Title Agents and Abstractors are required to carry professional liability insurance to protect against errors and omissions. Structuring an insurance program to cover the title agency, it's employees and contractors is a difficult endeavor. On top of this industry has been shunned by most commercial insurance markets as the losses from the recent housing downturn continue to materialize. This article provides an overview of the things title agencies that can do to present their organization in the best light to underwriters and drive the best premiums possible.
Since claims from the housing crisis started piling up several large insurers, including Chubb and Philadelphia, have filed out of writing E & O insurance for title agents. The remaining carriers have mostly raised rates or determined to exclude coverage for claims from past events. Although this is bad news, the worst is behind us. The title agencies who have survived are the best of the best and can be seen as preferred risks.
The first thing that can be done to present your organization in the best light is to address any past issues. If an agency has had claims, even if there were no payments, a full write up of the issues at hand and what has been done to prevent them from occurring in the future is ideal. Looking at the issues objectively and putting in place risk management controls to prevent the acquisitions in the future will show underwriters that your organization is a good E & O risk.
The most important thing for structuring a deal is the professional liability submission. A good and experienced broker can help present your exposures in the best light. Completing a full application and signing it is the cornerstone of the submission, no questions should be left blank and any questions should be discussed with your broker. Including business plans, policies and procedures, résumés of key personnel and organizational charts are also helpful. The insurance companies also expect to see "loss runs" from your past insurance companies showing proof of your claims history, your broker can help compile these documents.
A final point is the value of having an experienced broker with direct market relations. Many general insurance agents use a secondary "wholesale" insurance broker to contact underwriters, this type of arrangement doubles the commission built into the policy and also advances direct negotiations with the underwriters. Specialist brokers can access underwriters without a middleman, which always results in a better deal. As title agents know, insurance is a relationship business and personal connections get deals done.
Putting together a comprehensive submission and having a specialist broker approach professional liability underwriters is the best way to drive a low cost, broad coverage, sustainable insurance program for your agency. The worst of the housing crisis is behind us and now is the time to update your insurance program. The title agencies and abstractors who have survived the crisis in tact have the best prospects at capturing market share when the market turns. Putting in place the cleanest and broadest E & O coverage possible with help you secure favorable contract terms.