Risk & Business

General liability policies that insure businesses have many exclusions in the contract. One of those exclusions that has recently been talked about in the media is "intentional acts". The recent Freeh report regarding the Penn State sexual abuse scandal, brought to light the intentional cover up by the administration during the time the abuse was occurring. Now the question is will Penn State's liability policy cover the lawsuits that are being brought against the school? The insurance company that covers the school says no, citing the exclusion of "intentional acts . This is certainly going to cause a legal battle between two big institutions ,  that will surely set the precedent on how general liability policies will respond in the future. Until next time be careful out there and know your risks. G. Kevin Nemith.  President CNC Insurance Assoc. business insurance and small business insurance specialists. Risk Management Consultant serving Delaware, Maryland, Penns

Business insurance has always had the focus on price and product. Anyone who has had to pay for the high cost of business insurance every year had no choice but to focus on these two items. Change is occurring however. Technology has made business insurance products and price very similiar between companies but risk management services are now becoming the defining feature. The trouble that insurance companies are having however is they cannot do a solid job at it. In other words business owners are getting "risk management light" because the insurance company business model just does not have the expense covered in their margins. Enter the insurance broker, who insurance companies are looking at to cover these services. Brokers ,like the insurance companies are trying to find a way to pay for giving risk services to clients. So how is something so important in today's business climate going to get accomplished when there is no money set aside to do it. My thought is comp

Lexus Nexus insurance exchange gives business insurance agents and brokers a new tool to submit their clients insurance needs to the marketplace. Business insurance has always been a little behind other industries in technology, but now the industry is carching up. I would imagine that other vendors will follow suit. Until next time be careful out there and know your risks. K

I was thinking the other day about the health mandate and how it compares to the state mandate with auto insurance. Every state mandates by law for individuals to buy auto insurance for the common good. With these statues on the books, the growth of online buying of auto insurance has exploaded. Folks can buy auto insurance without the help of an agent. The mandate forces buyers to the front door of insurance companies. Insurers do not need agents to "rustle" up the business and sell it. So as the studies show, agents are becoming less and less important in the buying decisions of auto insurance. Now comes Obama Care with a fresh supreme court "ok" on the mandate and I am wondering what is going to happen to agents. My prediction is we will see the same trend as auto insurance buying. The health mandate will force buyers to the doors of insurance companies via the exchanges and no agents will be needed to produce the business.  Agents will also be forced out of the

Insurance consultant Chris Bursnd had a nice article in the Insurance Journal about producer compensation. Chris outlined how agencies will not be able to keep the same compensation packages as in the past. In order to stay viable business insurance agencies will have to pay producers less and producers are going to have to produce more. Sounds somewhat depressing right? Well I think Chris is correct as I live this every day. Insurance carriers are reducing commissions and the margins for profitability are slight. Producers will have to be paid less and they will have to prOduce more. The questions arise around how much "extras" do agencies have to proVide to give the value added service that clients expect, and how much do you charge for the services. This is the miliion dollar question that business insurance agency owners will have to figure out very quickly. Until next time be careful out there and know your risks. K