Miscellaneous E&O: Does Any Business NOT Need It?

2008 International Conference

Golden Opportunities or Fool’s Gold? • November 5-7, 2008 • San Francisco

Miscellaneous E&O:Does Any Business NOT Need It?

MODERATOR: Stephen Marcellino, Esq., Partner, Wilson Elser Moskowitz Edelman & Dicker LLP

PANELISTS:Chris Christian, CIC, RPLU, Vice President, Senior Broker, U.S. Risk Financial Services, Inc. Ann Marie Marson, JD, RPLU, Chief Claims Officer, Senior Vice President, James River Insurance CompanySonia Odarczenko, Esq., Claims Manager, Markel

Nicholas Taube, CPCU Vice President, Maxum Specialty Insurance Group

Miscellaneous E&O: Does Any Business NOT Need It?

Overview

• Why Now?

• Policyholders

• Agents/Brokers

• Carriers

• Claims

• Where Do We Go From Here?

• Q&A

Why Now?

• Rapid Growth of Need for MiscellaneousE&O Insurance

• Challenging Litigation Environment

• Change in Market Economy: Shift to Service Economy Resulting in Damages for Financial Losses Rather Than Traditional “BI” or “PD”

• GL Carriers Becoming More Sophisticated in Their Coverage Analysis

Why Now?

• Additional Capacity Provides Incentive to Look For New Deployment Avenues

• Savvy End-Users Want to See E&O Coverage in Place for Their Vendors

• More Sophisticated Insureds Recognize the Need for Coverage and Push to Obtain the Coverage

Policyholders

• Why the Need for More Than CGL Coverage?

• Lack of Familiarity With or Understanding of Coverage

• Selecting the Right Coverage (Claim Frequency)

• Reasons Why Coverage Might be Denied– Claims-made issues– Exhaustion of claims based on frequency

Agents/Brokers

• Agents Must Think in Terms of “What’s the Worst That Could Happen?”

• Underwriters’ Responses Vary Broadly

• Agents’ E&O Exposure

Carriers

• What are the Expectations?

• What do They do?

• For Whom do They do it?

• How Much of it do They do?

• What are Their Qualifications?

• Past Claims and Potential Claims?

Claims

• Understanding E&O Exposures

• Retention of External Parties with Required Expertise in Defending Claims

• Understand Other Coverages Might Apply to Situation

• Conflict with CGL Policy - Occurrence vs. Claims Made

- Contingent BI/PD vs. Direct Coverage

Where Do We Go From Here?

• More Carriers Are Offering E&O Coverages

• More Choices for Different Types of Coverages

• Identifying Non-Traditional Exposures

• Knowing How and Where to Obtain the Coverage

• Increased Disputes with Other Insurers

Q & A

Many Thanks to

• Stephen Marcellino, Esq.

• Chris Christian, CIC, RPLU

• Ann Marie Marson, JD, RPLU

• Sonia Odarczenko, Esq.

• Nicholas Taube, CPCU