New Lumber Program Covers Post-Sawmill Industries

PRODUCT: Package program for lumber, building materials and secondary forest product industries

COMPANY: Scottsdale Insurance Co.

BEST RATING: A+ (Superior), Size XV

AVAILABILITY: Coverage is available through appointed brokers and retail agents.

FOCUS: The Insurance Center for Building Materials (ICBM), a managing general agency created by wholesale broker Swett & Crawford, offers a comprehensive package program for lumber, building materials and secondary forest product industries.

Underwriter Scottsdale Insurance Company provides “a non-admitted product that is designed to address all the exposures that a lumber company, secondary forest product manufacturer or building materials dealer would desire to have to protect their assets and their businesses,” says Jamie Taylor, ICBM managing director. Taylor adds that the program includes “a lot of specialty coverage and specialty lumber extensions, and the coverage is broad with very high limits.”

The niche market is huge but tricky. “From every small town to every large city, there’s always a hardware store, a lumber distributor, a roofing distributor, a hardwood flooring guy and there’s always someone doing custom-made cabinets,” Taylor explains. “So the ‘bread box’ is quite large, but it’s a very specific niche.”

And serving it requires an investment in education. “There are lot of people who’ve written it unsuccessfully because they didn’t understand the niche completely—the construction defects and the unique exposures that are involved,” Taylor says. “It takes a good broker to recognize it.”

UNDERWRITING: ICBM created the program “to be one-stop shopping for our wood and building materials retail producers,” Taylor says. ICBM offers $1 million in-house capacity with more available upon referral, any general liability limits desired and $15 million of in-house excess liability capacity. Umbrella coverage capacity is $10 million, with additional limits available on request. Workers compensation for larger risks and employers liability are also available. Admitted auto is available through partner carriers.

For property coverage, capacity is $10 million per location and $100 million per account (higher limits available). Property liability includes full business income coverage, with extended reporting available. Full boiler and machinery coverage is available. All crime coverages are available, with optional higher limits.

Specialty property liability includes coverages for earthquake, earthquake sprinkler leakage, flood and difference-in-conditions exposures, with limits of $10 million per location and $100 million per account. With authority to write primary $5,000 through Scottsdale Insurance Co., ICBM’s program entertains risks built in 1975 or later, including building ordinance. Minimum premiums range from $7,500 to $25,000, depending on county and zone locations.

Employment practices liability includes coverage for indemnity and defense, not just defense-only. Standard limit is $100,000, with $250,000, $500,000 and $1 million limits available on request.

As part of the package program, loss control service experts conduct a comprehensive review of the policyholder’s premises, including roof inspection, building inspection, alarms review, floor and housekeeping review and work area inspection. Safety training is also available.

MINIMUM PREMIUM: $2,000.

TARGET: “Once it’s post-sawmill, we insure anybody with a wood product,” Taylor says. Those targets include a broad range of businesses including wood treaters, kiln operators, drying operations, lumberyards and manufacturers of cabinetry, hardwood floors, caskets, picture frames, furniture and guitars.

COVERAGE TERRITORY: Available in 34 states, excluding AK, AL, AR, CT, DE, HI, LA, MA, ME, MS, MT, NH, NJ, RI, TX and VT.

CONTACT: Jamie Taylor, managing director, Insurance Center for Building Materials, a Swett and Crawford Company, 515 South Figueroa St., Suite 600, Los Angeles, CA 90071; 213-439-3412. For appointment, contact your local Swett & Crawford office.

Ronimarie Acord is an IA contributor.