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Distilling Claims Information Informs the Negotiation

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Distilling claims information informs the negotiation

When you work as an insurance broker, you sometimes are asked to place accounts that have already been considered and turned down by many carriers. When this happens, you rely on creative thinking, special knowledge and teamwork to fill a client’s protection needs—or so Drew Dean, Underwriter at Burns & Wilcox of Indianapolis and Christian Hamlin, Professional and Management Liability Broker at Burns & Wilcox of Los Angeles, recently demonstrated.

In this case the client, a college-services organization that helps match students with appropriate colleges, had been sued by a similar organization with a similar name. The charge was infringement of intellectual property, one of the more complex areas of law. Though the lawsuit had been settled and the college-services organization’s legal issues resolved, this company had filed other claims as well, and its current insurer was unwilling to continue to write the client’s professional liability coverage. With nonrenewal assured and the current broker unable to find a market for this less-than-perfect risk, the retail agent turned to Dean.

Dean brought the account to six carriers without success. “I was thinking I was dead in the water,” said Dean, noting the checkered claims history was on top of a business operation that some carriers try to avoid because the risks are not always clear. Then he reached out for assistance from his colleague across the country.

Hamlin reviewed more than 100 pages of litigation documents to choose the most important pieces of information for the underwriters, including the settlement terms. He then negotiated with various markets that specialize in cyber and technology placements. SafeOnline, a specialized Lloyd’s market managed by an MGA, wrote the E&O coverage on a claims-made basis, while also backdating the prior-acts coverage almost a month to the Sept. 15, 2009 expiration date of the old occurrence policy and avoiding a coverage gap.

“Distilling an organization’s claims information to provide underwriters with pertinent information about the nature of its litigations and settlement amounts is something I do regularly for underwriters because nothing is ever cut and dry,” Hamlin said. “The information can be skewed, so it’s important to point out both sides of a claim” to help the carrier make a fact-based decision. This practice also helps establish and cement good relationships.

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