Recession Increases Need for Crime Insurance for Small Businesses

We came across an interesting article on the increased number of employee theft claims due to the economy and the corresponding need for Crime Insurance. Here are some of the highlights of the article.

Since the recession began two and a half years ago, crimes by employees and third parties, including the dollar amounts involved, have risen sharply. Fueled by the fear of unemployment, employees are increasingly fighting back against their employers. They’re more likely to take what they feel they deserve because of the work done for their company over the years. As well, many companies are taking a closer look at risk controls to cut unnecessary costs, uncovering theft issues that may have been undetected in the past.
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Categories: Crime, Risk Management, Small Business

High E&O Limits Difficult For Small Tech Accounts

We were recently approached by a small tech prospect who requested a $10,000,000 Errors & Omissions Liability limit (AKA Professional Liability) to comply with contractual requirements of a project owner. Our primary E&O market for tech accounts is approved to handle limits only up to $5,000,000. Our MGA provided quote indications for an excess layer for an additional $5,000,000 from two carriers. However, the minimum premiums for this excess layer were $25,000 and $30,000 respectively.

Any carrier providing a limit approaching $10,000,000 will be wary of why the project owner would require such a high limit in the first place. This is likely to be a red flag that the type of work is high risk and as a result the underwriters will closely scrutinize such a submission.

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Categories: Errors & Ommissions, Professional Liability, Small Business