Even during this very challenging insurance marketplace, our agency force has again outperformed the industry and helped Rockford Mutual Insurance to grow. As we focus on the need to grow our business “profitably,” now is a good time to re-enforce two key “front line” underwriting principles:
· Vacant Buildings – Vacant buildings are becoming more and more common in our society. Not only do unoccupied properties lead to higher risk of theft and vandalism, they are also more prone to frozen pipe/water damage losses in the winter. It’s important to remember that in order to qualify for coverage in any of our commercial programs, occupancy for apartment or condominium buildings must be 50% or better at minimum. This information should be asked to all prospective insureds on new business submissions as a part of the underwriting process. If the occupancy rate is less than 50%, coverage should not be bound and any exceptions will require approval from your underwriter. For all accounts with coverage already in force, you should notify us as soon as you become aware of properties that do not meet this guideline. Your commercial underwriter will work with you to determine appropriate action.
· General Contractors – Our appetite for contracting operations have been closely aligned with the classes of business that fit into our CONPAC program. This program offers a diversity of business operations that allow you to insure small artisan contractors with Rockford Mutual Insurance Company. It is important to remember that General Contracting operations do not fit within any of our programs. When conducting frontline underwriting on these operations, pay close attention to the amount of business that the applicant is subcontracting out to other entities. If the total amount of their receipts exceeds 25% from work that is subcontracted to others, they are considered a “General Contractor” and do not qualify for coverage. We have enhanced our automated system to make this question more visible and have added a separate question to our self-audit forms to clarify insured’s operations.
It is through your support that we will mutually create a long-term, profitable book of business. It’s as important that you protect your own agency’s loss ratio as well as the results for Rockford Mutual Insurance Company. We appreciate your commitment to RMIC and are happy to answer any questions that you may have.
· Vacant Buildings – Vacant buildings are becoming more and more common in our society. Not only do unoccupied properties lead to higher risk of theft and vandalism, they are also more prone to frozen pipe/water damage losses in the winter. It’s important to remember that in order to qualify for coverage in any of our commercial programs, occupancy for apartment or condominium buildings must be 50% or better at minimum. This information should be asked to all prospective insureds on new business submissions as a part of the underwriting process. If the occupancy rate is less than 50%, coverage should not be bound and any exceptions will require approval from your underwriter. For all accounts with coverage already in force, you should notify us as soon as you become aware of properties that do not meet this guideline. Your commercial underwriter will work with you to determine appropriate action.
· General Contractors – Our appetite for contracting operations have been closely aligned with the classes of business that fit into our CONPAC program. This program offers a diversity of business operations that allow you to insure small artisan contractors with Rockford Mutual Insurance Company. It is important to remember that General Contracting operations do not fit within any of our programs. When conducting frontline underwriting on these operations, pay close attention to the amount of business that the applicant is subcontracting out to other entities. If the total amount of their receipts exceeds 25% from work that is subcontracted to others, they are considered a “General Contractor” and do not qualify for coverage. We have enhanced our automated system to make this question more visible and have added a separate question to our self-audit forms to clarify insured’s operations.
It is through your support that we will mutually create a long-term, profitable book of business. It’s as important that you protect your own agency’s loss ratio as well as the results for Rockford Mutual Insurance Company. We appreciate your commitment to RMIC and are happy to answer any questions that you may have.
Contributed by:
Joe Flynn, CPCU, AU, CRM
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