WaterPlus: Insurance for Irrigation Districts and Water Entities
S
everal years ago, recognizing that few insurers had a dedicated proprietary form for water entities, the insurance company Allied Public Risk created the WaterPlus program. It provides both property and liability insurance to about 3,000 water-related entities around the nation, including water districts, water authorities, sanitation and wastewater facilities, irrigation entities, and specialpurpose districts. In this interview, George Pappas, a senior vice president for distribution at Allied Public Risk, tells Irrigation Leader about the advantages of WaterPlus and the many factors an irrigation entity should consider when choosing a policy. Irrigation Leader: Please tell us about your background. George Pappas: I’m originally from the Northeast. I was raised in Pennsylvania and attended Hobart College in Geneva, New York, in the beautiful Seneca Lake area. After graduation, a lot of my friends moved on to Boston, and I couldn’t resist going there as well. In Boston, I received my MBA at Suffolk University with a concentration in marketing. I’ve been in the insurance industry for over 20 years, working for various insurance carriers and managing general agencies. Irrigation Leader: Please tell us about Allied Public Risk. George Pappas: Allied Public Risk is a specialized underwriting manager consisting of experts with an exclusive concentration on the public sector and its complex insurance needs. We’ve partnered with financially stable national carriers and developed customized insurance programs for municipalities, emergency service organizations, and water-related entities, including irrigation entities. Irrigation Leader: Please tell our readers about the WaterPlus insurance program. George Pappas: WaterPlus is a program that we developed and launched in 2012, although we’ve had other programs in the water space going back to the 1990s. WaterPlus is a program specifically designed for water-related entities. It focuses on water districts, water authorities, sanitation and wastewater facilities, irrigation entities, and specialpurpose districts. The program provides both property and liability insurance (including worker’s compensation in California only) for about 3,000 water-related entities around the nation. About one-fifth of that portfolio consists of irrigation districts, both small and large.
34 | IRRIGATION LEADER | January 2021
Irrigation Leader: What is the history behind the creation of WaterPlus? George Pappas: We discovered that a lot of generalist insurance companies didn’t really have proprietary forms for water entities. As a result, their policies were not responsive to the issues of those businesses, and there were a lot of exclusions, resulting in numerous denied claims. There was a real need for and interest in a program specifically designed for the exposures water entities face today. We developed the program largely out West. We’ve been marching east for about 20 years, but a large portion of our portfolio is still in the West, where water is still king. Irrigation Leader: What are the advantages for irrigation districts of being part of this group? George Pappas: WaterPlus is a guaranteed-cost program, meaning that the insured pays a fixed premium for an annual policy term. It’s not a pooled program in which you may share your losses with other members, you can be assessed for a premium increase due to losses at any time, and the other members of your program are not waterrelated entities. The problem with heterogenous pools is that you get a lot of distinctive municipal exposures, such as those related to law enforcement, and can be assessed for the bad behavior of other members of the pool. Sometimes there is also a lack of oversight from the various departments of insurance when it comes to pools. This is an issue when solvency is a concern. Problems can also arise when a pool lacks funds to pay for claims. WaterPlus’s limits are not shared, the insureds are homogeneous, and the program is admitted by various departments of insurance with proper oversight. WaterPlus is underwritten by Allied World, which has an A (excellent) rating from A.M. Best. The good news about our program is that there are separate limits for each individual policy for each insured. You’re not going to be sharing limits or losses with other group members. If an insured has losses, the premium may increase accordingly for that specific insured, but it will not affect the other insureds in our book of business. Nor do we bump up your premium or rate in the middle of a policy due to claim activity. Irrigation Leader: Is a guaranteed cost program more predictable than a pooled program? George Pappas: I would say so. Pooled programs simply do not have the national diversification to absorb irrigationleadermagazine.com
