax: 713-570-2800 Email: billf@deltains.com www.deltains.com

Distinguished Specialty

11245 SE 6th St., Ste. 100, Bellevue, WA 98004 Phone: 425-213-5130, Fax: 212-297-3130 Email: thughes@distinguished.com www.distinguished.com

Elite Underwriters

395 Alhambra Cir., Coral Gables, FL 33134 Phone: 786-999-1350, Fax: 786-522-9046 Email: info@eliteunderwriters.com www.eliteunderwriters.com

Empire Underwriters

12300 Race Track Rd., Tampa, FL 33626 Phone: 813-448-9300, Fax: 813-448-9310 Email: quotes@empireunderwriters.com www.empireunderwriters.com

Entertainment Risk

One New Hampshire Ave., Ste. 200, Portsmouth, NH 03801 Phone: 603-334-3029, Fax: 603-334-3090 Email: Jeffrey.benjamin@amwins.com www.resortguard.com

11350 McCormick Rd., Ste. 1002, Hunt Valley, MD 21031 Phone: 844-368-7475 Email: info@entertainmentrisk.com www.entertainmentrisk.com

Anderson & Murison, Inc.

Erickson-Larsen, Inc.

800 W. Colorado Blvd., Los Angeles, CA 90041 Phone: 323-255-2333, Fax: 323-255-0957 Email: jmccarthy@amqts.com www.andersonmurison.com

Appalachian Underwriters

800 Oak Ridge Turnpike, Ste. A-1000, Oak Ridge, TN 37830 Phone: 888-376-9633 , Fax: 866-409-3367 Email: marketing@appund.com www.appund.com

N60 | INSURANCE JOURNAL MARCH 4, 2019

Brecht & Associates

1450 Hughes Rd., Ste. 109, Grapevine, TX 76051 Phone: 817-424-5335, Fax: 817-424-3772 Email: jbrecht@brechtassoc.com www.brechtassoc.com

Burns & Wilcox - All Offices See Website for Locations HQ - Detroit/Farmington Hills Phone: 248-932-9000, Fax: 248-932-9046 Email: quote@burns-wilcox.com www.burnsandwilcox.com

6425 Sycamore Ct. N, Maple Grove, MN 55369 Phone: 763-535-0055 Email: pbloch@ericksonlarseninc.com www.ericksonlarseninc.com

Executive Insurance Professionals, PLLC 6001 W. Interstate 20, Ste. 214, Arlington, TX 76017 Phone: 800-779-4095, Fax: 866-779-4331 Email: cheryl@execins.com www.execins.com

www.insurancejournal.com


2019 Hospitality Risks Directory - Alphabetical Directory of Markets First Choice Insurance Intermediaries, Inc. 814 A1A North, Ste. 206, Ponte Vedra Beach, FL 60173 Phone: 866-821-9572, Fax: 904-543-4501 Email: info@firstchoiceii.com www.firstchoiceii.com

HabPro

555 North Lane, Ste. 6060, Conshohocken, PA 19428 Phone: 610-941-9877, Fax: 610-941-9889 Email: habpro@nsminc.com www.nsminc.com/our-programs/habpro/

Jacobs & Associates

12782 Prospect Rd., Strongsville, OH 44149 Phone: 440-625-2690, Fax: 440-625-2731 Email: jim@jacobsnow.com www.jacobsnow.com

Heritage Specialty Insurance

609 Cheek Sparger Rd., Stes. 110-114, Colleyville, TX 76034 Phone: 866-544-1900, Fax: 866-832-0984 Email: submissions@heritagespecialty.com www.heritagespecialty.com

Hospitality Insurance Group

Founders Insurance Company 1111 E. Touhy Ave., Des Plaines, IL 60018 Contact: Pat Vaulman Phone: 800-768-0040 ext 2562, Fax: 847-296-3362 Email: pvaulman@foundersinsurance.com www.foundersinsurance.com

Founders is a multi-state specialty carrier, serving the insurance needs of independent agents for over 100 years. Founders specializes in writing Liquor Liability and Special Events (liquor & GL*) coverages for the hospitality industry. Founders is rated “A-” or “Excellent” by A.M. Best, and is a member of the Utica National Insurance Group. * (excludes AL, FL)

G.J. Sullivan Company

2400 E. Katella Ave., Ste. 500, Anaheim, CA 92806 Phone: 714-221-9500, Fax: 714-876-2252 Email: MeskoD@gjs.com www.gjsullivan.com

Gateway Specialty Insurance 1170 Devon Park Dr., Wayne, PA 19087 Phone: 877-977-4474, Fax: 610-254-1855 Email: info@gatewayspecialty.com www.gatewayspecialty.com

Gorst & Compass Insurance

9310 Topanga Canyon Blvd., Chatsworth, CA 91311 Phone: 818-507-0900, Fax: 818-507-1133 Email: mail@gorstcompass.com www.gorstcompass.com

Gray-Stone & Company, Inc.

275 E. Hillcrest Dr., Ste. 250, Thousand Oaks, CA 91360 Phone: 805-494-4440, Fax: 805-267-1769 Email: info@gray-stone.com ; hstone@gray-stone.com www.gray-stone.com

106 Southville Rd., Southborough, MA 01772 Phone: 877-366-1140, Fax: 508-836-4940 Email: MTrombly@hmic.com www.HMIC.com

Hotels & Resorts Insurance Program – CITA Insurance Services 681 S. Parker St., Ste. 300, Orange, CA 92868 Phone: 888-813-9295 Email: john.jasinski@citainsurance.com www.citainsurance.com

IBI - Insurance Brokers Incorporated 400 Camby Ct., Greenwood, IN 46142 Phone: 800-536-4783, Fax: 317-885-7011 Email: bcollins@goibi.com www.goibi.com

500 W. Putnam Ave., Ste. 400, Greenwich, CT 06831 Phone: 203-763-4953, Fax: 732-761-9905 Email: roneill@greatpointins.com www.UmbrellaPro.com

UmbrellaPro® is the fastest and most user friendly online platform for insurance professionals to submit, quote, bind, and issue Umbrella coverage in 6 EXCLUSIVE COMMERCIAL UMBRELLA PROGRAMS. Brought to you by Great Point Insurance, the nation’s leading Umbrella Program Administrator, UmbrellaPro puts you in control from start to finish.

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6641 W. Broad St., Ste. 300, Richmond, VA 23230 Phone: 804-289-2700, Fax: 804-549-5087 Email: info@jamesriverins.com www.jamesriverins.com

Jimcor Agencies

60 Craig Rd., Montvale, NJ 07645 Phone: 201-573-8200, Fax: 201-573-8820 Email: marketing@jimcor.com www.jimcor.com

Joseph Krar & Associates, Inc. 1676 West St., Southington, CT 06489 Phone: 860-628-3967, Fax: 860-628-3967 Email: submissions@jkrar.com www.jkrar.com

Indemnity Excess & Surplus Agency

1915 NE Stucki Ave., Ste. 450, Hillsboro, OR 97006 Phone: 503-526-9700, Fax: 503-626-2260 Email: submissions@ies-xs.com www.ies-xs.com

Innovative Coverage Concepts

8 Wood Hollow Rd., Parsippany, NJ 07054 Phone: 877-615-5488 Email: robertc@innocov.com www.innocov.com

International Excess Companies

3700 Park East Dr., Ste. 250, Beachwood, OH 44122 Phone: 216-797-9700, Fax: 216-797-9970 Email: kennethkukral@intlxs.com www.intlxs.com

IPC

P.O. Box 1150, Gardnerville, NV 89410 Phone: 775-782-6655, Fax: 775-782-6654 Email: tammy@ipc-nv.com www.ipc-nv.com

Irving Weber Associates, Inc. (IWA)

Great Point Insurance

James River Insurance Company

180 E. Main St., Ste. 208, Smithtown, NY 11787 Phone: 855-661-4557, Fax: 888-622-0414 Email: info@iwains.com www. iwains.com

Izzo Insurance Services, A div of Hull & Co. 150 S. Bloomingdale Rd., Bloomingdale, IL 60108 Phone: 800-800-1704, Fax: 630-582-2803 Email: MJones@IzzoInsurance.com www.IzzoInsurance.com

J.M. Wilson

8036 Moorsbridge Rd., Portage, MI 49024 Phone: 800-282-8113, Fax: 269-327-2620 Email: cbaldwin@jmwilson.com www.jmwilson.com

K & K Insurance Group, Inc.

1712 Magnavox Way, Ft. Wayne, IN 46804 Special Events Ph: 800-553-8368, Fx: 260-459-56243 Resorts Ph: 877-355-0315, Fx: 260-459-5990 Email: kk.general@kandkinsurance.com www.kandkinsurance.com

With over 60 years of experience, K&K is a leading provider of specialty coverage for the sports, leisure, recreation, entertainment and motorsports industries. Over 5,000 agents across the U.S. choose K&K for competitive rates and admitted coverage—visit kandkinsurance.com for applications and underwriting guidelines.

Legacy Employer Concepts, LLC

3030 N. Rocky Point Dr., Ste. 150A, Tampa, FL 33607 Phone: 813-460-9166 Email: brett@legacyemployerconcepts.com www.legacyemployerconcepts.com

Lionheart Insurance Services, Inc. 2742 Kingclaven Dr., Henderson, NV 89044 Phone: 702-834-8140, Fax: 702-834-8140 Email: Sandra@lionheartins.net www.lionheartins.com

M.J. Kelly Company

4415 E. Sunshine, Springfield, MO 65809 Phone: 800-725-7211, Fax: 800-678-7211 Email: khampton@mjkelly.com www.mjkelly.com

MARCH 4, 2019 INSURANCE JOURNAL | N61


2019 Hospitality Risks Directory - Alphabetical Directory of Markets Nautilus Insurance Co. & Great Divide Ins. Co. 7233 E. Butherus Dr., Scottsdale, AZ 85260 Phone: 480-951-0905, Fax: 480-951-9730 Email: tpytel@nautilus-ins.com www.nautilusinsgroup.com

M.J. Hall & Company, Inc. P.O. Box 192, Stockton, CA 95201 Phone: 209-948-8108, Fax: 209-465-3843 Email: staceys@mjhallandcompany.com www.mjhallandcompany.com

MacNeill Group

P.O. Box 45-9003, Sunrise, FL 33345-9003 Phone: 954-331-4800 ext. 2031, Fax: 954-331-4848 Email: mgmarketing@macneillgroup.com www.macneillgroup.com

NeitClem Wholesale Insurance Brokerage, Inc. 7442 N. Figueroa St., Los Angeles, CA 90041 Phone: 323-258-2600, Fax: 323-258-2676 Email: jcenteno@neitclem.com www.neitclem.com

New England Excess Exchange, Ltd. P.O. Box 650, Barre, VT 05641 Phone: 800-548-4301, Fax: 800-347-4935 Email: achase@neee.com www.neee.com

Market Finders Insurance Corp P.O. Box 6549, Louisville, KY 40206 Phone: 800-626-5660, Fax: 502-426-7970 Email: sdavis@mfic.com www.mfic.com

222 S. Riverside Plaza, Ste. 2340, Chicago, IL 60606 Phone: 312-559-9348, Fax: 312-559-0930 Email: joem@maxib.com www.maxib.com

McClelland and Hine, A division of Worldwide Facilities, LLC P.O. Box 700930, San Antonio, TX 78270 Phone: 800-333-2017, Fax: 210-366-2407 Email: deniser@mhi-mga.com www.mhi-mga.com

Next Wave Insurance Services, LLC 610 W. Ash St., Ste. 1703, San Diego, CA 92101 Phone: 619-232-3900, Fax: 619-234-6500 Email: submissions@nextwaveins.com www.nextwaveins.com

NIF Group

30 Park Ave., Manhasset, NY 11030 Phone: 516-365-7440, Fax: 516-365-7392 Email: marketing@nifgroup.com www.nifgroup.com

Number One Insurance Agency, Inc. 91 Cedar St., Milford, MA 01757 Phone: 508-634-2902, Fax: 508-634-2930 Email: atobin@massagent.com www.massagent.com

P.O. Box 770, Naples, TX 75568 Phone: 903-897-9090, Fax: 760-462-1696 Email: bill@mcleckie.com www.mcleckie.com

3817 NW Expy, Ste. 1000, Oklahoma City, OK 73112 Phone: 800-800-4007, Fax: 800-800-4007 Email: marketing@midman.com www.midlandsmgt.com

Morstan General Agency of Florida II, Inc. 1835 Banks Rd., Margate, FL 33063 Phone: 800-261-5177, Fax: 516-302-8951 Email: pwoodard@morstan.com www.morstan.com

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5802 Thunderbird, Ste. 100, Lago Vista, TX 78645 Phone: 800-761-7547, Fax: 512-327-5834 Email: underwriting@plisinc.com www.plisinc.com

371 Bel Marin Keys Blvd., Novato, CA 94949 Phone: 415-475-4300, Fax: 415-475-4303 Email: info@ppibcorp.com www.ppibcorp.com

ProHost USA

4500 Park Glen Rd., Ste. 410, Minneapolis, MN 55416 Phone: 952-922-2404 Email: info@prohostusa.com www.prohostusa.com

Promont Insurance Advisors

1 E. Wacker Dr., Ste. 1920, Chicago, IL 60601 Phone: 312-262-3334, Fax: 312-262-3301 Email: gmorris@promontadvisors.com www.promontadvisors.com

Quaker Special Risk

See Website for Locations in NJ, NY, FL, MA Headquarters - Eatontown, NJ 07724 Phone: 800-447-4180, Fax: 732-223-9072 Email: creid@qsr-insurance.com www.quakerspecialrisk.com

Quirk & Company

Regency Insurance Brokerage Services

MexiPass International Insurance Services, LLC

Midlands Management Corp.

Professional Liability Insurance Svcs, Inc. - Underwriting Facilities

P.O. Box 792030, San Antonio, TX 78279 Phone: 800-299-9421, Fax: 210-340-4075 Email: lvazquez@quirkco.com www.quirkco.com

McLeckie Insurance Group

P.O. Box 60727, Pasadena, CA 91116 Phone: 800-639-4727, Fax: 800-639-4727 Email: jorge@mexipass.com www.mexipass.com

One Bala Plaza, Bala Cynwyd, PA 19004 Phone: 800-873-4552, Fax: 610-617-7940 Email: phlysales@phlyins.com www.phly.com

Professional Program Insurance Brokerage, A division of SPG Insurance Solutions, LLC

Next Wave’s program administrator and wholesale services offer insurance agents and brokers a broad range of products, along with access to top rated carrier partners. We deliver superior coverage and pricing solutions for most industry groups.

MAXIMUM

Philadelphia Insurance Companies

Origin Specialty Underwriters

1701 Golf Rd., Ste. 3-615, Rolling Meadows, IL 60008 Phone: 847-278-0506 Email: ddjordjevic@origin-specialty.com www.origin-specialty.com

Pacific Excess Insurance Marketing 6363 Katella Ave., Cypress, CA 90630 Phone: 800-222-5582, Fax: 714-228-7838 Email: marketing@pacificexcess.com www.pacificexcess.com

Patriot National Underwriters, Inc. P.O. Box 803143, Dallas, TX 75380 Phone: 972-239-1458, Fax: 972-233-3487 Email: corky.ellis@patriotnational.com www.patriotnational.com

P.O. Box 190, Hallandale Beach, FL 33008-0190 Phone: 800-982-1895, Fax: 954-454-5862 Email: Submissions@RegencyBrokerage.com www.RegencyInsuranceBrokerage.com

RIC Insurance General Agency, A division of Worldwide Facilities, LLC 1330 N. Dutton Avenue., Ste. 200, Santa Rosa, CA 95401 Phone: 888-693-7892, Fax: 866-577-7595 Email: ricins@ric-ins.com www.ric-ins.com

RISCO Insurance Brokerage, Inc.

60 Catamore Blvd., East Providence, RI 02914 Phone: 401-435-5400 Email: info@risco-inc.com www.risco-inc.com

www.insurancejournal.com


2019 Hospitality Risks Directory - Alphabetical Directory of Markets Risk Placement Services, Inc.

Southwest Risk, LP

Unifax Insurance Systems, Inc.

RMIS

Specialty Insurance

USASIA Insurance Services

SUITELIFE by Venture Insurance Programs

USG Insurance Services, Inc.

Tejas American General Agency

W.A. Schickedanz Agency, Inc.

The McGowan Companies

Walter General Agency (WGA)

50+ Locations, Headquarters - Rolling Meadows, IL 60008 Phone: 866-595-8413 Email: Contact_Us@RPSins.com www.rpsins.com P.O. Box 87023, Yorba Linda, CA 92887 Phone: 714-738-1383, Fax: 714-921-1160 Email: quoteRMIS@RMISmga.com www.RMISmga.com

8144 Walnut Hill Ln., Ste. 1400, Dallas, TX 75231 Phone: 214-206-4900, Fax: 214-206-4901 Email: wwrobel@swrisk.com www.swrisk.com 1610 Route 88 Ste. 102, Brick, NJ 08724 Phone: 732-701-8900, Fax: 732-458-3728 Email: clewis@specialtyagency.com www.specialtyagency.com 1301 Wrights Lane East, West Chester, PA 19380 Phone: 800-282-6247 ext. 276, Fax: 610-692-5977 Email: marketing@suitelifeins.com www.suitelifeins.com

RMS Hospitality Group

100 Ring Rd. West, Ste. 202, Garden City, NY 11530 Phone: 516-742-8585 ext. 204, Fax: 516-742-5678 Email: info@rmshg.com www.rmshg.com

RMS HG presents an exclusive insurance program for your Hospitality Industry clientele with “A” rated carriers. A platform like no other in the Hospitality Industry, RMS HG provides a solution to the insurance agent/broker community for hospitality risks with a program that offers comprehensive and flexible coverage forms at competitive premiums.

Roush Insurance Services, Inc. P.O. Box 1060, Noblesville, IN 46061 Phone: 800-752-8402, Fax: 317-776-6891 Email: info@roushins.com www.roushins.com

RT Specialty, LLC

1792 Woodstock Rd., Bldg. 200, Roswell, GA 30075 Phone: 770-971-9975, Fax: 770-971-7608 Email: jason.murrey@rtspecialty.com www.rtspecialty.com

Sangamon Associates/Hotel Excess

65 S. Main St., Ste. AC-200, Pennington, NJ 08534 Phone: 609-818-9534, Fax: 609-818-9535 Email: bcleave@sangamonassociates.com www.hotelexcess.com

SASSI - Salon & Spa Specialty Insurance 21 Maple Ave., Bay Shore, NY 11706 Phone: 888-823-9380, Fax: 631-666-7646 Email: info@brownyard.com www.sassiagency.com

1620 La Jaita Dr., Ste. 300, Cedar Park, TX 78613 Phone: 512-346-0030, Fax: 512-342-2803 Email: marketing@taga1.com www.taga1.com Old Forge Ctr, 20595 Lorain Rd. Fairview Park, OH 44126 Phone: 440-333-6300, Fax: 440-333-3214 Email: syoung@mcgowaninsurance.com www.mcgowaninsurance.com

Topa Insurance Company

24025 Park Sorrento, Ste. 300, Calabasas, CA 91302 Phone: 818-466-5900 Email: topa-marketing@topa-ins.com www.topa-ins.com

Travelers

Contact your local Commercial Accounts Representative for more information. www.travelers.com

UCA General Insurance Services, Inc. 6363 Katella Ave., Cypress, CA 90630 Phone: 800-222-5582, Fax: 714-228-7855 Email: marketing@ucageneral.com www.ucageneral.com

UFG Insurance/Specialty Division

725 S. Figueroa St., Ste. 1870, Los Angeles, CA 90017 Phone: 213-634-6421 Email: gbohan@unitedfiregroup.com www.ufginsurance.com

Seguros Underwriters, LLC

800 Oak Ridge Turnpike, Ste A-1000, Oak Ridge, TN 37830 Phone: 888-981-1701, Fax: 877-834-3882 Email: marketing@segurosuw.com www.segurosuw.com

Southern Insurance Underwriters, Inc. CMGA 4500 Mansell Rd., Alpharetta, GA 30022 Phone: 800-568-1700, Fax: 678-498-4610 Email: marketing@siuins.com www.siuins.com

www.insurancejournal.com

319 Union Ave., Pomona, CA 91768 Phone: 909-618-0288, Fax: 909-618-0289 Email: shirley@usasia-ins.com www.usasia-ins.com 1000 Town Center Wy, Ste. 300, Canonsburg, PA 15317 Phone: 800-886-3897, Fax: 724-265-5751 Email: jkessel@usgins.com www.usgins.com 300 W. Main St., Belleville, IL 62220 Phone: 800-869-9976, Fax: 618-233-0672 Email: submissions@was-irp.com www.was-irp.com

273 Clarkson Rd., Ste. 102, Ellisville, MO 63011 Phone: 636-391-4841, Fax: 636-391-2115 Email: newquotes@wgamo.com www.wgamo.com

Western Security Surplus Insurance Brokers, Inc. 5800 Granite Pkwy, Ste. 300, Plano, TX 75024 Phone: 972-702-0500, Fax: 972-702-0504 Email: info@wssib.com www.wssib.com

Western Special Risks, Inc., a JenCap Holdings Company 9059 W. Lake Pleasant Pkwy, Ste. 340, Peoria, AZ 85382 Phone: 888-317-5575, Fax: 623-977-4622 Email: rwilliams@westernspecialrisks.com www.westernspecialrisks.com

Western Surplus Lines Agency, LLC P.O. Box 6609, Abilene, TX 79608 Phone: 800-592-4408, Fax: 325-695-0371 Email: fpeck@westernsurplus.com www.westernsruplus.com

Wilson Smith Group

1001 S. Dairy Ashford, Ste. 110, Houston, TX 77077 Phone: 713-808-9770, Fax: 713-808-9717 Email: info@wilsonsmithgroup.com www.wilsonsmithgroup.com

Worldwide Facilities, LLC

SCU - Middletown

421 Wadsworth St., Middletown, CT 06457 Phone: 860-347-9600, Fax: 860-347-9611 Email: Ctapps@scui.com www.scui.com/offices/middletown/

26050 Mureau Rd., Calabasas, CA 91302 Phone: 800-669-9800, Fax: 818-591-9856 Email: dklayman@crusaderinsurance.com www.crusaderinsurance.com

UmbrellaPro by Great Point Insurance

500 W. Putnam Ave., Ste. 400, Greenwich, CT 06831 Phone: 203-763-4953, Fax: 732-761-9905 Email: roneill@greatpointins.com www.UmbrellaPro.com

UmbrellaPro® is the fastest and most user friendly online platform for insurance professionals to submit, quote, bind, and issue Umbrella coverage in 6 EXCLUSIVE COMMERCIAL UMBRELLA PROGRAMS. Brought to you by Great Point Insurance, the nation’s leading Umbrella Program Administrator, UmbrellaPro puts you in control from start to finish.

See Website for Locations Headquarters - Los Angeles, CA 90017 Phone: 213-236-4500, Fax: 213-244-9655 Email: info@wwfi.com www.wwfi.com

Wright Insurance Services, LLC

24551 Del Prado, Ste. 4126, Dana Point, CA 92629 Phone: 949-489-1833, Fax: 949-489-5702 Email: robert@robertwrightinsurance.com www.robertwrightinsurance.com

Zurich Programs

13810 FNB Pkwy, Omaha, NE 68154 Phone: 866-873-0782 Email: usz.zpm@zurichna.com www.zprogramsmatch.com

MARCH 4, 2019 INSURANCE JOURNAL | N63


Idea Exchange: Real Estate

Fending Off Disaster in a Changing World

M

any real estate consumers don’t think about insurance very much. Most assume coverage is always By Rob Barber available — just a phone call away. Few worry that insurance won’t be there. But what if such assumptions are wrong? The real estate marketplace — and with it a big chunk of the nation’s economy — is dependent on insurance in one form or another. It’s the inter-related web of insurance and insurance-like financial structures that keeps buyers coming back for more houses and investors demanding more mortgages. Yet the reality is that risk factors are in transition and new liabilities increasingly impact the marketplace. More and more consumers face higher insurance standards, steeper costs, fewer options and sometimes no options at all. Risks that were rare yesterday are increasingly common. Marginal properties are being

washed out of the system and with them home sales and mortgage originations. The most visible changes — but not the only changes or arguably even the biggest changes — relate to claims from such things as floods, fires, and droughts. “Most insurance and reinsurance companies are getting smart on climate change and extreme weather events and what it will mean for their viability in the coming years and decades,” said Mark Gibbas, president and CEO with Weather Source. Gibbas said that efforts are now underway to plan for insurance coverage in the future. The Task Force for Climate Disclosure (TFCD) is an organization that is advocating for banks, financial institutions, reinsurance/insurance, and similar companies to engage on climate change so as to not be blindsided from it, he said. The Task Force has more than 500 supporting organizations worldwide, including U.S. backers such as Accenture, Bank of America, Blackrock, CalPERS, Citi Group, and others.

Big Data Risk Mitigation

Insurtech companies like Cape Analytics are applying big data concepts to property data from ATTOM Data Solutions along with other datasets to help insurance carriers and others take action to reduce their exposure to risk associated with the changing climate, according to product manager Kevin Van Leer. “Whether during underwriting, rating, or renewing, information about properties is critical for carriers to understand their exposure to growing risks from climate change-driven impacts,” he said. “Data ranging from wind and hail-related information such as roof

geometry and roof condition to wildfire risk factors like fuel load and vegetation clearance, allow insurers to innovate new products and proactively work with their customers to prevent damage to their homes, before a catastrophe strikes. At Cape Analytics, we generate new forms of actionable, risk-relevant data, using computer vision and machine learning to analyze aerial imagery of properties across the U.S.” “Insurance carriers will certainly cancel policies in instances where there are repeat fires and often do not provide coverage in high-risk areas,” said Robyn Markow, AVP of client relations with the Quality Claims Management, a licensed public adjuster that provides hazard insurance-related services to the mortgage industry and consumers. “As California wildfires grow larger and more intense,” reported the Los Angeles Times in August, “an increasing number of insurance companies are not renewing policies for customers who live in areas they deem too risky to cover. The state estimates that more than 1 million California homes are considered at high risk for wildfires.” According to the paper “a California Department of Insurance report found that the number of homeowners in the wildland-urban interface who complained about getting dropped by their plans more than tripled from 2010 to 2016. Complaints about increased premiums rose 217 percent.” Not so fast, say the insurance companies. Dropping policies is not something done lightly. “Issuing a non-renewal notice to a home insurance policyholder, however, is something an insurer does with great reluctance,” said Michael Barry, head of media and public affairs for the Insurance Information Institute.

Flood Risk Hitting Home

In 2017 Hurricane Harvey hit Texas and Louisiana, especially the Houston area. Risk Management Solutions (RMS) estimates that insured losses might amount to as much as $40 billion. That’s a big number, but what’s really big is the overall impact. According to the National Oceanic


and Atmospheric Administration (NOAA), the storm produced $127.5 billion in total losses. What does the public do when confronted with more than $80 billion in uninsured storm losses? Figures from ATTOM Data Solutions show that as of July 2018 foreclosure starts were up just 7 percent in Texas. That’s not a big number but don’t let the state figure fool you. In Houston foreclosure starts increased by 76 percent — the third consecutive month with a double-digit year-over-year increase. And yet Houston homes continue to sell. Not just after Hurricane Harvey but also after the Memorial Day floods in 2016 and 2017. The National Association of Realtors found Houston home prices in the second quarter were up 3.7 percent from a year earlier. One reason home values are rising in high-risk areas is simply that local populations are increasing. Between 1980 and 2017, The Wall Street Journal said, “Gulf and East Coast shoreline counties, those vulnerable to hurricane strikes, increased by 160 people per square mile, compared with 26 people per square mile in the rest of the mainland, over the same period.” Houston home prices are rising despite three “500-year” floods in three years. It seems counterintuitive, but the Houston

phenomenon is commonplace. Across America, homes in disaster-prone areas are in demand. Research from ATTOM’s 2018 U.S. Natural Hazard Housing Risk Index found that median home prices in high-risk cities appreciated 40 percent in the last 10 years. That’s 1.7 times the appreciation in the overall U.S. housing market during the same time period. Still, there are signs that demand for homes may be weakening in areas high risk for specific types of natural hazards — namely flood, hurricane and wildfire, all three which were the cause of substantial damage to homes in 2017. The ATTOM report shows that median home prices in the highest risk category for flooding are up 12 percent compared to 10 years ago, half the overall market appreciation of 24 percent. Home price appreciation in areas at the highest risk for hurricane storm surge and wildfire also tracked below the overall market. As home prices continue to rise, even in areas at high risk for flooding, lenders can no longer rely on outdated appraisals to determine how much insurance is needed for homes securing loans.

March 4, 2019

March 4, 2019

Pennsylvania Manufactuers’ Association Insurance Company 380 Sentry Parkway Blue Bell, PA 19422-0754

Manufacturers Alliance Insurance Company 380 Sentry Parkway Blue Bell, PA 19422

The above company has made application to the Division of Insurance to amend their Foreign Company License to transact Property and Casualty Insurance in the Commonwealth of Massachusetts. Any person having any information regarding the company which relates to its suitability for the license or authority the applicant has requested is asked to notify the Division by personal letter to the Commissioner of Insurance, 1000 Washington Street, Suite 810, Boston, MA 02118-6200, Attn: Financial Surveillance and Company Licensing within 14 days of the date of this notice.

INSURANCEJOURNAL.COM

Barber is the CEO ATTOM Data Solutions, a national property data warehouse for more than 155 million U.S. properties. Website: www.attomdata.com.

The above company has made application to the Division of Insurance to obtain a Foreign Company License to transact Property and Casualty Insurance in the Commonwealth of Massachusetts. Any person having any information regarding the company which relates to its suitability for the license or authority the applicant has requested is asked to notify the Division by personal letter to the Commissioner of Insurance, 1000 Washington Street, Suite 810, Boston, MA 02118-6200, Attn: Financial Surveillance and Company Licensing within 14 days of the date of this notice.

March 4, 2019 Pennsylvania Manufacturers Indemnity Company 380 Sentry Parkway Blue Bell, PA 19422 The above company has made application to the Division of Insurance to obtain a Foreign Company License to transact Property and Casualty Insurance in the Commonwealth of Massachusetts. Any person having any information regarding the company which relates to its suitability for the license or authority the applicant has requested is asked to notify the Division by personal letter to the Commissioner of Insurance, 1000 Washington Street, Suite 810, Boston, MA 02118-6200, Attn: Financial Surveillance and Company Licensing within 14 days of the date of this notice.

Advertisers Index Applied Underwriters 2, 3, 68 www.auw.com Berkley Luxury Group www.berkleyluxurygroup.com E1, M2 Brighthouse Financial 4, 5 www.brighthousefinancialpro.com California Earthquake Authority mvp.earthquakeauthority.com W7 Cypress P&C www.cypressig.com FL9 Financial Times Live www.live.ft.com/FTIIS 41 FSLSO www.fslso.com FL3 GIC Underwriters, Inc. www.gicunderwriters.com FL1 Golden Bear Insurance www.goldenbear.com 7, W9 Insurance Associates of America www.iaanetwork.com 29 Louisiana Commerce & Trade Assoc. www.lctacomp.com S1 M.J. Hall & Company www.mjhallandcompany.com W11, W12 Monarch E&S Insurance Services www.monarchexcess.com W5 Pacific Gateway Insurance Services www.pgiainsurance.com W3 Prepared Insurance www.preparedins.com FL2 PSIC - Pacific Specialty Insurance Co. www.wwfi.com W1 Smart Choice Agents Program www.smartchoiceagents.com 10, 11 Society of Insurance Trainers & Educators www.insurancetrainers.org 47 St. James Insurance Group www.stjamesinsurance.com FL5 St. Johns Insurance Company www.stjohnsinsurance.com S1, FL20 State Compensation Insurance Fund www.statefundca.com W6 Texas Mutual www.texasmutual.com SC2 United Fire Group www.ufgsolutions.com PA1

MARCH 4, 2019 INSURANCE JOURNAL | 65


Closing Quote The Drone Claims Scenario

D

By Heather McMahon

o you own or know somebody who owns a drone? Think about this past year — have you had experiences where you encountered a drone? Perhaps you are attending an outside public event, going for a walk or dining on an outdoor patio when you hear a continuous low humming sound. Somebody points to the sky and marvels or grumbles about these machines creeping up around us. At first thought, drones may seem fun or intrusive depending on who you ask. But they should be regarded as a unique piece of technology that carries with it a high consequence of risk. The definition of a drone is a remote-controlled pilotless aircraft or missile. Alarm bells should be ringing for these flying hazards. With the rise of drone operation and resulting claims, agents and brokers should ensure clients obtain proper coverage. Drone sales have seen growth in the last few years. The forecast from the Federal Aviation Administration (FAA) projects small model hobbyist usage to 2.4 million units by 2020 (“FAA Releases Aerospace Forecast,” 2018). That’s 2.4 million units by design to be utilized in an uncontrolled environment with no required training. Recently, the FAA Reauthorization Act of 2018 was signed into law, which provides limited conditions for hobbyist and recreational use, however, until the new legislation is reviewed for possible execution, recreational drone

66 | INSURANCE JOURNAL | MARCH 4, 2019

usage continues to go largely unchecked. A typical drone-related claim might be an invasion of privacy or loss/damage to the drone itself. However, other scenarios that could lead to claims are: • An inexperienced drone operator is flying a drone in the street when a car comes down the road. The drone operator attempts to fly the drone the opposite way of the vehicle, but due to inexperience, flies toward the vehicle, crashing into the windshield. The driver attempts to swerve and crashes into a retaining wall. There are injuries to the passenger and damages to the vehicle and wall. • A teenager is playing in the backyard with his new drone when he loses control and lands in the neighbor’s fenced yard. The teenager attempts to retrieve the drone by climbing the fence, and he gets bit in the leg by the neighbor's dog and damages the fence. New technologies like drones bring costly exposures and hazardous conditions that didn’t exist before. Insurance agents need to understand risks so they can educate customers and ensure protection with adequate liability limits. One misconception is losses that arise from drone activity are excluded due to aircraft exclusions. Be sure to check a policy's exclusion and definition sections. A standard exclusion and definition under an ISO Homeowner policy are: Bodily injury, property

damage, or personal injury is excluded arising out of the

ownership, maintenance or use of “aircraft” and “aircraft” is defined as any contrivance used or designed for flight except model or hobby aircraft not used or designed to carry people or cargo.

Typically, “model” or “hobby” is not defined in the policy. When policy words are not defined, the dictionary or legal definition is applied. The Merriam-Webster definition of “model” is a miniature representation of something. The Merriam-Webster definition of hobby is a pursuit outside one’s regular occupation, engaged in especially for relaxation. It is arguable that a drone falls within the exception to the exclusion since it is a miniature representation of an aircraft not designed to carry people being utilized outside one’s regular occupation. An additional thought to consider is when drones have accessories to carry cargo. That brings a new element that could mean drones would fall under the exclusion. Cargo is typically not defined by a homeowner policy. The Merriam-Webster definition of cargo is the goods or merchandise conveyed in a ship, airplane or vehicle. This article’s aim is to bring light from a claim’s perspective. Whether intent is to provide, limit or exclude coverage for operating a drone, awareness of the risks and coverages is the first step to manage these emerging hazards. McMahon is vice president and claim manager at ERIE Insurance in Lexington, Ky. INSURANCEJOURNAL.COM


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