Charles Stults, president of Allen & Stults Company based in Hightstown, New Jersey, opens up about his agency's background, passion for D&O and more.
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Tell us a little about your agency.
The agency was founded in 1881 by my great-grandfather and his uncle and it’s been in the family ever since. We’re about 50% commercial, 40% personal and 10% benefits and financial services. Besides D&O, we have a couple of specialties: non-profits and our agribusiness program.
What made you decide to join the family business?
When I was 9 or 10, I would sit in the car when my father and grandfather visited their farm clients. I would watch my father and grandfather and the clients would be happy through their tears when they saw them. Back then we had agency drafts and we could give insurance company checks to the clients. I saw them give their customers a check and I thought, “Well this is a cool business—you can make people happy, give them money.” When I came home from college, I found out I had to sell insurance and collect money. I thought, “This isn’t what I signed up for!”
How did you become a D&O specialist?
I started in the early 1970s when the co-ops and condo boom was just beginning. They started to be introduced in the east and nobody really knew anything about them. On the property side, I basically wrote property policies and tenants policies before HO6 forms existed. But the association boards became exposed to second-guessers and lawsuits. At that time, the D&O product for associations was relatively new and there was no such thing as an ISO or a standard form.
About the same time, I wrote a fair number of public entities and became familiar with public officials liability—the equivalent of D&O for public officials. They were nonstandard forms as well, so I had to learn how to read and compare coverage form to coverage form. Not many other agents had an interest in reading policies back then, but I was young and still found it interesting.
Biggest changes you’ve seen in D&O in the past decade?
The number of carriers in the market, the refinement of the forms and the expansion of the products. I’ve also seen it become safer to offer many coverage areas in a package form, like D&O, employment practices, fiduciary liability, crime and miscellaneous professional all wrapped up under a master. It’s more important than ever to read every coverage part.
Favorite D&O success story?
The one that made me feel the best was on the claims side when I tried to convince one of my larger accounts to use the insurance company’s counsel. Meanwhile, their own directors convinced them to use their normal counsel. The bottom line was what I initially warned them about actually ended up coming true—only about half of their expense cost was covered because their counsel charged about three times the going rate and counseled them not to settle. It cost the insured about $380,000 out of pocket. I couldn’t recover their $380,000, but I’m still there and the client’s legal counsel isn’t.
Jacquelyn Connelly is IA senior editor.
