Writing a Successful Account: It All Starts with the Application

By Carter McAuley, Brokerage Service Manager

When quoting or binding a pollution policy, the process begins with the application. The application provides the underwriter with a full picture of the account, what the exposures are, and allows the broker and underwriter to understand the insured’s business. It’s important to have a clear understanding of what the carrier is looking for and having an accurate application will help to get the best terms and pricing for your client.

Some of the most important pieces of information an application can include:

Named Insured and related entities

If a company has operated/operates under another name or has subsidiary or parent companies that need to be included as additional named insureds, it is critical to list those on the application. This can help ensure that the policy takes into account any operations performed by these entities, any additional revenues from these entities, and helps to protect the insured against claims naming these entities.

Operations and revenues

A clear and accurate breakout of operations and the projected revenues for each allows the underwriter to properly assess the risk and exposures. Most Contractors Pollution Liability policies are rated based on revenues, so an accurate revenue projection is important.

Prior coverage & retroactive dates

If a company has had prior coverage, it is critical to include any information about coverages and retroactive dates. Without a clear understanding of the program in place, a carrier cannot match or improve coverages, and retroactive dates may be missed or advanced. This may not only lead to a gap in coverage for the insured, but also an errors and omissions claim.

Claims history

In addition to noting any claims, which would also appear on loss runs or a loss history, an applicant can also disclose any incidents that the insured feels might give rise to a claim. Failure to accurately reveal claims history or potential claims can be a material misrepresentation which can negate coverage or result in a policy cancellation or non-renewal.

Warranty statements & signature

While many E&S carriers can quote with an application that is unsigned, a signed application is an important part of a complete underwriting file. Applications contain warranty statements that ask the insured to affirm that all the information contained in the application is accurate and complete to the best of the insured’s knowledge. Warranty statements also are an agreement to abide by the conditions of the policy. Incorrect information can be considered a material misrepresentation of the risk and can result in coverage being denied.

Applications may seem like a burden, but they provide your insurance carrier with a much clearer picture of the risk. The information helps to assure that your insured will get the coverage that best addresses their exposures and also that there are no surprises if there is a claim.

For information about submission requirements or to request an application, please contact us.