Chicago, IL ~ November 8 - 10, 2006

2006 International 2006 International ConferenceConference

TO COMBO TO COMBO OR OR NOT TO NOT TO COMBO?COMBO?

Southern California Chapter

Moderator: Mike Cardenas, RPLU Assistant Vice President, Partners Specialty Group

Panelists:Panelists:Gordon J. Calhoun, Esq.: Partner, Lewis Brisbois

Bisgaard & Smith LLP

Sally L. Combs: Technical Director-Professional Liability Claims, Fireman’s Fund Insurance Company

Rocio L. Orta, CPCU, RPLU, ASLI: Professional Liability Specialist, Western Security Surplus Insurance Brokers

Mary K. Saunders, CPU, ARM: Product Manager, Shand Morahan & Company, Inc.

Keith M. Thomas: Senior Vice President, Zurich Insurance Company

Roadmap:Roadmap:Scenario Number One

10 minutes to vote on your responses to four questionsDiscussion by panelists

Scenario Number Two10 minutes to vote on your responses to three questionsDiscussion by panelists

Closing remarks

Scenario Number Scenario Number OneOne

A home inspector turns on a faucet in the second floor tub to check the water pressure. He discovers that the water must be turned off at the main. He goes to the ground floor, turns on the water at the main and gets sidetracked. The tub on the second floor overflows causing damage to walls and ceilings in the rooms under the overflowed tub.

Question Number Question Number OneOne

Provided contingent bodily injury/ property damage was included via endorsement with the professional liability policy, will the policy respond and if so, which answer would NOT apply?

A: Absolutely! That's what contingent bodily injury/ property damage coverage is for.

B: It depends on the definition of “property damage” on the form.

C: It depends on any additional exclusions usually added to contingent bodily injury/ property damage endorsements.

D: No coverage would apply if coverage is afforded under a commercial general liability policy. This is a common exclusion found on contingent bodily injury/ property damage endorsements.

Is allowing the tub to overflow "professional services"? Choose the answer that most closely fits the correct response:

A: No, leaving the water running is really quite unprofessional.

B: No, only when the insured is engaged in activity that requires the technical expertise necessary to perform inspections is "professional service."

C: Yes, the only reason the insured is on the premises is to perform an inspection and everything done on the premises is "professional services."

D: It depends on the definition of "professional services" in the policy and the exact wording of the exclusion or coverage grant in question.

Question Number Question Number TwoTwo

Question Number Question Number ThreeThreeAssume the home inspection was pursuant to

an impending sale. After the deluge, the home inspector and the seller notify their insurers and each retains a remediation company. During the delay mold grows on soggy sheetrock. The buyer backs out of the sale and housing prices crash. The seller’s insurer cancels because of excessive claims. The seller sues for: (1) remediation and repair costs; (2) lost profits; (3)

diminished value due to water damage and mold; and (4) cancellation of her policy/ refusal to cover her new home. Which portion of the home inspector’s available coverage should respond to the claims?A: General liability.

B: Both general liability and professional liability.

C: Neither coverage responds.

D: It depends.

Question Number Question Number FourFour

Which of the seller's claims should be covered by the home inspector's policy?

A: Remediation and repair costs and lost profits measured from market peak.

B: Diminished value because of disclosure obligations and loss of insurability.

C: It depends.

D: The seller gets nothing because the loss caused her new home to fall out of escrow; so, she doesn't have to pay on two houses.

Scenario Number Scenario Number TwoTwo

A temporary staffing agency provides an Engineer to an energy construction company. The Engineer mis-marked a work zone measurement in the course of a pipeline repair job. The pipeline exploded killing several people and seriously injuring a number of others.

Question Number Question Number OneOne

How can the underwriter exclude or contain the risk whether or not the account purchases a combo or standalone contract?

A: Define service to preclude professional services rendered after placement on the job.

B: Provide only contingent bodily injury/ property damage.

C: Strengthen the other insurance clause.

D: All of the above.

Question Number Question Number TwoTwo

If the contract with the insured's client says they will provide supervisors and work crews to perform pipeline construction and repair, should a professional liability underwriter:

A: Offer a combo professional liability and general liability?

B: Offer a professional liability with contingent bodily injury/ property damage provided general liability is placed elsewhere?

C: Offer professional liability without contingent bodily injury/ property damage due to the significant general liability exposure?

D: Decline the account as a construction general liability exposure?

Question Number Question Number ThreeThree

An unendorsed Insurance Services Office, Inc., commercial general liability policy will provide coverage to the temporary staffing agency for the bodily injury claims arising from the engineer's work:

A: Always.

B: Never.

C: It depends.

D: Only when the policy was written on the night of a full moon.

Closing Closing RemarksRemarks

Thanks to the panelists for sharing your expertise and insight!

Thanks to the audience for your interaction and participation!