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From the Front Lines: General Liability

"Recently, the market has been constricting—both in appetite and limits available, and mostly in the excess and umbrella lines,” says independent agent Tony Arneson. “The number of lawsuits and the size of jury awards are rapidly trending higher.”
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From the Front Lines: General LiabilityTony Arneson

Vice President

Neckerman Insurance Services

neckerman.com

Madison, Wisconsin

How did you get started at your agency? 

Both my grandfathers and my dad were in the insurance business, so I am a third-generation insurance guy. After college, I worked for General Casualty Insurance and later managed my dad's agency. We merged our agency with Neckerman Insurance in 1993 and my current business partners and I bought the agency in 2005.

Why general liability?

Our agency is 99% property-casualty and more than 60% of our business comes from commercial accounts. General liability coverage is the core of all those clients' business insurance portfolios. It protects them from what could be their greatest risk of financial loss. We don't write a commercial account without it.

Changes and challenges in the general liability market?

Recently, the market has been constricting—both in appetite and limits available, and mostly in the excess and umbrella lines. The number of lawsuits and the size of jury awards are rapidly trending higher. Insurance carriers are backing off and offering renewals with lower limits at a higher cost. Our clients are having to go with less coverage or spend more to purchase excess limits from other carriers.

Finding the liability coverage limits our customers have been accustomed to and want is getting more difficult. Certain risks can no longer be insured in the standard market. Most of our standard carriers now have specialty lines divisions, and we have had success placing these accounts with them.

Future trends? 

In the short term, restrictions on higher and excess limits, higher pricing and less favorable coverage forms will continue. As the courts begin to get better control of jury awards and insurance carriers work to settle more suits out of court, we may see the higher and excess limits become available again. But we don't anticipate any pricing relief on the horizon.

Advice for a fellow agent?

Understand your favorite carriers' underwriting appetites, and then work to create and improve your relationships with those carriers, their specialty lines underwriters and your preferred E&S broker contacts. Be aware of what limits they are willing to put up and where you can go to obtain additional excess limits. Focus on the coverage-limiting endorsements and exclusions they are putting in their quotes and whether these clauses can be removed or carved back for an additional premium. Also, always offer your customers the highest liability limit options you can find.

Favorite success story?

We insure a property management firm that provides services to fraternities and sororities. They used to only manage properties owned by others but recently purchased a building that housed a fraternity, on campus and on a lakefront property. GL nightmare, right? All of our carriers and E&S markets were declining to quote. With over 60 days' advance warning of the closing, we were just three days from closing with no options and then a carrier offered terms. Only one market came forward, but we were finally able to bind coverage with just one day to spare.

Olivia Overman is IA content editor.

16064
Monday, September 13, 2021
General Liability