Risk Management Internship
Intern Dispatches: What I learned in my first week
Kalob McConnell is a a senior Finance and Risk Management major from UC Denver and just completed his first day of training at Bigfoot Insurance. He had a lot of questions and spoke to underwriters and assistants to get the answers. Here’s what he learned from his simple to more complex questions.
Basic Questions:
Q: What does the term “Appetites” mean?
10 Things You Didn’t Know about….
Homeowners as told by Adriana Oregon
Tiny Homes as told by Saaya Boling
Management Liability as told by Heather Gilginas
Workers' Compensation as told by Amanda Seifert
Inland Marine as told by Fara Schnurr
General Liability as told by Jimmy Pacyna
Garage & Dealers as told by Alysa Wiggins
A: This term is used to refer to what an insurance company likes to write. It is usually a target class of operations. This changes as the seasons and years go by. Search our Appetites HERE. (Mary Pierce)
Q: What does “markets” refer to?
A: Markets refers to the insurance companies with which we have relationships (whether that is direct, or through a broker, or through a Managing General Agency Underwriter). Check out our Markets page for more information.(Mary Pierce)
Q: What is an underwriter?
A: The individual (sometimes we refer to the company as the underwriter as well) that is responsible for the analysis and review of the risk submitted. (Mary Pierce)
Q: What is a risk?
A: The insured, the operations, the account. (Mary Pierce)
Q: What is a niche market for homeowner’s coverage?
A: This includes high value homes, rental dwellings (both annual and short-term rental), secondary homes / vacation homes, and risks with multiple claims. Learn more about our Homeowners Program HERE. (Adriana Oregon)
Q: What is a lapse in coverage up to 60 days.
A: This means that we have markets available that will consider offering terms if a risk has been insured up to 60 days. (Adriana Oregon)
Q: What is retention (in regard to executive coverage).
A: Retention is similar to a deductible. Most Directors and Officers (D&O) Liability coverage has a zero deductible unless they had prior issues. You can learn more about our Professional Liability markets HERE. We also have a 10 Things You Didn’t Know about Management Liability blog post. (Heather Gilginas)
Q: What does LRO mean?
A: LRO is short for Lessors Risk Only. That means we are insuring a building for Fire/Wind coverage along with the General Liability coverage for the building owner. (Fara Schnurr)
Then things got a bit hairier…
Q: What is excess coverage?
A: In the case of liability and property coverage, excess policies are written above a primary policy to get the client the coverage they need. If a business has $1m in general liability but needs $3m in coverage they would get two policies: Primary $1m and an excess (XS) policy at $2m. Learn more about our Excess & Umbrella programs HERE. (Ben Shoemaker)
Q: What is “blanket coverage” when in reference to a personal article floater?
A: Blanket coverage for fine art is if you have a large collection of small value items (suppose we use a collection of vases as an example). Blanket coverage would cover all of the vases rather than schedule out each individual vase. For fine art coverage it is tailored to individual pieces (which are generally much higher value items). Since blanket coverage is more generalized, the premium is going to be higher because there will now be issues of how one vase would be paid out in the event of a loss. (Saaya Boling)
Q: What is maximum capacity and why is there a maximum capacity for certain zip codes?
A: Commercial Lines: Insurer’s actuaries determine things like probable maximum loss for an area and cap the number of policies and limits offered. This is so they can pay claims and stay profitable in the event of a catastrophic event. (Ben Shoemaker)
A: Personal Lines: There is usually a max capacity (commonly known as aggregate limit) in areas that are high risk. The carrier sets the aggregate by city, state, zip, county, or region. It is common to see this in areas along the coast, areas with high likelihood of fire, areas with high likelihood of wind/ hail claims, or areas with likelihood of storm related damage. Carriers do this to limit their exposure in that area. Example- You would not want to be the only carrier in CA writing unlimited aggregate in high fireline areas because one fire season could completely bankrupt the company. (Robert Rogacki)
Q: What is an Acord?
A: Acords are industry standardized applications. At the bottom of each Acord is a form number. The form number is significant to the purpose of the form. For example, Acord 125 contains the basic information and is paired with most other forms as an application. With regard to commercial businesses needing insurance, state licensed agents fill out these forms to collect the data necessary for us (underwriters that work with carriers who provide the insurance coverage) to review the risk and see if there is a carrier that we work with that can provide insurance for the commercial business. You can learn more about our membership with Acord or access commonly used Acords HERE. We may also request a supplemental once reviewed. (Heidi Feist)
Q: What is a suspension in binding authority?
A: Suspensions are restrictions to write or increase coverage in a given area. This is due to fires, storms, riots, etc. This is to prevent an increase in risk. We get informed of these by email. They are effective immediately – both when restricted and reinstated. Follow named storms, flood, fires, and other large events on our RESTRICTIONS page. Learn more about our Disaster program HERE. (Arturo Sabal)
Q: What is inland marine insurance and how does it differ from similar forms of coverage?
A: Inland Marine is excluded from property coverage and is mainly used to insure specialty equipment/products, such as: computers, art collections, construction equipment, medical equipment etc. Learn more about our Inland Marine markets in our recent blog 10 Things You Don’t Know About Inland Marine. (Fara Schnurr)
Q: What are the basics of workers’ compensation coverage?
A: Workers compensation is a type of insurance that protects businesses from substantial medical costs and lawsuits. It can also help injured workers get the help they need. It can cover medical expenses, lost wages, ongoing care, and even funeral expenses. Learn more about our Workers’ Compensation markets in our recent blog 10 Things You Don’t Know About Workers’ Compensation. (Sara Bullock)
Q: Why are officers and partners excluded from workers’ compensation?
A: Officers and owners are usually exempt, BUT they can elect to opt for workers’ compensation coverage. We provide that option on our Work Comp applications. It varies from business to business and it is up to the officers/owners. Not including officers and owners can help reduce the premium for coverage. (Sara Bullock)
Q: What is long term care?
A: Long term care (LTC) is basically insurance to handle assisted living facilities (for Alzheimer’s, etc.). We have a variety of options for Long Term Care, Life Insurance, Group Health, and more! (Martin Burlingame)
Q: Why do men’s and women’s items have different valuation requirements (when in reference to a personal article floater)?
A: Men’s items are rated at a higher rate (meaning higher premium) and a higher risk of loss. Most of our jewelry is women’s jewelry. Women’s jewelry is also broken down between jewelry under $25k and over $25k. More expensive jewelry is rated higher because it's just as likely to be stolen than a less expensive jewelry (we insure some rings worth more than a house, but they're "tiny" items that are easy to lose). Learn more about our Personal Article Floater program HERE. (Saaya Boling)
Q: How often do tiny homes go missing?
A: Tiny homes don’t really go missing. I haven’t had a claim about that yet. The risk is there because most tiny homes are built on a trailer with a tow hitch so theoretically someone can come in, hook up the tiny home to their truck, and drive off with it. Theft of the tiny home is an optional coverage if the insured wants a little more security in case something like that happens. If the tiny home is built by a company, they will usually include a serial/VIN number so if it's stolen, that number will come up. Learn more about our Tiny Home Program HERE. (Saaya Boling)
Q: What classifies as a tiny home for coverage purposes?
A: Tiny homes must be under 500 square feet. Most trailer homes are going to be considerable larger and so will small houses. There's some gray area for container homes (some are under 500 sq ft and some are over) so it's usually dependent on the square footage whether we can accept it into the tiny home program or if i have to refer it to our homeowners team. Plus, tiny homes can be built on or off a trailer or on sleds. Read more about 10 Things You Don’t Know About Tiny Home Insurance HERE. (Saaya Boling)
Q: In reference to garage coverage, why do we exclude garages with racing exposures?
A: We do not have any markets that would entertain any risks involved with cars that are intended for racing. You can learn more about our Transportation Department HERE. This includes Garage & Dealers as well as Commercial Auto & Trucking. We also have a great blog about 10 Things You Didn’t Know About Auto & Trucking and 10 Things You Didn’t Know About Garage & Dealers. (Karina Medina Pulido)
Q: What is Rigger’s Insurance?
A: Rigger's insurance is insurance for a contractor's liability arising out of the moving of property and equipment that belongs to others. The standard commercial general liability (CGL) policy does not cover this risk due to the exclusion for "personal property of others in your care, custody or control." Let's say you purchase materials to build a pool, and you hire the contractor to pick up the materials from where they were purchased and transport them to the location where the pool is being built. Rigger's insurance would cover the materials while being transported by the contractor since they are your property and do not belong to the contractor. Check out our Contractors General Liability offerings HERE or our (Jimmy Pacyna)
Q: Is the pricing structure of Property Protect consistent across the industry?
A: No, the Host Insurance product offered by Property Protect was designed by us as a response to a bad short-term renter experience. You can learn more about this and other coverage for short-term rentals here. (Kate Birtch)
Sounds boring but this was also important…
Q: What does errors and omissions mean?
A: Errors & omissions is a type of professional liability insurance. It provides coverage for property damage to the named insured’s work, the insured’s product, and impaired property. For example, if a contractor completes a $35,000 electrical job, and a few months after the building’s occupancy, the named insured’s product (a faulty junction box) causes a fire that extensively damages the building, the electrician’s CGL policy would cover damage to the building but exclude the $35,000 electrical work. If the electrician had a contractors’ E&O policy, the remaining damages would have been covered, provided sufficient limits. Learn more about Product Liability and Professional Liability HERE. (Jimmy Pacyna)
Q: Why are property inspections not required for policies with multiple residential properties?
A: The inspection requirements are typically set by the carrier. On a large schedule of properties we waive this requirement to save the property manager the headache of inspections, particularly when they have assets across several states. Instead, the carrier will advise (or leave it up to the underwriter’s discretion) a sample of locations they want inspected to get a general idea of the condition of the properties the customer keeps. Learn more about our residential asset program HERE. (Robert Rogacki)
Q: What are T’s& C’s?
A. This is industry speak for Terms and conditions. As with any insurance policy, our policies offer information on agreed rights and obligations. Please do not gloss over them. There is a list of important terms from the National Association of Insurance Commissioners that can be found HERE. (Ashley Dodge)
“I love insurance because it impacts everyone and is applicable to everyday life. It was a great first week on the job and I look forward to learning more about all the different aspects of the industry, developing skills from hands-on experience, and choosing my future career path. ”
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