CONTRACTORS PROFESSIONAL AND POLLUTION LIABILITY MARKET UPDATE

Transcription

1 WORKSHOP M7 Monday, November 9 1:30 p.m. 2:45 p.m. 3:15 p.m. 4:30 p.m. CONTRACTORS PROFESSIONAL AND POLLUTION LIABILITY MARKET UPDATE Presented by Jeff Slivka Chief Operating Officer/Executive Vice President Construction Practice Leader New Day Underwriting Managers LLC Workshop M7 Contractors professional and contractors pollution liability insurance is still a developing market. Although these policies have been around for a couple of decades, it takes time for the market to mature and become stable. Get a glimpse into recent trends and developments in this growing and important construction insurance marketplace, including newly identified exposures, the growth in mitigation coverage, availability of desirable coverage enhancements, and recent entries and exits from the market. To print on both sides of the page, set your printer for duplex printing. Copyright 2015 International Risk Management Institute, Inc. 1

2 Expert Advice. Smart Solutions. Knowledgeable Professional Responsive When it comes to construction related professional liability and environmental insurance, New Day Underwriting can help you find optimal solutions that are efficient, effective and economical. With a dedicated team armed with state-of-the-art technology, our comprehensive products are negotiated to meet your insured s specific needs, while keeping current industry issues top-of-mind. Best of all, our First Class Service includes single-point access to risk management guidance and insurance products from the nation s leading carriers. Think of us as your specialty resource to help you protect your clients businesses. New Day Underwriting Managers LLC info@newdayunderwriting.com newdayunderwriting.com Tel: Knowledgeable Professional Responsive

3 Jeff Slivka Chief Operating Officer/Executive Vice President Construction Practice Leader New Day Underwriting Managers LLC As chief operating officer/executive vice president and Construction Practice leader at New Day Underwriting Managers LLC, Mr. Slivka assists in establishing the strategic direction and vision for the company. His expertise includes construction-related professional liability insurance, environmental insurance, and risk management services associated with each. Mr. Slivka spent nearly 25 years developing his expertise at major brokers and insurers, including Aon, Arthur J. Gallagher, and ECS, Inc./XL Environmental. Mr. Slivka serves as an active member on industry-related committees and organizations, including the Associated General Contractors of America s National Risk Management and Environmental Committees and the Construction Financial Management Association. He is an Expert Commentator for IRMI.com, contributing articles on design liability and environmental issues, and is a frequent speaker at numerous industry events. Mr. Slivka received a bachelor of science degree in geology from Bloomsburg University of Pennsylvania. He holds the Associate in Risk Management (ARM) designation and the Construction Risk and Insurance Specialist (CRIS) certification. Workshop M7 3

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5 Contractors Professional and Pollution Liability Market Update Presented By: Jeff Slivka Executive VP/Chief Operating Officer New Day Underwriting Managers Agenda Product Overview Environmental Liability Products Professional Liability Products Marketplace Product Trends Workshop M7 2 5

6 Environmental Products 3 Environmental Products Contractors Pollution Liability Product Overview /- Jobsite coverage 2000 Transportation coverage NODS /- Premises coverage (aka site coverage) 2009 Disposal liability coverage ERC Jobsite Premises 2010 Emergency response costs 4 Trans 6

7 Environmental Products Contractors Pollution Liability Premises Coverage Headache! S/A/G for offsite pollution with retro dates Insured s Location S/A/G for off/on site pollution with retro dates What about tanks?! 5 Marketplace Environmental Products Contractors Pollution Liability 40+ carriers offering CPL $500M Market Capacity/$50M single carrier $400M premium volume Top carriers Workshop M7 6 7

8 Product Trends Marketplace expansion Rates/pricing Capacity Buying Motivators Claims Coverage Expansion Environmental Products Contractors Pollution Liability 7 Environmental Products Contractors Pollution Liability 8 Coverage Expansion Occurrence trigger Defense outside LOL Unscheduled Insured s premises Blanket NODS Expanded definition of Pollution Conditions Completed operations period for project policy - 10 years Supplemental coverages Transition to combined CPL/Professional Liability 8

9 Pollution Legal Liability 9 Environmental Products Pollution Legal Liability TRANS NODS Pre-existing Conditions Workshop M7 New Conditions 3 rd Party Liability Onsite Clean Up 10 9

10 Environmental Products Pollution Legal Liability Marketplace 20+ Carriers $300M Capacity $700M Premium Volume 11 Product Trends Marketplace expansion Rates/pricing Capacity Buying motivators Coverage expansion Environmental Products Pollution Legal Liability 12 10

11 Environmental Products Pollution Legal Liability 13 Coverage Expansion Long term policies Defense costs in addition to LOL Disinfection/Evacuation Expense Contingent business interruption coverage Biological Hazards coverage Occurrence Non Owned Disposal Site coverage Unscheduled Insured locations Expanded definition of Pollution Conditions Supplemental coverages Construction Related Professional Liability Products Workshop M

12 Product Overview Construction Related Professional Liability Products 15 Damages resulting from acts, errors and omissions in their performance of professional services CPrL Product Variations General Structure of CPrL Liability coverage Protective coverage Rectification/Mitigation coverage Variations based on carrier Protective Indemnity Construction Related Professional Liability Products Fairly similar from carrier to carrier MIRs no longer being applied Easy to acquire Be careful of limitations of liability 16 12

13 Protective vs. Rectification DP PL via Subrogation 5M 5M Total Damages Protective 4M 3M Total 4M Damages 3M Rectification 2M 2M MIR SIR DP/PL Insurance ($2M Limit) 1M 1M SIR Construction Related Professional Liability Products Rectification/Mitigation Coverage Be careful what you are buying Rectification = pays for remedy for the design error Mitigation = pays for prevention of further damage There are exceptions but understand what you are buying! Workshop M7 1 13

14 Construction Related Professional Liability Products Marketplace 25+ carriers $200M Market Capacity/$25M single carrier $500M+ premium volume 19 Construction Related Professional Liability Products 20 Product Trends Marketplace expansion Rates/pricing Capacity Buying motivators Claims Increasing year over year Impact of rectification coverage Trends in late reporting Tighter underwriting Coverage expansion 14

15 Construction Related Professional Liability Products 21 Contractors Professional Liability or CPrL New and improved forms Definition of professional services Non-negligence based triggers Rectification/Mitigation becoming commonplace Supplemental coverages Transition from CPL to combined PL/Professional liability Project coverage All over the board Limited number of markets Expensive Extended Reporting Periods expanding Owners Protective Professional Insurance (OPPI) Workshop M

16 Product Overview Construction Related Professional Liability Products - OPPI 23 Alternative to project professional liability for design team Two Coverage Parts Protective Indemnity Defense for third party claims General Structure of Owners Protective Excess/DIC Insurance SIRs MIRs Blanket or project specific structure Construction Related Professional Liability Products - OPPI Marketplace About 6 carriers $100+ Market Capacity/$25M single carrier Policy forms are fairly consistent Premium volume 24 16

17 Construction Related Professional Liability Products - OPPI Product Trends Marketplace expansion Rates/pricing Capacity Claims Coverage expansion 25 Construction Related Professional Liability Products - OPPI 26 Coverage Expansion New and improved forms ERPs expanding Expansion for developing project delivery methods Design/build Developers Project driven but blanket available Excess CPL options PLL options Workshop M7 17

18 Questions Jeff Slivka Executive VP/Chief Operating Officer New Day Underwriting Managers LLC ext

19 To enter the drawing for $500, affix your personal bar code label here or complete this evaluation online. M7. Contractors Professional and Pollution Liability Market Update Rating scale for all questions: 4 = Excellent 3 = Very Good 2 = Average 1 = Somewhat Disappointing 0 = Very Disappointing Overall rating for this workshop? Jeff Slivka Preparation and quality of information Energy and enthusiasm of delivery Educational focus (not a sales pitch) Comments: