ExecutivePerils Launches Package for Diverse Real Estate Companies

PRODUCT: RE360

COMPANY: ExecutivePerils

BEST RATING: A+ (Superior), size XV

AVAILABILITY: Coverage is available on an open-brokerage basis.

FOCUS: Historically, the real estate industry has been divided into silos: separate firms for sales, escrow, titling, appraisal, property management, syndication and more. But recently, in order to retain clients and increase market share, real estate companies have started diversifying, opting instead to offer all services under one roof.

In response, ExecutivePerils developed RE360: an affordable package policy for real estate professionals. “It’s comprehensive—you don’t have to go out and buy five or six policies, and it’s one application, one premium, one renewal date, one carrier, one underwriter,” says Peter R. Taffae, managing director of ExecutivePerils. “We’re the only ones that can do all this in one policy.”

RE360 encompasses five coverage categories: directors & officers, with reputational management coverage; employment practices, including coverage for tenant and client discrimination; real estate errors & omissions, including coverage for real estate sales E&O, escrow E&O, mortgage brokers E&O, property managers E&O, property developer E&O, lockbox, title agents E&O, auctioneers E&O, leasing agents E&O and appraisers malpractice; fiduciary liability; and cyber/privacy.

“When you go out and buy five policies, you have five limits, but you also have five primary premiums,” Taffae points out. “We put it in one basket with one limit. The limit can be as high as you want, but it’s much less expensive. It’s a better value.”

Consider a firm that sells real estate, leases commercial buildings, manages and develops properties, and also does syndication. According to Taffae, “normally if you want syndication coverage, you have to go to the diversified financial market, and they’re really set up for larger syndications”—buildings worth $150-200 million, with minimum premiums in the $50-100,000 range.

“We’re willing to do syndication on the $25-million deal or the $50-million deal,” Taffae says. “Outside of Chicago, Los Angeles, Miami or New York, there are a lot of buildings you can buy for that amount. But in the current market, if you want to transfer that risk, there’s just not a lot interest. Because we’re doing all the other coverages, we can afford to do it.”

RE360 includes no hammer on D&O, EPLI or fiduciary, and the E&O hammer is 80/20, “which is very high,” Taffae says. Additional policy highlights include coverage for public relations, “failure to advise,” property damage and outside directorship, as well as a sublimit for Fair Housing Discrimination Act coverage, which Taffae says is “rare—that’s hard to get.” The pollution exclusion is liberal. ExecutivePerils will also cover agent-owned property and offers subpoena assistance.

UNDERWRITING: Broad definition of “real estate service.” Retroactive coverage, post-policy reporting and an early resolution bonus are all available. Limits available up to $25 million. Requirements include an RE360 application, sample contracts, five years of carrier loss runs and copies of current policies.

MINIMUM PREMIUM: $15,000.

TARGET: Small to midsize real estate companies that offer multiple services, such as real estate sales, escrow, titling, property management and syndication.

“Where we truly outshine the competition are clients that have more than one E&O exposure,” Taffae explains. “When that’s the case, RE360 is a no-brainer.”

COVERAGE TERRITORY: All U.S. states except Alaska and Hawaii.

CONTACT: Peter R. Taffae, managing director; ExecutivePerils, 800 Wilshire Blvd., Suite 1525, Los Angeles, CA 90017.

Jacquelyn Connelly is IA senior editor.