You’ve probably noticed that updated policies from some insurance companies usually include tightened coverages concerning product liability insurance. There are new exclusions, more precise and specific verbiage, and more limited coverages. Essentially, some insurance policies are becoming more restrictive as the insurance companies become more specific in what risks they want to take. But not all insurance companies are taking this route.
Insurance Companies Track Data & Refine Policies
As claims and lawsuits test the coverage limits of a policy, insurance companies watch the case results to see what rulings will become precedent for future claims and lawsuits. When coverage verbiage comes into question during a claim, companies will monitor the decisions and outcomes so they can make necessary changes to avoid repeating the same verbiage conflict.
Companies monitor more than the outcomes of claims and lawsuits of their own policies; they track other insurance companies that have similar coverages or relevant coverage data. ISO, a member of the Verisk Analytics Family of Companies, tracks insurance data, research, and news for insurance companies to use for their own policies, including insurance language to make exclusions and restrictions standard across multiple companies. Insurance companies will use the data to refine their own policies and make sure that their risks and exclusions are exactly what the company intends them to be without having to rely on future claims or lawsuits to determine the verbiage interpretations.
So when the next policy you work with increases its exclusions or modifies its verbiage, that company is refining and redefining the risks it’s willing to provide insurance coverage for. The company either experienced a claim or lawsuit that identified uncertain verbiage or exclusions or monitored another company’s claim or lawsuit and decided to act upon the outcome.
Advantages of a Wholesale Broker or Program Manager
However, not all insurance companies increase their restrictions on the same exclusions. Some companies are broadening their appetites for those same coverages. This is one reason why it’s important to work with a wholesale broker or program manager who has the expertise to find the right policy to meet each applicant’s coverage needs. Each insurance company limits and increases their coverages and exclusions to fulfill the variety of appetites they wish to provide insurance for, and knowing those coverage changes will help you place policies with the right companies.
Veracity Insurance Solutions is a national MGA and program manager and with underwriting authority and the ability to customize policies, Veracity is a great solution for businesses looking for product liability coverage. Please visit our product liability page to learn more.