-Partners in Practice -
INSURANCE MARKET UPDATE	FEBRUARY 1994

We are very pleased to be able to inform you that, effective February 1, 1994, CNA's pre-claims counseling services were expanded to include the cost of outside expertise necessary to assist in the resolution of disputes before they erupt into formal claims. If you are insured in CNA, your current policy provides for the voluntary reporting of incidents or circumstances reasonably expected to give rise to a claim and for assistance from the CNA claims staff, where appropriate.

CNA's new service extends CNA's commitment to its policyholders in a significant way. It now includes reasonable and necessary outside expenses incurred in responding to conflicts in construction with prompt and effective attention. This might include experts, legal counsel, construction claims analysis, or a mediation service. It could also include legal assistance in producing documents or preparing for a deposition in a dispute to which you are not a party. The costs are not chargeable against your deductible. They are paid by CNA as an expense incurred within the limits of liability under the policy.

This service is available immediately. It requires only that a circumstance reasonably expected to give rise to a claim be reported to CNA and that pre-claims assistance be requested. CNA will respond by stepping in, where possible, with the resources necessary to address the issue at hand.

This is not the only program feature that keeps CNA in a position of leadership in the professional liability insurance marketplace. Others include the following:

1. Specific project excess limits are available as an extension of your practice policy. This enables you to offer higher limits to clients demanding additional insurance protection on their projects and pass the costs on to them. The additional limits are written as primary coverage, and they are dedicated to the specified project. This has the advantage, unique in the marketplace, of placing a buffer between your practice policy and losses on that project. The cost is identifiable, and coverage can be left in force following substantial completion for as long as your client is willing to pay a minimum annual premium.
2. Split limits can be purchased to provide for the restoration of coverage in the event your basic policy limit is exhausted. Policies written with split limits afford an aggregate limit of liability which exceeds the per claim limit by a specified amount (i.e., $1 million per claim, $2 million in the aggregate).
3. Expanded pollution coverage is available for firms with only incidental exposures. It is subject to a minimum additional premium of 3%. If you are engaged in civil engineering, hospital or laboratory design, or if you find that retaining a geotechnical engineer is unavoidable on some projects, we would urge you to consider this coverage. For firms with direct exposures to pollution losses, expanded coverage is offered at highly competitive rates.
4. Selection of counsel for the defense of claims is more discretionary than ever. The CNA claims staff will consider all requests and will accommodate those requests wherever reasonably possible.
5. Commitment Plus, CNA's dividend program based on a profit-capping agreement with the AIA and NSPE, will return more than $50 million to policyholders* this year. Over the past four years, more than $138 million have been returned--above and beyond any loss prevention credits that apply. Most insurance companies promise stable premiums over time and claim a commitment to restraint during hard markets. CNA is the only insurer of architects and engineers to back that commitment in a measurable and highly visible way.

   (* Commitment Plus applies to premium paid for the first $250,000 in limits maintained by policyholders with annual billings of less than $5 million during calendar years 1986 through 1990. Beginning in 1991, Commitment Plus premium guarantees were extended to the first $1 million in limits maintained by all policyholders.)

6. Large firm initiatives available to current and prospective CNA insureds with favorable loss experience include fronting programs, reinsurance of captives, excess coverage, guaranteed multi-year rates, co-insurance, and premium stabilization options.

We would be pleased to discuss any of these program features with you in greater detail. Please feel free to give us a call.

Insurance Market Updates is a communications resource intended to enable us to keep our clients and prospective clients informed of important events taking place in the professional liability insurance marketplace. We will address initiatives undertaken by others in the marketplace as new developments emerge.

	Professional Practice Insurance Brokers, Inc.
10 California Street Redwood City, CA 94063 (415) 369-5900	4401 Colwick Road Suite 700 Charlotte, NC 28211 (704) 365-0900	540 Frontage Road Suite 3030 Northfield, IL 60093 (847) 441-0210	2244 West Coast Highway, Suite 200 Newport Beach, CA 92663-4724 (714) 729-0700
© 1996, Professional Practice Insurance Brokers, Inc. This newsletter is published as a professional liability loss prevention service to PPIB clients and friends. It is intended for use by architects and engineers as an information resource. It is not intended to afford legal or insurance advice or opinion. Readers are urged to consult competent legal and insurance counsel for assistance in applying the information presented here to their own unique circumstances.