Umbrella Insurance Renewal Squeezed in New York Market

habitat forces have recently been reported that are holding back the resumption umbrella insurance policies – Today’s tough insurance market, the withdrawal of many insurance companies from the New York market and more thorough due diligence by insurance companies on customers before renewing umbrella policies. It all adds up to an imperfect storm for councils of cooperatives and apartments. Today the broker offers an alternative:

Just a few years ago, co-op and condo boards could easily be obtained 100 million dollars umbrella insurance policy and payment 1200 US dollars Premium Insurance – Valuable insurance if the claim is not covered by the board’s general liability, workers’ compensation, or directors and officers policy. Those days are long gone and it is unlikely that they will ever return.

There are a number of reasons for this, but social inflation played a big role in the changes. Juries award higher payouts to plaintiffs, costing insurance companies more money in claims. Some carriers were not profitable or not as profitable as they would have liked, so they left the umbrella market. This puts a strain on the insurance industry as brokers scramble to find replacement policies for their clients. With only a few viable options, carriers are overwhelmed with supply and doing their best to meet demand. However, not every account will meet the underwriting requirements of other carriers. This leaves boards with even fewer options. Premiums can reach US$25,000 For 5 million dollars limit!

An umbrella policy is ideal, but it is not always an option. The next best option is excess liability policy.

What is the difference between an umbrella policy and an excess liability policy? A well-written, separate umbrella policy will sit on top of the main general liability policy, the directors and officers policy, and the workers’ compensation policy. On the other hand, an excess liability policy typically operates on top of just the basic general liability policy. This leaves the board with only that D&O limit (usually 1 million dollars in coverage) and no additional liability insurance beyond that. One option is to ask 2 million dollars Limit your D&O policy, but not all carriers offer this.

To make things even more confusing, not all umbrella policies will cover all three insurances mentioned above at the same time. More and more parcel carriers are beginning to offer an umbrella or excess liability policy in addition to their property and liability package, and more often than not, when a parcel carrier offers an umbrella policy, then that umbrella will not lie over the D&O and workers’ compensation policy.

In light of all this, it is vital that your insurance broker reviews your policies and options with you annually. If you live in one of the five boroughs of New York City and need an umbrella policy, it is imperative that your building be cleared of any Buildings Department or Housing Preservation and Development violations. Umbrella carriers take this into account when writing a policy and will refuse to offer coverage where certain irregularities exist. They will also take into account the client’s opinion claims history.

No matter where you live, umbrella carriers are becoming more and more concerned about the age and condition of your building. They want to see new roofs, updated plumbing and electrical systems. In today’s tough insurance market, it is critical to maintain and support your building and the various operating systems within it.

Eric Eggert is a consultant to an insurance brokerage company Macoul Risk Solutions.