Considerations for Multi-Line Accounts

By Michael Tighe, Assistant Vice President

While many of our multi-line new business accounts are environmental contractors (mostly asbestos abatement/lead/mold), there are other risks that qualify for our multi-line capabilities. We work with many different types of insureds that can qualify for GL/Contractors Pollution/Professional (when applicable), Auto Liability and physical damage, Excess, and Workers Compensation coverage. There are many reasons for an insured to consider purchasing a multi-line insurance product from one carrier:

More comprehensive coverage. Insurance companies usually have more than one policy form available for each risk. They sometimes use an older form with fewer enhancements if they are not terribly excited about the opportunity. On multi line risks insurers may be more likely to enhance the Pollution policy to include contractors yard, disposal, Over the Road Pollution, and separate Defense coverage. They may also provide broader blanket additional insured wording to include primary/noncontributory with direct notices of cancellation.

Pricing considerations. We often see underwriters win accounts when we can write three or four lines of coverage with the same company. It has been our experience that multi-line solutions have better renewal retentions. As a result, our markets work hard to win this business in an effort to make them a long-term client. Since the primary GL/Package is written on surplus lines paper, they have more flexibility to cut rate. The same goes for the Excess Liability.

Adverse risk selection/loss ratio. Many pollution accounts are severity risks, not frequency. If the underwriter suspects a frequency problem, they are more likely to non-renew the account if the insured only has one policy. An underwriter may look more favorably at a new piece of business, especially one with losses, if they are applying for multiple lines of coverage. Also, if the profitability of that class of business is marginal, the company may be more likely to offer a renewal if it’s a multi-line account.

Loss control services. A larger insured may qualify for additional carrier sponsored services including safety consulting, which can help identifying dangerous work practices/equipment and offer safer options. Many insurance companies can provide access to loss control material, such as 24/7 online safety videos, toolbox talk guidelines, slip and fall prevention, and driver safety programs. Many insureds utilize these tools offered by the carrier, qualify for lower rates in using these tools, and become a long term client.

Some of the risks we have had success in writing multi-line accounts include:

  • Tank Contractors – install/clean/removal
  • Waste Water Treatment Operators
  • Contaminated Soil Contractors/Haulers
  • Landfill Contractors/Liners
  • Medical Waste pick up and recycling
  • Environmental Drillers
  • Wetland Contractors/Consultants
  • Various Waste Recyclers
  • Industrial Cleaning Contractors

Recent multi-line accounts we have written:

  • $1.75M Wastewater treatment plant operator purchased GL/CPL/E&O ($1M/$2M), $4M Excess policy, and $1M Workers Compensation policy for a total of $46,650.
  • $5M Soil remediation contractor GL/CPL ($1M/$2M), $10M Excess, and $1M CSL Auto for a total of $203,621.
  • $5.6M Analytical testing lab purchased GL/CPL/EIL/E&O ($1M/$2M) and a $1M Excess policy for a total of $14,300.
  • $220k Mold remediation contractor purchased GL/CPL/E&O/Mold ($1M/$2M) for $2,500.

Offering a multi-line program to your insureds can bring several advantages, including comprehensive coverage, simplified claims handling, loss control services, and generally a more streamlined process. For more information on multi-line accounts or to discuss specific opportunities, contact us.