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July 2009 Newsletter

LETTER FROM LANDERS

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So, you know about how we give out coupons for pint of Ben & Jerry’s ice cream? Well, we recently found ourselves with a big old stack of coupons that were about to expire in a couple of weeks. Ben & Jerry’s wouldn’t take them back (thanks, guys) and we certainly couldn’t send them out to our customers, who’d find themselves walking into stores and being told that the coupons were no longer valid. I know! One of our neighbors here in Charlottesville is the Virginia Discovery Museum. It’s a small, but delightful place for little kids (and their parents) to spend a few hours. And who likes ice cream more than little kids? We were able to give the Discovery Museum 150 coupons for free pints of Ben & Jerry’s ice cream and we’re told they were gone within two days. All’s well that ends well.

And, speaking of the Discovery Museum, they sponsor the Discovery Dash every year. It consists of races for kids aged 3 through 12. Among the races are a parent-child relay race and this grandparent thought it would be fun to enter it with his 5 year old granddaughter. The only problem was that I decided that I had to get competitive with parents, who were 30 years my junior. Everything went okay until I got about 30 yards from the finish and lost my balance. I went tumbling and ended up with a fractured collarbone and a cracked rib. Ouch. I don’t know what was hurt more – my aching bones or my pride. The good news is that I’m pretty much healed up and well into training for my fall marathon season. Plans are to run in the Portland, Oregon marathon in October and New York City in November.

Have I mentioned how much I’ve enjoyed getting out and visiting with agents over the past year? Yeah, sometimes I’ll bellyache about the hassles of DC area traffic when I head north, but even that’s not bad as long as I allow enough time so that I don’t have to worry about being late. I’ve had the pleasure of doing business with some of you for over 30 years and it’s a great treat to be able to spend some time re-connecting with old friends. And there’s nothing wrong with making new friends, either. You’ve all been very kind in making me and my colleagues welcome when we visit your offices. Thank you.

DENTAL COSMETIC CARVE-OUT COVERAGE

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Okay, file this under “Obscure Specialty Insurance but Kinda Cool to Know About”. To a great extent, the push for preventative dentistry has proved to be so successful over recent generations that many dentists are now seeking other ways to grow their practice and increase revenues. As a result, many dentists now perform elective cosmetic procedures of all types, including those not typically associated with traditional dentistry. It will come as no surprise to learn that most writers of malpractice liability for dentists are not willing to provide coverage for these plastic surgery exposures.

Our always creative friends at Markel’s Evanston Insurance Company came up with a solution – Dental Cosmetic Carve-Out Coverage. This policy covers dentists for all types of cosmetic procedures, including Botox and dermal fillers. Their policy provides coverage for dentists and oral surgeons performing procedures not covered by their standard professional liability carrier. It includes aesthetic and cosmetic services provided in a dental office and protects employees, such as an aesthetician. Coverage is extended to both the individual dentist and the practice.

Limits of liability up to $1,000,000/3,000,000 are available and minimum premiums start at $2,000. As you’d expect, there’s a specific application required. You can call us or find it on our website.

THE BEST NEST

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With the summer hurricane season upon us, we continue to see more personal lines markets abandoning certain coastal areas, including the Maryland’s Eastern Shore and the Tidewater area of Virginia. This is bringing renewed attention to our facility for placing high valued homes with Chubb in their Masterpiece program. While we can’t provide a market for every homeowner with a coastal exposure, we can be a possible solution for owners of high-valued properties in place like Ocean City, Berlin, Hampton, Norfolk, Portsmouth and Virginia Beach.

Those producers who have been placing personal lines business through the Chubb program know that the Masterpiece product is most attractive to those clients with primary residences valued at $1,000,000 and higher. Chubb doesn’t choke when there’s more than one comma in the building limit. To the contrary, the higher the limit, the more your customers will appreciate Chubb’s understanding of the particular needs of that market segment. High-valued jewelry and art collections are welcomed, not feared. Auto schedules featuring Rolls-Royces and Ferraris find a welcome home.

You may not be aware of the significant premium credits that are available for superior protection of properties insured under the Masterpiece program. In addition to the credits that you might expect for central station fire and burglar alarms systems, there are further credits for homes within gated communities. When the gated community is protected with a 24-hour patrol service, the credit gets bigger.

Be sure to tell us if your client is eligible for any of these protection credits.

DO IT YOURSELF (OR NOT)

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We’ve got a bit of a test project going on. Did you know that you can go to our website, landersunderwriting.com, and get quotes on-line? It’s true. We’re beta-testing the system and limiting it to just a few lines of business: Personal Umbrella, Special Events and Non-Profit Directors & Officers Liability. It should be easy to navigate and the goal is to make things quick and simple for our producers. But, that’s the point of the test project. We’d like to know what you think. Which means we hope that you’ll try it.

Just go to our website and click on the “Get Quote” icon in the upper left corner of the page. Follow the instructions from there. Tell us about your experience – good or bad. That feedback will let us know if there are things that we need to fix. Or if we should expand the project. Or abandon the project.

Of course, if you just don’t care to use the on-line quoting system, that’s okay, too. Make the phone call. Mail the application, Fax the application. Email the application. Whatever works for you is fine with us.

WHAT’S UP WITH THAT JARGON?

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Minimum & Deposit. What are we saying? This means that the premium is adjustable, based on a number that is subject to change, such as payroll or receipts. It also means that the premium shown is the least amount that will be charged, even if the rating basis is less than estimated. The audit is a one-way street, in that the insured could be charged additional premium, but won’t get anything back. That’s something you’ll want to make crystal clear to your clients up-front.

Fully earned. Once the policy becomes effective, there will be no return premium allowed, even if the policy is cancelled on a mid-term basis. Most typically, surplus lines companies will make their premiums fully earned if coverage is being written on a short-term basis or if the exposure is seasonal in nature. For example, somebody writing liability coverage on a boat-rental business might write the policy on an annual basis, but insist upon a fully earned premium because the bulk of the exposure is concentrated in a very brief time span.

Sometimes, you’ll see a premium being described as “25% fully earned” or “50% fully earned”. In these cases, a percentage of the total premium would be retained by the company in the event of cancellation.

We’ll always provide written quotations telling you about any fully earned policy provisions. We count on you to pass that information along to your insureds and any premium finance companies that may be involved with an account.

PARTY ON

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Summer always seems to bring on lots of special events. Concerts, athletic events and festivals are going full bore. We’ve always maintained a market for liability coverage for these short-term events. Not unsurprisingly, cold liquid refreshment of the adults-only variety is part of the attraction on a hot summer’s afternoon. In those cases, liquor liability exposures present themselves and we’re capable of providing that coverage, in addition to the general liability.

As with everything else we underwrite, the key to placing coverage for liquor liability on special events is good risk management. For example, lots of these events feature kegs of beer. When the brew is flowing freely from the tap, trouble can ensue. Our market’s guidelines for kegs usually allows for self-service at events with up to 100 people. Once attendance gets over 100, we’ll want to see volunteers doing the pouring and monitoring things. That’ll work until attendance exceeds 2,500. At that point, arrangements will need to be made to have a professional bartender on hand to serve the beer.

Some examples of special events that we see include wine festivals, races, car shows, conventions and trade shows, political events, charity fund-raisers, parades, picnics, weddings and receptions. Products coverage is included for food and beverages that are sold. Volunteers, temporary workers and committee members may be included as insureds. Venues can be additional insureds.

We’ve got specific applications for special events that are available at landersunderwriting.com. You can submit it to us, or get the quote on-line directly from the website.

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