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California Warehousing & Distribution Business Owner did not renew CGL $1M coverage policy. He states due to loss of major account which affected cash flow...couldn't continue to pay premium at renewal. Uninsured for 46 days so far. Initial phone discussion w/owner states no losses EVER & cash flow is better. Would appreciate an underwriter's opinion & suggestions if you've had success with what is best approach for narrative. What is best way to approach underwriter with past problem & provisions made for further avoidance of cash flow risk? Your help is highly appreciated.

Perhaps you can place future expected premium payments (anticipated renewal premium and/or max potential A/P if swing plan) in a premium trust account w/ insurer as the beneficiary. That way, underwriter always has the option / ability to draw on the Trust to fund the premium, if not paid timely by insured.

In the absence of a draw-down (i.e., the client pays the premium timely), the Trust pays the current amount of investment income to client (so this has no negative effect on their income statement ... income from investing activities not disrupted).

If program is cancelled, then Trust corpus would revert back to insured ... who could use it to collateralize their next program (if that is still an issue then).

Regards,

Thank You.