CGL Insurance - How Many Agents Really Don't Understand Coverages

[UpstateNYAgent]

Im just curious and I got a feeling this will be a question for more experienced agents really. Im working with a NFP organisation in my home town. I wrote them a CGL policy because they wanted a policy to protect the directors and officers. Later they are asking about a D & O policy and for some reason are under the assumption that this is the only thing that covers them.

I told them the coverages provided under and CGL policy protects the board against claims for BI and PD. Where as a D&O protects the directors and officers against claims for non bodily injury. Such as if a board member runs off with some money the board is protected for things like that. Also under a D&O there is a employee liability policy that goes hand in hand with a d&o to protect against claims made for harrasment and discrimination.

What really bothers me about this is where do they get their information from? How many agents out there are just saying its covered because they don't know the answer. Everytime I tell them what is and whats not covered they act all shocked about it and then they tell me "Well with this NFP they are protected from ......"

Another instance where this is springing up is when it comes to fundraisers they want to have that take place off of the premises. I tell them that the CGL policy does not protect against unschedualed events. I tell them to schdual it, its going to be around 150 dollars. Then they give me paperwork where the city wants to be listed as an additional insured. I do it and it costs $100 dollars. I did some looking around and its hard to find an insurer that will actually extend coverages for all unschedualed events. I look around online even at carriers I cannot use. Im pretty good at finding a good market for my insureds.

Basically all the while is how many agents out there really know what the hell their talking about. Ive been doing this for about three years and I study it pretty extensivily. Trying to learn what I can. Then when I give the answer and tell them what isn't covered I get crucified for it.

To make matters better im also a board member and do care about this NFP. Their young and new. They have some money but not much. So even though I do make more money the higher the premium I don't want to bury them alive in premium.

Ive seen a fair amount of claims from other agencies where things are not covered and then it becomes some big law suit. Even though it the odds of something happening at something like a "Bake Sale" are slim to none and agents know that. Its just not ethical to tell them it is (even though i think so many agents do) But when you try to do the right thing you get hammered with questions because some agent who's been doing it for a lot longer probably doesn't know what their doing but made it this far because nothing ever happened.

Im not sure what my question is. Just wondering if any seasoned agents have any input on this. Thanks

 

[OCinsurance]

Generally speaking, based on the type of industry, I present a variety of policies to clients, such as D&O, EPLI and D&O. It's often difficut because clients do not always want to pay for the coverages that they need because they think that they just need GL policies to cover them.

I bring up EPLi, D&O, and Crime policies all the time. Some clients won't even listen when I mention professional laibility insurance, but I bring it to their attention as crucial.

 

[TiredAgent]

I think most agents who are in the business for the long run such as yourself will have basic understanding of the coverages and limitations.

But as you say "Well with this NFP they are protected from...." may be your insured talking with another non-insurance person at the other NFP.

I run into this all the time when a prospect would say, "well my friend/uncle Joe/barber says its covered". I would ask is your friend a licensed insurance professional? If he is you should buy the policy from him because mine won't.

As OCinsurance says offer them the options, it'll be up to your insured to buy them. But document document and document their declination.

 

[UpstateNYAgent]

Thanks for responding to my little rant. I guess another thing i wonder about is how many commercial agents out there that are successful don't really know what the hell their talking about? Sometimes I get that impression from agents who have years under their belt.

 

[saieddie]

Its not easy being the smartest agent in town. You should do the more experienced agents a favor and call them to explain what the policies they are selling do and do not cover.

 

[Soaringagent]

That's good that you listen to the clients needs and provide them with all of their options.

 

[UpstateNYAgent]

Yeah generally when I hear "This is covered under our other policy" from someone who is also on some nfp im assuming its coming from another agent. Sometimes I think that maybe Im the one doing something wrong because im not as experienced as the others. But once I actually do more research on it I can't help but wonder that maybe im the one doing it right and their doing it wrong.

Sometimes I feel that even though I try to do the best I can for my clients and I tell them what is and what isnt covered. Maybe I should of just wrote them the most extensive policy I could find, and then just tell them everything is covered because their agent is too lazy to read the policy. It seems thats what some other agents in my area do. Insure them to the max (so they think) let them think that they are actually covered for everything because the odd's of a claim are so low.

I work pretty hard at understanding the coverages and find it very frustrating when the people doing this who are making a lot more then I am are just writing what they think is total protection and just letting the client think their protected from everything are better off.

I wonder if this is why people hate insurance. If its really the agents fault that insurance is hated like it is. Because agents out there are writting policies that they don't even understand.

 

[Matt B]

I find most folks in the industry who have had success understand the pitfalls or benefits of any policy. The folks just looking at $ signs will absolutely say anything to get paid. When you think about it the CG0001 has 4 parts and doesn't cover near what people think it does or need. Its application works well in some areas of biz though not others. Insurance is really getting treated as a commodity these days. Spend plenty of time asking questions then giving explanation.

 

[kristophmarsh]

Sure, there are some advisors out there who are a little sloppy. Unfortunately, there's not too much we can do about it. There will always be a few bad eggs. Badmouthing their work doesn't do anyone much good either. So it seems that it's just an issue we all need to tackle one client at a time.

I think it really shows the importance of developing long-standing relationships with your clients and being more than just a salesman. It doesn't take much more effort to provide holistic advice on all things risk management, and in the end your clients will love you for it.

While we spend a lot of time understanding the ins and outs of different products, from a client's perspective, insurance is only a very small part (important, nevertheless) of their business. They've got a lot of things to worry about - their own customers, employees, financial reporting, shareholders, legal and compliance issues - and considering that, our job is to make their life easier.

What a lot of advisors don't completely grasp is that they are just as important as any doctor, lawyer, accountant or engineer. We help our clients identify risks that could potentially threaten their livelihood and arrange insurances to mitigate the impacts. They look to us as subject matter experts and come claim time our guidance can be invaluable. If it's done right you'll have a client for life.

If you employ staff, it also shows the importance of continued professional development, especially in policy classes that are a little trickier, such as financial lines coverages (of which D&O is a part of). There is a lot to get your head around, and a lot that can go wrong if you don't know what you're doing.

Finally, I think something that doesn't get touched on enough is setting expectations. When engaging with your client, in my experience it makes a hell of a difference to set modest expectations. Don't promise the world and be transparent with what solutions you can provide. By working together you'll accomplish a better result, have a happier client, and spend much less time putting out fires.