East side, west side, all around the town ...

Rough Notes, Mar 1994 by Stewart, Robert L

Public entity property, general liability and commercial auto, public official, law enforcement and school board liability, 9-1-1 errors and omissions and trash haulers.

Above are listed a few coverages that only a few years ago could strike fear in the hearts of even the boldest of agents and brokers. But now, program administrators representing sound, A-rated markets are not only accepting this business, they are seeking it aggressively, bidding for it and providing excellent coverage, with sufficient limits at affordable rates.

And if that isn't enough, umbrella and/or excess coverage over professional liability, errors and omissions, auto or general liability limits, is available.

Sound improbable? Well, if you've been out of the municipal crunch for awhile, stay tuned. How about CGL policies available to public entities on blanket reporting forms? How about coverage for everything sponsored by a township from carnivals to (gulp!) fireworks displays?! (There, we've said it.)

And now for something really out of Never-Never Land or Brigadoon (the town that comes alive only once every century): With properly filed applications, most quotes from at least one organization will be provided within seven business days.

It begins to sound like a return to the "anything goes" underwriting of yesteryear, and those who have continued to read to this point are probably waiting for "the catch"--the other shoe to drop. Well, our job is not to analyze, merely to report on, coverages available and available markets. You can make the judgment yourselves, but here is the information we have as reported by one program administrator--James W. Chapman, president of Go-Pro, headquartered in Richmond, Virginia. (1-800-368-3583). They also have an office in San Antonio, Texas.

Chapman has provided only one "legal hedge." The descriptions he provided Rough Notes are "limited to brief highlights of coverages. They are not intended," he said, "to be comprehensive." Chapman also noted that not all coverages are available in all states.

To give you an overview of what coverages and limits Go-Pro makes available for municipalities and related entities, the accompanying chart is provided. In an interview with Jim Chapman, he offered some additional information which we also provide following the chart.

There you have the "short of it." However, the "long of it" is not discouraging, either. In fact, in researching what is "available out there," the general feeling is that the "underwriter cramps" of a decade ago have subsided substantially. Or, as Phil Zinkewicz, president of National Insurance News Service (NINS) in New York, states: "Insurers are retrenching from the traditional 'bread and butter' business--homeowners insurance in particular--and are looking to replace lost premium volume with other specialty lines business; municipalities are therefore benefiting."

In the earlier discussion with Jim Chapman of Go-Pro, he elaborated on the municipal coverages being provided. On the subject of public entity general liability, he said that "a wide range of endorsements are available under our program."

He cited owners contractors protective and employee benefits coverage and said "Coverage is also available for most municipally-run exposures: dams, bridges, streets (with no mileage limit), waterfronts, golf courses, recreation programs, utilities, landfills, wharfs and marinas."

On public entity property coverage, Chapman said "Basic or broad form coverage is available, written on a specific or blanket basis." Also available: agreed amount endorsement, inflation guard, replacement cost and-if you're ready for this-earthquake, flood, builders risk, business income and extra expense. He added "We also can make available certain inland marine coverages such as fine arts and computer equipment protection, as well as several forms of crime coverage-from disappearance to employee dishonesty."

In discussing public entity commercial auto, Chapman pointed out that comprehensive physical damage or "specified causes" can be covered. "We also have excess liability available, on either an umbrella or following form basis, with limits up to $4 million." Then he added, "Actually, depending upon the risk, even higher limits might be made available."

Clearly, you haven't the reading power (nor have we the space) to examine all of the details here. But, basically, from the information that has been made available to our research team, the days of the insurance industry forcing municipalities into self insuring and into risk retention groups seems, for the time being, at least, to be over.

Phil Zinkewicz of NINS says, "At least for this cycle, the need within the industry to insure the municipal sector, seems to have become greater than the need to run away." He adds, "At National Insurance News Service, we see, at least temporarily, an interest on the part of insurers to explore new products as they continue to lose--or give away--marketshare in traditional business."