Looking Ahead: There’s Always Time for Good Risk Management


Being aware of the risks of weak insurers means reviewing that possibility with clients, with fellow agency and brokerage personnel and then documenting interactions.


Now is the time to be making sure that you have the appropriate coverage and the appropriate relationships both with your key underwriters and your brokers and taking advantage of it. Robert Sargent, Mercator Pro


Panelists offered a variety of viewpoints on how to avoid the entanglements of impairment, including:


• Agents and brokers should review their policies to identify potential problems with insolvency;


• Company offi cers or directors who may be drawn into impairment-related litigation should review their D&O coverage, particularly to determine if they have Side-A coverage, which helps cover directors and offi cers when their companies are unable or not permitted to do so, Mark Keenan said.


• Those obtaining E&O should get to know their underwriters in order to obtain the most appropriate coverage available.


• Clients and producers should also engage in “scenario testing” to determine how they would respond in the event of an insolvency or D&O claim, Tracy Forst said.


• Agents and brokers should remain aware that placing business with unrated or lower-rated carriers carries additional risks to the insured and to themselves, Robert Sargent said.


• Everyone, including policyholders and producers, should practice good risk management by studying their exposures and determining


how they will continue to run the business. • Agents and brokers should document all advice to clients.


This interactive white paper is based on a webinar that was presented on July 1, 2010. Watch the full event at: http://www.ambest.com/ impairment10.


Copyright © 2010 by A.M. Best Company, Inc. All rights reserved. No part of this report may be reproduced, stored in a retrieval system or transmitted in any form or by any means; electronic, mechanical, photocopying, recording or otherwise.


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