California Business and commercial insurance trends as I see the California Insurance Market evolve from the perspective of a independent California commercial insurance broker. Industries I have clients in include non-profits, manufacturing, commercial property owners, technology and software to name a few. I'll be discussing the trends in California Workers Compensation, Property Insurance, E&O, Errors and omissions, Directors and officers, D&O, EPLI, and other coverages
This is a synopsis of a recent California Manufacturing client we helped reduce their insurance costs and greatly improve the coverage on their commercial insurance package. They had been with their previous commercial insurance broker for about 5 years and wanted to know if we could help them with their commercial insurance. We evaluated their current policy and exposed a number of issues, the primary one being they were ineligible for the Business Owner Policy they had been on for the past 5 years. The business owner policy that they had was limited to companies with revenue of $15 million or less which they had long ago surpassed. Just two years ago they had revenues of $63 million so they had out grown this policy, which had its limits to begin with, and now this policy was not anything close to what hey truly needed as a mid-market company. By not correctly reporting a clients income year after year this broker has established a trend of unethical behavior and perhaps opened the client up to a material misrepresentation or breach or contract. They could be denied coverage if a claim were to occur.
We structured a comprehensive insurance program for the insured with Chubb and actually reduced their costs from their previous policy while broadening their coverage in a program they could grow into up to revenues of $50 million. The previous insurer was a great A rated insurance company but once we correctly reported the clients business personal property, sales, and insurance coverage needs they were no longer competitive. The new policy program covered their products and completed operations for world wide sales and provided coverage for their true exposures and provided a business income coverage.
Summary:
The main outcome from this case was a program that provided the correct coverage and did not contain any material misrepresentations which could cause claims to be denied. The net saving on the commercial insurancepackage was also realized and it ended up being about 10%, however we found Ocean Marine and Inland Transit coverage that was 40% less than what was being offered by the incumbent insurance carrier.
