Commitment to Continued Education

Please join us in commending three members of our Socius team…

Patrick Hanley, Kirk Denebeim and Kevin Kershisnik were recently recognized for their continued support of the South Bay Chapter of National Association of Insurance Women’s (NAIW) continuing education program.

For a complete list of the recently named California NAWI Honorees, please visit: “Calif. Women’s Insurance Group Names Award-Winners

For more information about Socuis’ commitment to Continued Education please visit our website.

 

Latin for Partnership. Your Success is Our Success.

Socius’ Collegial Atmosphere

 Socius prides ourselves on our collegial atmosphere,  offering competitive benefits, offsite company volunteer activities and an employee wellness program.

Recently, Socius has enhanced our efforts to combine philanthropy with workplace wellness by joining the Plus 3 Network.  This web and mobile portal motivates people by converting every healthy activity they complete into a charitable donation.  Participants are able to choose a company sponsored nonprofit, log workouts and volunteer time on +3 Network interface, and receive validation for their efforts by making a charitable contribution.  With 15 of Socius’ employees currently participating, the +3 Network is providing a wonderful opportunity for our members to improve both personal and community well-being!

It’s our hope that programs like +3 Network will only enhance Socius’ faculties, and ability to provide our clients with a unique combination of experience, enthusiasm and ingenuity in evaluating and negotiating their insurance needs. To learn more about our distinctive business philosophy, please contact our Socius Headquarters at 415- 778-0310, or visit us online at:  www.socuisinsurance.com.

Latin for Partnership. Your Success is Our Success. 

Hardening Management Liability Market for Privately-Held, California-Domiciled Companies—Fact or Fiction?

The Hardening Management Liability Market for Privately-Held, California-Domiciled Companies—Fact or Fiction?

The past 12 months have seen several management liability insurance (MLI) carriers shift their underwriting appetite/guidelines for their privately-held California insureds. These changes include some combination of one or more of the following:

• Increased rates

• Increased retentions

• Reductions in coverage

• Reductions in total limits offered

• Reductions or removal of wage and hour defense cost sub-limits

• Non-renewal of certain insureds, typically based upon industry or asset size of the risk

For the past few years, there has been a surplus of capacity from hungry MLI carriers to “pick up the slack” and write these accounts at attractive rates and terms. While there are still numerous other MLI carriers with significant capacity that will entertain MLI accounts in California, the marketplace appears to be reaching a point where this capacity will no longer be utilized to offer terms we have been accustomed to seeing in recent years. All of this begs the question, “Why is this happening?” Based on our conversations with many of the MLI carriers in this niche, here are a few of the reasons given:

• Poor economic conditions over the past 2 – 3 years leading to a significant spike in the numbers of EPL related claims

• EPL claims expenses rising dramatically year over year (remember these policies cover defense costs)

• Wage and Hour claims being far more prevalent than initially anticipated

• Significant uptick in D&O claims from assorted types of allegations (such as: bankruptcy-related allegations, breach of contract, intellectual property and restraint of trade type allegations)

• Duty to defend nature of the policies forcing carries to provide defense costs coverage for otherwise excluded allegations

So-what can our current (and new) California-domiciled privately-held management liability insureds expect as a result of all of the above commentary? Our recommendation is to set expectations as follows:

• Expect increases in retentions and premiums.

• Smaller clients may need to absorb bigger increases (percentage wise) in premium and retention, although in many situations, their incumbent carrier will still be the best option if the increases are not significant.

• Expect a reasonable degree of competition/capacity to still be available for the larger management liability clients, which can help mitigate increases in premium and retention

• Defense costs coverage for wage and hour claims will be even more difficult to obtain, and when available, possibly more expensive to purchase and with possibly higher retentions.

• Non-renewals by some carriers, based primarily upon class of business. Some of these classes of business include:

• Real estate accounts

• Healthcare accounts

• Restaurant / retail

While we are not yet ready to label the California MLI marketplace as “hard,” it certainly seems to be in transition, and that transition can be accurately described as “firming.” We’ll have to see how things develop during the coming months, but as mentioned above, we strongly recommend preparing your clients, as many will begin seeing changes to their MLI programs at renewal in the near term.

As always, please don’t hesitate to contact your local Socius representative for further details related to appetite changes of any specific management liability markets.

Paul Lefcourt

Management Liability Practice Leader

Socius Insurance Services, Inc.

www.sociusinsurance.com

Latin for Partnership. Your Success is Our Success.