Within the next few weeks, CNA will announce the introduction of an innovative new policy form. This is very good news, for the new policy broadens coverage, and it extends service innovations in ways designed to enhance your ability to practice as you believe best.

The new form was drafted in response to the dramatic changes affecting the performance of professional services in the 1990's. It was guided by the following objectives:

• Provide coverage for emerging forms of project delivery
• Respond to the growing trend toward international practice
• Support efforts to resolve disputes quickly and economically
• Clarify policy language and eliminate troublesome exclusions
• Afford the broadest coverage available in the marketplace

You can judge the results for yourself. Here are some of the significant features of the new CNA form:

• Automatic expanded pollution liability coverage for negligence in the performance of professional services after October 1, 1986.
• Automatic expanded asbestos liability coverage, including bodily injury claims and claims involving the specification or installation of products containing asbestos after January 1, 1990.
• Coverage for negligent infringement of a copyright, trademark, or patent.
• Coverage for negligent disclosure of trade secrets and other confidential or proprietary information entrusted to you by your clients.
• Design/build coverage for your professional services on a design/build project, even where you are involved in construction or are in a joint venture with a construction contractor. The contractor's faulty workmanship is excluded.
• Innocent principal coverage for losses precipitated through the intentionally wrongful acts of one principal without the knowledge of the others.
• Coverage for leased staff working under your supervision and for retired employees or principals acting as consultants to you.
• Coverage for claims brought anywhere in the world, including the obligation to defend anywhere in the world.
• Coverage for claims arising out of bankruptcy or insolvency, including the bankruptcy or insolvency of the owner, the general contractor, or one of the subcontractors on a project you design.
• Automatic waiver of subrogation when you have signed an agreement prior to a loss waiving CNA's rights of subrogation against your client.
• Voluntary reporting of circumstances, supported by pre-claims assistance at CNA's expense.
• A mediation deductible credit of 50%, up to a maximum of $15,000, where claims are successfully resolved through voluntary mediation.
• Loss of earnings reimbursement of up to $250 per day ($5,000 per claim) to help mitigate the cost of participating in legal proceedings at the request of CNA.
• COMMITMENT PLUS profit sharing (CNA's contractual obligation to cap its underwriting profit at 3% and stabilize rates over time, the only such commitment in the professional liability insurance marketplace.

For those of you who are currently insured in the CNA/Schinnerer program, including those in the three year, small firm program, the new policy will be issued on your first renewal after the form is approved by the California Insurance Commissioner. It is impossible to predict how long this may take, but our understanding is this: Once the form is approved, the benefits of the coverage enhancements will be automatically extended to existing policyholders. The new policy will be issued to insureds new to the CNA/Schinnerer program as soon as the Commissioner's approval is granted.

The foregoing is only a summary of some of the more significant features of the new form. Please refer to the actual policy for details. CNA continues to offer the flexibility of specific project excess insurance, split limits, limits of liability to $15 million, and, subject to underwriting considerations, endorsement of your practice policy to afford coverage excess of project insurance written separately.

As always, if you have questions about coverage issues, company services, or competitive conditions in the marketplace, please give us a call. We will be happy to assist you in any way we can.

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Hilb Rogal & Hobbs Professional Practice Insurance Brokers, Inc.

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For inquiries or problems please contact us via e-mail at dee.pahlke@hrh.com or call us directly at 800-705-7742.
©2005 Hilb Rogal & Hobbs Professional Practice Insurance Brokers, Inc. All Rights Reserved. California License #0641361.