New EPLI Claim Ruling, CRC Group Benchmarking Tool, Construction State of the Market

that. But some insurance not told about this and they later find out that there was potential for coverage. You know there's going to be unhappy clients about being upfront with the insurance and explaining to them that the market has changed the path to being able to get a rate reduction or flat renewals is gone. We're not in that market space anymore.

Brian, the reason we're talking today is because there's a great story in our new tools and Intel newsletter where you utilize one of our great tools here at CRC group. It's the trucking bench marking tool and he used it to help one of your clients. Can you tell us a little bit more about how you use this tool and what kind of difference that made for your clients?

And in order to help kind of paint the picture for our client, we use the trucking bench marking tool to demonstrate, you know, Hey, here's where your peer group is at. Here's what they buy currently you are under-insured based on what the data reflects. And even though the pricing increases that you're seeing on the expiring limits are the way that they're at, it still makes sense in this day and age to increase your limit and by the additional limits. So I mean, we use this on a daily basis.

It's super powerful with our clients in showcasing what we use with our data. So this was like you said, a nice little success story with the increased limit.

And so for us, anytime we can provide our retail agents with an additional tool to help selling the face of a challenging marketplace is a huge thumbs up and a , a huge value add for not only for our retailers but for the buyers themselves. So we found it to be terrific to , to utilize just on almost every single individual account that we place.

And we found that that data, the purchasing decisions can be analyzed using a number of different factors including number of power units, the types of vehicles and other factors like loss history. , we know that insureds in this area can often under purchase. So we knew this was an important tool to help them effectively animal analyze their risk profile and protect their balance sheet .

We also know that it's important to be able for our retailers to be able to communicate this message to the insured effectively. And so we have designed the benchmark to be in a very slick, clear format and we believe we've accomplished that with our current bench marking report. I'd also like to note that the current bench marking report can be delivered with a number of other tools that we've created at CRC.

In particular, we have a trucking proposal docent that can capture a number of different , components that a retailer may want to share with an insured. And they can also download a lot of original content that we've developed on the major industries going on in the trucking industry right now. Particularly in instances where retailers concerned that the insured may be under insured.

We've analyzed the trends and claims settlements in the industry and provided a number of very useful claims, examples that we think our retailers can share with insured . And to be honest, this isn't just a trucking, we've created various tools, many of the tools I just talked about for a number of other products that we felt really require that extra analysis. And we're continuing to build that out.

But I can tell you right now, we have many of those tools available in the construction industry private and nonprofit this type of product and also many lines of coverage. And to back up one more step, I will tell you that our cyber bench marking is unique in the industry because it doesn't just analyze what others are buying. It's actually analyzing what the loss results may be based on the number of records, the size of the insured.

, so that gives an insured the opportunity to really know what their exposure is, not just what others are buying because again, cyber like trucking is an industry where often insureds are under insured. , so that's a little bit about what we do for bench marking for truckers and the tools that we have available for all of our brokers.

So it's relatively straight forward, there's not a whole lot , a lot of nuance to it and it only takes one to two minutes to generate. So altogether it's very user

friendly, easy to crank out whenever that data is compiled in and utilized.

So we're talking about this EPLI claim ruling previously denied claims may now be covered and this is all stemming from a case in California. It is the Southern pizza company case. And Jason, can you, can you give us a little more information about exactly what happened with the appeals court and what this means for everybody?

And so this is really kind of shaken an already tough market in California with respect to EPL and can be interested in to see where this, where this goes.

, the other interesting issue is we're seeing the social justice notion creep into situations in which juries are awarding amounts that may not be due, but because they feel like the person who is owed the money, the values of these claims have gone up. But in this case, and this is only California paper company case , we have already been made aware of three denied claims that have now been re submitted to the carriers based on this ruling.

So if someone had previously had a claim, denied under the ways an hour or had their claims sublimited under the wage and hour supplement there , they can resubmit and technically take off the supplement . Right? Because this is something that doesn't fall in the problem and this account that could allow the complete policy to the access for the defense costs .

And then the other issue would be that they can now in the cases where they were outright denied, go back and say, well, losing doesn't apply to this part of this claim. That has to do with the unreimbursed business expenses. So this is basically causing carriers to have to open their policy back up. And what we think is , is actually make payments now for claims that had already been resolved. I think it's going to be a, a steaming event for some EPL cases in California.

And I think that's what retail needs to do is do a review of their past EPL claims and see if there's opportunities to now go back and get coverage for these types of points . And I think they're going to have to do that because it's an insurance not told about this and they later find out that there was potential for coverage. Then I think you know there's going to be potentially an unhappy client.

team at CRC. You can find that in the on the website and you can certainly call any one of us if you need help in looking at a previous claim.

Andy and Jeff Dunn who is senior vice president and a broker managing a large book of commercial construction business out of CRCs Atlanta office. So we've got kind of both coasts going here. We've got Woodland Hills out West, we've got Atlanta to the East and we're here talking about CRC group's recent article for the States of the market. So the construction industry seems to be booming right now. However, our article talks about some emerging trends that are creating some real challenges.

What are you guys seeing in trending in the construction industry right now? As far as, as far as E&S insurance goes,

They're seeing unprecedented amount of claims where there's going higher and higher larger settlements. So where, you know , the first 10 million used to be a working layer, now they're seeing claims that all attachments , so they hadn't been able to effectively charge the right rate for the limits exposed. So they're reducing their limits, exposed to help control their exposure. In the past they would give you a 20 million, 25 million for 50 grand for that same 2000 per mil .

They'd rather do you 15 million in limits for 30 grand.

But what we're seeing now is we're seeing these construction defect claims carry over into the States that were considered non CD States and we're getting big payouts . We're seeing, you know, Georgia just had one. So we're seeing the market's pulled back on a lot of these States that were historically a easy state to write in because they're seeing a lot of the severity claims in the CD States carry over to either neighboring States or other [inaudible] States.

It just for an example, Florida the last two years is really turned into a really tough CD state. It's really kind of followed the tracks with , with California in a lot of ways. Two years back we could write a lot of project specific accounts in Florida. Now a lot of these carriers have pulled back and they're only willing to write wrap-ups in Florida because they don't trust the, you know, insurance programs of all these different subcontractors.

So it's gotten a lot tougher in many States across the country, just not the CD States .

And the other part about it is the primary, they're still exposed and largely the same ways where a $2 million claim is going to be a $2 million claim, they're going to be a 2 million. Either way. Where it's really changed is that stuff that the Xs thought would settle for 2 million now settling for 5 million, something they thought was going for 5 million , not one per 15. So the access has been much harder hit by these more severe losses than the primary has.

Yeah. And the excess , obviously the also has to deal with the auto exposure and, and that is just gotten super, super tough. , like Andy was saying, you know, accounts that we'd use one or two carriers. We're now having to utilize five or six carriers just to fill the brella. And we have seen a huge influx to be creative on some of these accounts.

We've, we've been writing a ton of the auto buffers, you know, putting up a one or $2 million auto only over over a contractor that might have a large you know , fleet of units so that the standards can come back in and , and, you know, fill the capacity. I think the other part about that is that if we had to fill out a a hundred million dollar tower, we had five carriers. They liked that risk. They gave us great pricing.

But now instead of, you're going to have 25 million people are giving us 15 now, those six , seventh, and eight carriers that weren't competitive last year, but they were willing to look at it. We're having to reapproach them this year and say, Hey, we actually need your limits now. But there's telling me, I suppose they're giving us those limits at a much higher price.

So it's driving that excess pricing because we're having to incorporate other carriers that weren't competitive in the past just to fill out $100 million tower. Absolutely.

You're , we're, we're working on , we did a placement in , we have a large utility company, utility contractor and that comes up in April and we put together large limit without too much trouble. We use all the cures we could, but we put together a big tower. By June we were putting together another tower for utility contractor specifically doing work for, so Cal Edison and that tower took , there was very limited capacity.

There was one reinsurer that was willing to back up our reinsure the roof and they both to our domestic carriers wanted to both use that one.

You can do something perfectly to spec to what the utility company is requiring, but you'll still get tagged in the claim and it doesn't even matter if the work you performed was involved in it. The cost of defense is so high that they're just cares or just tendering limits. Yeah . It's almost like the action over exclusion in New York and we're seeing wildfire on just about every construction account. Every risk we see there, they're putting on a wildfire exclusion.

I would actually argue that wildfire is a tougher risk than New York because there's one in New York, there's case law and so the carriers understand the history of it and building one single claim it . And so yeah, some of the coins for 20 million now where it was going for 10 last year, but with wildfire there is no cap on the amount of limits you're going to pay because it's multiple claimants and there is no, there truly is no defense.

And so they're really taking a hard look at what true trimmers , utility contractors, their processes involved and the the ones that are best in class. I have a better chance of getting capacity than putting together necklace placement. But it's very expensive and it's very, very limited market doesn't go together quickly. Yeah , it's an interesting time.

You know, a lot of our, you know, a lot of our retailers, best of class accounts have really the last 10 years they've gone through all these different renewalscycles and made out really well with the flat, you know, flat rate or decrease. But we're now, we're seeing even the best in class contractors, they're being hit with some sizable rate increases.

You know, especially on theon the excess side because of the feeling I got from the underwriters last week with that best in class contractors are probably looking at 10 to 20% increase and one cup of Mexico's losses. You could be looking at 40, 50 to 100% rate increase. And then the one caveat on that where they were saying New York contractors, you cannot get enough money to get as much money as you can because the risk is so high there and the claims are going so high.

But it truly is a hard market where they can charge whatever premi they want. Yeah . We have a sizable book of New York, a New York city contractors from bridge painting contractors to scaffolding to crane accounts. And it's a voyage. It's unbelievable. I mean it's , there's literally a, on some of these classes of business, only one or two markets willing to put up limits and, you know, we're trying to get, stay, you know, stay on top of the curve.

We have a best of class scaffolding contractor that weyou know, we decided months earlier to have them jp on a plane and come out to Atlanta to meet withour underwriters just to do the due diligenceto, you know, help, help save the rate on the account. We're seeing limits severely cut on the New York contractors.

You know , we have many with, you know, 10 million brella limits and it's, it's becoming difficult to even build up to 5 million limits in , in a lot of these, a lot of these limits are going for premi for limits, basically million dollar premi per million dollar limits.

And I'd also say it's about being upfront with the retail , with the insurance and explaining to them that the market has changed the path of being able to get a rate reduction or flat renewals is gone. We're not in that market space anymore and we've changed to being more at the mercy or carriers than we ever have been in the past.

, you know, I, I can say I, I like to joke, I've waited my whole life for a market like this, butI would recommend that our retail partners, you know, really choose their wholesale relationships, you know, wisely and really team up, you know, really team up with each other, put together, spent a lot of time on your submissions and, and controls and put a phenomenal submission together and, you know, work with work with a wholesaler who has deep relationships with their markets andyou know, get

out ahead of things, you know, months ahead of time and, and if at all possible, get your insured in front of the underwriters. Atlanta , you know , has, has grown to probably be the one of the largest ENS market places in the country from a carrier standpoint.

We're wrecking the carriers , recognize us as a partner, so we're getting, our submissions are getting a better look and a quicker look than I think a lot of smaller, more regional wholesalers. You know, we have a national relationship with these large carriers.

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