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... University faculty provides an example of what you might see more of in the months to come. Can the expiration of a lease trigger the end of a Business Income (BI) claim? We have a retail client who had a location at the World Trade Center in New York. His lease technically expired on 12/31/01. Even if he wanted to, there is no lease available to sign, and probably won't be for some time. Prior to 9/11, he had every intention to renew the lease, and also was planning to extend his space. The insurance company has frozen any further claim payments because they have found out about the lease expiration. Additionally, the company has had all inventory taken from this store, but they have not yet paid any salvage because they have not yet been paid.’ This also seems ludicrous. What do you think? ' You don't want to know what our faculty members think about this claim as presented. However, below are their comments, edited as a matter of public decency. FACULTY RESPONSE NO. 1 Assuming ISO forms, neither of these situations makes sense. Expiration of a lease has nothing to do with BI recovery. The end of a lease does not end BI recovery absolutely, and salvage is something a company seeks after they make payment as called for in the policy. FACULTY RESPONSE NO. 2 No, there's nothing in the policy that says the expiration of a lease causes a BI claim to halt. Is the company using Special Exclusion 4(b ) in the Special Cause of Loss ...

Salvaging Clients/Prospects In A Stagnant Economy
SALVAGING CLIENTS/PROSPECTS IN A STAGNANT ECO...

... Computer Crisis Management game' techniques Game simulations Actual field exercises In selecting training topics and educational methods to be used, emphasis must be placed on appropriateness for the staff involved and the identified needs of the organization. Training in areas where there is little or no likelihood of occurrence should be minimal. 13.5 Crisis Management Education Topics A typical continuing education plan for the Crisis Management Committee and Emergency Response Team should encompass the following training topics: Crisis Training Topics Evacuation procedures Medical emergencies Search and rescue Fire suppression methods Automatic sprinkler emergencies operations Control of automatic sprinkler system water supply and risers Earthquake preparation and/or simulated emergencies Structural collapse and/or earthquake Hazardous materials management Communications systems and alternatives Crisis management policy and authority Primary and secondary command posts Operation of emergency equipment Computer center failure and/or damage emergencies Salvage operations - prevention and recovery Protection of vital records Electric power failure emergencies Electric power service control Control of water, natural gas and other utilities Flooding emergencies Severe weather Bomb threats or explosions 13.6 Crisis Management Resources The type and extent of crisis management resources that should be maintained varies widely. Modifying the extent of supplies are factors involving life load, earthquake exposure, severe weather, and high rise building locations and remote or isolated facilities. Occupational Health and Safety Act (OSHA) requirements regarding emergency equipment and first aid supplies should be considered to be an absolute minimum code. In the anticipated likelihood of failure of the fire department and paramedics to respond due to an earthquake or other natural disaster, the Emergency Response Team most likely will need a broader selection and quantity of first aid equipment. Normally ...

... formulation, implementation and on-going maintenance. At the time of a crisis, the ultimate success of the Crisis Management Plan is dependent upon the effectiveness of the strategic planning which has been completed during this time period. 7.6 During Crisis Timing This time segment is relatively brief and addresses only action necessary during the actual crisis occurrence. This involves immediate action by the Emergency Response Team and Crisis Management Committee. The plans for anticipated crises must involve pre-determination of sequential task actions, establishment of priorities and delegation of authority. At the time of a crisis occurrence, Crisis Management Plan policies and operational procedures should immediately implemented. To be successful, the control of a crisis involves a logical sequence of activities with pre-determined priorities. 7.7 Immediately following Crisis Timing The post-crisis period is of relatively short duration and includes initial salvage operations, containment of loss and evaluation of the situation. Recovery plan assessment considerations, include, but are not limited to impact on staff, operating status, third party exposures, claim value and recovery considerations. During the relatively brief time period following a crisis, a preliminary assessment of the existing situation should be completed; the crisis media and public relations strategy should be implemented and decisions concerning contingency plan implementation for as alternate locations and resources should be acted upon. 7.8 Post Crisis Timing The final time segment in the crisis management strategy possibly involves a period of several years depending upon loss magnitude, extent of asset loss and litigation concerning subrogation opportunities and activities. This segment concerns possible activation of alternate locations contingency plans as well as operations during the recovery period. The primary termination of the ...

... that are certified and under contract to perform repairs according to strict industry standards. FPG routinely performs quality audits with customers and unannounced on-site inspections of the shops. Any shops not meeting the company's performance guidelines are dropped from the network. The company is able to improve quality and reduce claims costs in several ways. The company electronically accesses digital photos and appraisals of auto damage directly from the body shops. FPG then validates the appraisals using industry-standard appraisal- and repair-estimating software. Discrepancies are resolved on the spot. The repair is scheduled, and all service arrangements are made for the insured. Once the repair is completed, inspections are performed to ensure quality. Payment is made to FPG, which then pays the body shop after deducting a small processing fee. FPG's organization includes a special subrogation and salvage division, which ensures capture of all available claims dollars. The company's tight estimating and quality-control process results in repair cost reductions of 10% to 30% (compared against industry averages) . In addition, the repair cycle is significantly reduced, thus saving rental fees and reducing customer inconvenience. For self-insured fleets, there's no insurance company involvement throughout this service cycle. Does FPG achieve the same results working with insurance companies? Yes, but it takes the insured's cooperation. In most states, insurance companies are not permitted to require use of a particular shop. That choice is left to the insured. Consequently, FPG must convince the insured to use one of its shops. This happens about 30% of the time, and when it does, results are the same as for self-insured ...

... for eliciting good suggestions. Here's what I found really works: Before an agency-wide or brokerage meeting, ask all employees to come with one written suggestion on how office efficiency might be improved. It's that simple! You will be amazed at the practical suggestions that are offered. Another time try asking for two ideas on how employees' particular jobs can be made easier. The agency meeting that follows then provides a good opportunity to discuss some of these suggestions and how they can be put into practice. Suggestions that are not immediately usable should also be mentioned to the group with an explanation of why they cannot be used at the present time. This way appreciation is shown for all employee efforts. In fact, sometimes a discussion ensues among the employees on how the initially rejected idea can be salvaged. At various meetings, suggestions can be called for on ways to improve customer service, to streamline a particular office procedure, to better utilize the automation system, or improve the sales process. To show that you really value employee viewpoints, you may choose to offer an incentive for participating in this project - such as a lunch certificate. This is not necessary, however. Once employees see that their ideas are considered seriously, that in itself motivates them to conscientiously offer their observations. Whether or not you offer incentives, try soliciting your employees' opinions as a means of continually improving your operations. Login or Register (for FREE) to gain access to thousands of other great articles. Need more reasons to join? Need insurance for you, your business or your family? ...

... because you have been able to observe their work habits and knowledge first hand. When setting goals and detailing the action plan, however, your personal experience with the person may be a hindrance. You may be tempted to gear the objective to what they have been able to accomplish in the past. Forget about what has (or has not) happened and focus the goal setting on what you would expect a new employee with the same level of education and experience to accomplish. This process will provide both the agency and the producer with the opportunity to make a fresh start. The agency's lackadaisical approach to sales management may have been a major cause of the producer's failure to produce as well as you both had hoped. By providing the direction and guidance now, you may be able to salvage this person's potential and turn him or her into a more valuable member of the team. At the very least, you will be setting up a program that will allow you to fairly and legally rid the agency of costly dead wood. An integral part of the new relationship with the producers will be the agency's specific definition of what it wants producers to sell since it makes sense to have them concentrate on accounts that they have a good chance of attracting and retaining. This means that you have to review the current appetites of the major carriers and decide whether the producer should be a generalist or whether he or she should specialize in a certain type or size of account or in a particular line of business. It is important to consider the producer's own experience and desires, but the ...

... complete most actuarial analyses: Historical first dollar loss experience displayed in a triangular format whose corners are incurred losses, paid losses, and claim counts. Further divisions may include pure loss/ALAE, indemnity/medical, bodily injury/property damage, and total counts (including those with only costs) . For Workers Compensation, a breakdown of losses by state is necessary because of the varying state benefit levels. A current loss run on tape, diskette, or hard copy. Your exposure to loss such as payroll, sales and number of vehicles for all completed and projected policy periods. Policy periods for which data is available. Per-occurrence and aggregate limitations for all policy periods. Information on whether allocated loss adjustment expenses are included within or are in addition to the loss limitation. Indicate whether salvage and subrogation have an impact on losses. ARE THERE WAYS TO SAVE TIME AND MONEY? Planning ahead is the most effective way to minimize the cost of any actuarial project. The following items should be considered as early in the process as possible: If a presentation is required, decide early in the project to minimize travel expenses. You may accomplish a significant portion of the project over the phone (which is a money saver), but do not discount the value of a face-to-face meeting when the results need to be distributed to several people. Coordinate with the data provider to streamline the process. Provide as much data at the start of the project as possible. Even if the project is months away, initiate the data-gathering process as soon as it becomes feasible. Offer multi-year contracts ...

... morning of potential producers met during the previous week. For every producer hired through this program, the referring agent would get 10% of first-year commissions. Your competitors can also provide you with sales recruits. In many cases, successful producers with other agencies may be dissatisfied with their current situation and looking for an opportunity to reach their full potential. There may be legal problems if the producer's current employer is located in the same area, particularly if he or she entered a covenant not to compete. Even if there is no covenant, some agencies are reluctant to create ill-will by hiring a producer from a competitor. However, if there are no legal or social obstacles, dissatisfied producers from another agency could make ideal candidates. As a rule, though, you should be wary of attempting to salvage producers who have not succeeded in other agencies, since it is difficult to ascertain the reasons for their ineffectiveness. The same warning applies to walk-in recruits. Insurance companies have traditionally been a major source of producer recruits. Many agencies prefer to hire company people because of their technical knowledge and the image they project, even though they are not usually trained in sales. Since the companies are such a well-mined source, an innovative approach is needed to get their attention. Show your company contact the job description. Then ask for the name of the one person inside or outside the company who would best fit that position. Stress that this person has probably never told anyone that he or she is looking for a job. The specific job description and the focus on one person should make it ...

... and Health insurance involves Errors & Omissions exposures that require special guidelines. "I've heard I should do business only with insured agents or subproducers. Why?" It's prudent to do business with individuals who consider E&O important because they're generally more professional in their understanding of protecting business and personal assets. If they're concerned enough about errors to buy E&O , they're probably also implementing stronger in-house controls to prevent such errors. Few agents buy E&O as a safety net for recklessness. Second, in the event of a claim, your E&O will be less impacted if there's another carrier to share in the losses. Errors do happen, and if you suffer a claim with a valued agent who has collectible insurance, chances are your relationship with this agent will be salvaged. If the agent has to pocket the claim, they might go out of business or at odds with the agency. Also, you don't want to be in a position of being the "deep pocket" if one of your subproducers is uninsured, especially if that producer has provided you with very little business. "What do I do if I'm sued?" First, consider any demand for payment a claim. Don't wait until you receive a court summons and complaint to contact your E&O carrier. Any delay on your part in advising the carrier, which places the carrier in a less advantageous position and, perhaps jeopardizes their rights, can possibly nullify your policy. If your policy deductible doesn't apply to defense, placing your carrier on notice won't cost you anything. ...