Topic

Messages

Errors and Omissions Insurance

We are in the process of reviewing our errors and omissions policy. As most of you know there has been significant increases in the insurance industry over the past year after the September 11 incidents. Does anyone know any other companies/brokers that sell this type of insurance? If so, can I ask what company you deal with and what is the premium that you are paying for what amount of sales, how many clients etc.

Tracy Schafer
Controller
Baker Associates

The E&O premiums are shooting through the roof this year. We were with Employers Re until they stopped writing this kind of policy. Our broker then switched us to AIG. Their policy is reasonably good and they offered us very good rates until our renewal this year when we learnt that our premiums are going up 300%. Our broker shopped around but not much luck so I gues the whole industry is going a turbulent time. It should eventually come down!

Johnson Paul
Controller
Campbell Michener & Lee, Toronto

We have a policy through Traveler's Insurance, and the rates are very reasonable. Our broker set it up for us. Her name is Eileen Wilcox, and she is with HMS Insurance. She can be reached at 410-337-9755. Their website can be found at www.hmsia.com Hope that helps.

Terry L. Jones, Jr.
Controller
Harvey and Daughters, Inc.

Since my dad has been an independent commerical insurance broker for over 30 years, I forwarded Tracy's posting to him. His reply follows.

Mark Robillard Developer, Clients & Profits

----------

The insurance industry is in one of the most unprofitable periods in its history. Not only are professional liability rates skyrocketing, you will see increases in property and general liability premiums as well. A possible solution for the ad and design business may be in group buying. This has been a very effective way for me to get hard to place insurance. These groups are sometimes true groups such as dairy co-ops, but are most often are what we call "affinity" groups. Since there is an existing C&P users group, this may be the way to not only get better rates, but also get broader coverage with a financially secure insurance company. For this type of buying to be effective, there must be a reasonable expectation that the insurance company will get a majority of the members enrolled.

The starting point is always the most difficult. The company will not make a commitment to pricing or coverage unless a ruling authority, such as the officers or directors, make a commitment in writing that they have endorsed the program. If the group is a well organized association where they have formed a corporation, the insurance company is more likely to consider the risk more favorably because they would feel there are more controls. For this to work on a national scale, the program would have to be handled through a surplus lines broker who can place insurance business in all states. I have found an underwriter who is willing to take a look at the possibilities. I could administer the program through my office in Washington or California.

Jerry Robillard
Northsound Insurance

Members of Second Wind can get a slightly reduced rate for errors and ommissions insurance via Collector's Risk Insurance Brokerage, Chicago, PH: 312-664-4060. The policy is underwritten by National Casualty Insurance, which has underwritten our policy for past few years via a different broker, but we were able to save $300 by switching to Collector's Risk as a member of Second Wind. Any small amount helps. Our premium had increased by $1100 from 2001 to 2002 for 1 million in coverage, and we needed to take a $5000 deductible for lower premium.

Carolyn Lorence
Core Creative, Inc.