Engineer - E&O and GL

[Rob]

I have an Engineering firm I've insured for last couple of years. Revenues increasing each year, last year was 1.4 million. Insured with CNA on both E&O and GL. Both forms are very broad. CNA provides a blanket a/i on their GL form, including prod/comp ops coverage extended to the a/i and blanket waiver of subrogation. However, they will not provide the GL without purchasing the E&O. Last years premium was $28K for E&O portion. This year increasing to $50K. Other E&O carriers have indicated $25K. They provide services to condo builders by the way. Problem is other GL carriers (including Hartford) will not provide the a/i's needed by one of their developers (per project agg, a/i including prod/comp ops, etc).

Just looking for some other ideas for the GL portion OR if you would leave it alone and sell the higher price. There are several advantages to the E&O form.

Thanks

Rob

[LadyBroker]

Most of their exposure is in the E & O. Is it that you feel the E & O is too expensive? If CNA is willing to write this, allowing new Condo construction.....it's a no-brainer....bind it and do the victory dance.

[Rob]

I just want to be sure I'm not overlooking an alternative that is just as good and perhaps a bit less especially since expiring is only $28 and we're going up to $49K. I didn't feel it was a no brainer because I've been indicated by another carrier at $25K. So yes the E&O is their main exposure, however getting the GL with the proper endorsements is difficult.

I do love the victory dance on each bind though.

[LadyBroker]

This account does new Condo construction. I don't really think you are going to find multiple markets willing to cover that on an E & O side...and even if you do, I could not believe you would find anyone else who could give you the CG2010 11/85 additional insured endorsement that you are saying CNA is giving you. No one is giving that for new condo work...so unless you have another market who can do the GL with the same broad terms, you don't have a choice from where I sit. Unless the client is willing to sacrifice coverage for price. And if you do that, be sure you get it all in writing....

Good luck.

[E&S Man]

if the other carriers are not able to offer the form required, then it doesn't really matter what their premium is.

As an underwriter, I get really tired of agents calling me and throwing cheaper quotes in my face when they don't offer the same coverage.

IF the CNA deal is the only one that offers the coverage you need, then it's the better deal. As a matter of fact, it's the only deal.

[jtabosida]

I write E&O Insurance for a living in the Real Estate related industries. I am shocked that the CNA E&O policy extends out to claims related to construction. I would double check this if I were you or send the underwriter an email and get an answer in writing. I work with CNA all the time and have never seen such a provision before.

What state are you in? This could explain the reason they are willing to cover E&O claims arising from construction defects. I doubt it though. Be sure you know what your giving them. FYI

[jtabosida]

If the CNA E&O policy is extending out to cover them for the sale of condos they built and constructed, I really doubt it, I would like to see the policy actually, then the premium is very competitive.

Whats the Deductible?
Is the policy through Victor O Schinnerer?

I'm wondering if they are covering the construction defect claims under products & Completed operations. However does that only apply to BI or PD? Sorry for all the reply questions I am trying to get a clear picture on what you have and our offering.

[alardler]

I agree to double check the coverage and be sure your insured is really purchasing what you think it is.

As for E&O quotes, have you tried St. Paul Travelers? They have a dedicated A&E unit in their Hunt Valley, MD office and write country-wide. Call Lee Genecki at 443-353-2256.

Travelers may be able to write the GL through their Select unit.

Worth a shot!

[CATHIEA]

I would never shop the CNA E&O policy for an engineer involved in construction especially new multi unit. For those who haven't writen one of these, this is the best policy regardless of the cost. I can feel for you but unless you can match the coverage (good luck) your client should be writing that check and saying thank you. We've never lost one of these because of price after we explained the coverages.

[Rob]

I write E&O Insurance for a living in the Real Estate related industries. I am shocked that the CNA E&O policy extends out to claims related to construction. I would double check this if I were you or send the underwriter an email and get an answer in writing. I work with CNA all the time and have never seen such a provision before.

What state are you in? This could explain the reason they are willing to cover E&O claims arising from construction defects. I doubt it though. Be sure you know what your giving them. FYI

I'm not sure where you got the impression that the E&O policy extends coverage for construction defects as I don't believe I stated that. I did say their CGL policy gives the developers (their clients) coverage which includes products/completed operations.

[Rob]

if the other carriers are not able to offer the form required, then it doesn't really matter what their premium is.

As an underwriter, I get really tired of agents calling me and throwing cheaper quotes in my face when they don't offer the same coverage.

IF the CNA deal is the only one that offers the coverage you need, then it's the better deal. As a matter of fact, it's the only deal.

I agree 100%. The question is: Is CNA the only one? I think CATHIEA may have confirmed that it is.

[Rob]

I would never shop the CNA E&O policy for an engineer involved in construction especially new multi unit. For those who haven't writen one of these, this is the best policy regardless of the cost. I can feel for you but unless you can match the coverage (good luck) your client should be writing that check and saying thank you. We've never lost one of these because of price after we explained the coverages.

Thanks Cathiea, that is what I thought. I have prepared the client to expect an increase and reiterated that it is the cadillac policy and that other options lead us to losing the GL which does provide the endorsements needed by their clients.

[Rob]

If the CNA E&O policy is extending out to cover them for the sale of condos they built and constructed, I really doubt it, I would like to see the policy actually, then the premium is very competitive.

Whats the Deductible?
Is the policy through Victor O Schinnerer?

I'm wondering if they are covering the construction defect claims under products & Completed operations. However does that only apply to BI or PD? Sorry for all the reply questions I am trying to get a clear picture on what you have and our offering.

Deductible on the E&O is $10,000. The GL a/i endorsement includes prod/comp ops. Remember they aren't actaully building and constructing, they are only providing the civil engineering services for the builders.

Thank you all for the replies!

[LadyBroker]

Yes, agree that your firm is not actually building the condos. However, they are involved in the construction of the condos, as they provide the engineering and drawings.

But that's not really my point...my point is that if your client's work in any way touches a Condo project, your policy must allow it. If not, and this is what I think people forget, if the claim itself would not be covered, neither would the DEFENSE of the claim...that's right, those pesky legal bills are all on your insured...and won't he be happy about that?

As a wholesale broker, I hear this line all the time...'my client doesn't ever build a house, but if he did, he would pay the claim himself if it's not covered'. They don't ever stop and think that the CD process can be so long and time consuming, and how much an attorney costs by the hour.

I know the theme of the responses has been Stay with CNA, and I can't agree more. Good luck.

[Rob]

Yes, agree that your firm is not actually building the condos. However, they are involved in the construction of the condos, as they provide the engineering and drawings.

But that's not really my point...my point is that if your client's work in any way touches a Condo project, your policy must allow it. If not, and this is what I think people forget, if the claim itself would not be covered, neither would the DEFENSE of the claim...that's right, those pesky legal bills are all on your insured...and won't he be happy about that?

As a wholesale broker, I hear this line all the time...'my client doesn't ever build a house, but if he did, he would pay the claim himself if it's not covered'. They don't ever stop and think that the CD process can be so long and time consuming, and how much an attorney costs by the hour.

I know the theme of the responses has been Stay with CNA, and I can't agree more. Good luck.

Yes, In fact last year we had to complete a condo questionnaire.

Thanks!