By Brett Amick, Assistant Vice President
We recently worked on an account for a refinery and industrial contractor that does new construction and maintenance contracts. They average about $12,000,000 in field payroll a year. The agent on this account has controlled the account for over 30 years and, for the most part, the loss history has always been good until recently. The insured’s insurance needs are a $1,000,000/$2,000,000 primary General Liability policy, including broad form Contractors Pollution Liability as well as a $10,000,000 Follow Form Excess liability policy.
The issues on this account began two years ago when the insured suffered a fatality loss about eight months into the policy term. The person killed had broken a number of OSHA rules; ultimately he was killed when he got wedged in between two pieces of industrial equipment. Beacon Hill Associates has written the account for a number of years and the account had been with the same carrier for the last two years. As we all know, placing coverage on an account with a death loss can be tricky, but with a second fatality seven months after the first one, this risk became even more difficult to write.
Both of these losses became action over claims. In the first one, the insured had to contractually cover the general contractor in the suit and the company paid the loss of around $1,000,000. For the second one, there were several entities to subrogate against, so in the end the company paid out around $250,000. After the first fatality, the incumbent carrier decided to non-renew the account. Beacon Hill Associates moved the account to a new carrier for an increase in premium, but was able to secure all the same coverages that had been in the previous policy. With the second fatality it became important to start the renewal process very early and working with the incumbent carrier to convince them that it made sense to stay on the account.
After several conference calls and face to face meetings with the underwriter, claims adjuster, and the regional manager, the incumbent carrier agreed to renew the account. The company’s deciding factor was based on the fact that the fatality was not something the insured could have foreseen or done anything to have prevented the loss. Beacon Hill Associates, with the help of the carrier, was even able to broaden the coverage a little by adding asbestos coverage and giving the insured a per project aggregate.We were able to renew the entire account with only a 19% increase in rate. The willingness of the company to work with the insured to make this happen is just one of the reasons why Beacon Hill is so selective in choosing carriers that will work on hard to place risks and stick with them when things get tough.