TWFG Commercial Business School – Commercial Commercial 101

TWFG Commercial Business School – Commercial TWFG Commercial Business School Commercial 101 Commercial 101 – 104 Commercial 101 Overview Commercial Insurance Basic Terms Commercial Insurance Polices: Overview Important Auxiliary Coverages ACORD Forms Overview Commercial Lines Workflow Process Submission Checklist Post-Binding Checklist

TWFG Commercial Business School – Commercial TWFG Commercial Business School Commercial 101 Commercial 101 – 104 Commercial 102 How Does the Underwriting Process Operate? Commercial Insurance Policy Coverages: First Level Detail Silverplume Overview (Live Demo) Comparative Rater Overview (Live Demo)

TWFG Commercial Business School – Commercial TWFG Commercial Business School Commercial 101 Commercial 101 – 104 Commercial 103 Commercial Lines Basics Property: COPE Commercial Lines Basics Property: Building Commercial Lines Basics Property: Business Personal Property (BPP) Commercial General Liability (CGL) Module 3 Case Study

TWFG Commercial Business School – Commercial TWFG Commercial Business School Commercial 101 Commercial 101 – 104 Commercial 104 Commercial Auto Multi-Line Policy Types Workers Compensation Overview Endorsements Common to Most Policies

TWFG Commercial Business School – Commercial TWFG Commercial Business School Commercial 101 Agenda Overview Basic Terms Policies Overview ACORD Forms Overview Post Binding Checklist Submission Checklist Quiz

TWFG Commercial Business School – Commercial TWFG Commercial Business School Commercial 101 Learning Objectives Understand how soliciting/quoting/binding/servicing CL differs from PL Understanding of basic Commercial Lines terms Understanding of types of CL policies and what they cover Awareness of important cross-sell coverages and policies Ability to complete common ACORD forms Understanding how prepare a submission, as well post-binding procedure

TWFG Commercial Business School – Commercial TWFG Commercial Business School Commercial How does Commercial Lines differ from Personal Lines? Degree of complexity Greater E &O exposure Necessity of being well trained Necessity of starting out small Admitted vs. Non-Admitted

TWFG Commercial Business School – Commercial TWFG Commercial Business School Commercial How does the selling process differ? Necessity of having credibility Knowing enough about a specific class to properly recommend coverage Commitment to continually updating your knowledge and skill level Necessity of being well prepared when presenting the quote

TWFG Commercial Business School – Commercial TWFG Commercial Business School Commercial How does the selling process differ? Greater number of exposures to evaluate Increases complexity of each exposure Greater financial risks Importance of providing complete and accurate information All underscore the importance of being qualified and knowledgeable

TWFG Commercial Business School – Commercial TWFG Commercial Business School Commercial (continued). How does the selling process differ? Necessity of having a formal marketing plan Extremely low win rate for quoting walk – ins Your competition is well organized Proper servicing and regular contact necessary for retention –This is a very competitive field

TWFG Commercial Business School – Commercial TWFG Commercial Business School Commercial 101 Commercial Insurance Basic Terms

TWFG Commercial Business School – Commercial TWFG Commercial Business School Commercial 101 Before delving too far into the realm of Commercial Insurance, it’s a good idea to discuss some important terms.

TWFG Commercial Business School – Commercial TWFG Commercial Business School Commercial 101 Insured: Person/entity that is named in the insurance policy. Usually the buyer.

TWFG Commercial Business School – Commercial TWFG Commercial Business School Commercial 101 Insurance Contract: Insurance policies are contracts. With only a few exceptions, insurance contracts are two party contracts. The two parties are the insured and the insurer. Although third parties (those who file claims against the insured) may benefit from the insurance contract, the insurer’s primary duty is the insured. The insurer either acts on behalf of the insured in situation where the insured would be legally liable for damages, or pays the insured directly for damage to the insured’s property.

TWFG Commercial Business School – Commercial TWFG Commercial Business School Commercial 101 Liability: This term appears often in the titles of different types of commercial insurance. It refers to acts for which the insured is held legally liable. These acts are what “trigger” coverage under many policies. Most liability insurance contracts today are open peril, meaning that all causes of loss are covered except those specifically excluded. So, if the insured does something that causes harm or damage to other, and that “something” is not an excluded act, then the insurance policy will respond.

TWFG Commercial Business School – Commercial TWFG Commercial Business School Commercial 101 First Party Coverage : This refers to coverage for things that the insured owns. When these are damaged, the insurer pays the insured (first party) directly. Typical examples are building and business personal property.

TWFG Commercial Business School – Commercial TWFG Commercial Business School Commercial 101 Third Party Coverage: This refers to liability claims. The third party is the individual/entity that is damaged due to the insured’s acts. They are also known as the “claimant”, as they bring a claim against the insured. Note that the third party is not a party to the insurance contract, but does benefit.

TWFG Commercial Business School – Commercial TWFG Commercial Business School Commercial 101 Who is the Second Party? The insurer is the second party. So, the insurance contract is a two party contract between the insured (first party) and the insurer (second party). When there are liability claims, a claimant (third party) may be paid for damages.

TWFG Commercial Business School – Commercial TWFG Commercial Business School Commercial 101 Property & Casualty (P&C) Property and Casualty Insurance (P&C) refers to the primary exposures covered by the most common commercial insurance policies. Property refers to physical property such as building and contents or auto physical damage. Casualty refers to liability, such as auto liability or commercial general liability.

TWFG Commercial Business School – Commercial TWFG Commercial Business School Commercial 101 Commercial Insurance Policies Overview

TWFG Commercial Business School – Commercial TWFG Commercial Business School Commercial 101 There are a number of common policy types for commercial insurance. Following is a list with some basic description of what each policy covers.

TWFG Commercial Business School – Commercial TWFG Commercial Business School Commercial 101 Commercial General Liability (CGL) As the name indicates, this policy provides coverage for acts committed by the insured for which it is held legally liable. These acts are limited to the insured’s premises, operations, products and completed operations. Typical exposures would be:

TWFG Commercial Business School – Commercial TWFG Commercial Business School Commercial 101 Premises Injury to others while they are on the insured’s premises. For example, someone slips and falls at a place of business. Operations Damage or injury to others while work is in progress off the insured’s premises. For example, a contractor severs a water line while digging to install a fence post.

TWFG Commercial Business School – Commercial TWFG Commercial Business School Commercial 101 Products Damage or injury caused by the insured’s product. For example, a consumer is injured when a chain comes loose from a chain saw. Completed Operation Damage or injury to others caused by the insured’s completed work off premises. For example, three weeks after a plumber completes repairs at a residence, the glue on the repaired pipe fails, causing a leak which damages carpet and sheetrock.

TWFG Commercial Business School – Commercial TWFG Commercial Business School Commercial 101 Commercial Property These policies provide coverage for the insured’s owned building and/or business personal property such as furniture, supplies, fixtures and inventory. Business Auto This policy provides liability coverage for the insured’s autos. It may also provide physical damage coverage to the insured’s autos (a form of first party coverage)

TWFG Commercial Business School – Commercial TWFG Commercial Business School Commercial 101 Inland Marine This is a form of property coverage used for specifically valuable items or for items that do not stay at the insured’s premises. The most common example is mobile equipment such as bulldozers or tractors owned by a contractor.

TWFG Commercial Business School – Commercial TWFG Commercial Business School Commercial 101 Workers Compensation and Employers Liability Often just referred to as Workers Compensation coverage, this type of policy provides no-fault coverage for injuries to employees. In other words, if an employee gets injured on the job, he/she does not have to prove that the employer was negligent or at fault. Workers Compensation pays regardless of fault. It is mandatory in most states. The policy also provides coverage to the employer for non-workers compensation claims that an employee might file against the employer.

TWFG Commercial Business School – Commercial TWFG Commercial Business School Commercial 101 Professional Liability The CGL defines professional acts and excludes them from the policy. This is done because professionals are held to a standard of conduct greater than what is contemplated under the “general” liability policy. Therefore, separate professional liability coverage is needed.

TWFG Commercial Business School – Commercial TWFG Commercial Business School Commercial 101 Workers Compensation Provides a sole remedy for injured workers Includes employer’s liability for injuries not covered by worker’s comp Losses associated with these coverages are excluded under all other CL forms Over 73% of claims facing companies today are from their own employees Going “bare” exposes an employer to a swift and costly end

TWFG Commercial Business School – Commercial TWFG Commercial Business School Commercial 101 Cyber Liability High incidences of identity theft and network hacking Costly regulatory compliance exposures Any business that handles customer data or has a large employee base is exposed Multiples levels of coverage available Minimum premiums starting at $500 Some carriers BOP products can endorse this coverage

TWFG Commercial Business School – Commercial TWFG Commercial Business School Commercial 101 Employment Practices Liability Insurance (EPLI) Exposures not covered by GL or WC forms Losses resulting from wrongful employment practices: – Discrimination, sexual harassment, retaliation, wrongful termination High dollar claims are common Over 73% of claims facing companies today are from their own employees Going “bare” exposes an employer to a swift and costly end Most BOP products can add this coverage at a nominal charge

TWFG Commercial Business School – Commercial TWFG Commercial Business School Commercial 101 Fiduciary Liability Errors and omissions coverage regarding the administration of company sponsored retirement savings plans, health plans, pensions, etc.

TWFG Commercial Business School – Commercial TWFG Commercial Business School Commercial 101 Commercial Umbrella Provides excess liability over underlying policies Provides broader coverages than underlying policies Provides primary liability where not covered by underlying policies

TWFG Commercial Business School – Commercial TWFG Commercial Business School Commercial 101 ACORD Forms Overview Common elements Full entity name & mailing address Business phone number Type of entity Nature of business Years in business Loss Payees/ Mortgagees/Additional Insureds General information Prior insurance information Loss history

TWFG Commercial Business School – Commercial TWFG Commercial Business School Commercial 101 Submissions Checklist All Submissions Completed ACORD forms for each line 3 year hard copy loss runs Completed required supplemental applications

TWFG Commercial Business School – Commercial TWFG Commercial Business School Commercial 101 Property Specific Date of construction for each building Updates for buildings over 20 years old Construction type Square footage per building List of occupants for LRO Burglar & fire alarms Replacement cost

TWFG Commercial Business School – Commercial TWFG Commercial Business School Commercial 101 GL Specific Description of operations Payroll/Sales for each classification Answer all underwriting questions List of Additional Insureds, including relationship Special coverage requests

TWFG Commercial Business School – Commercial TWFG Commercial Business School Commercial 101 Auto Specific Lists of drivers, including DOBs & DLs Answer all underwriting questions Year/Make/Model & VIN per vehicle Cost new per unit if available Garaging address/use/=radius per unit Loss Payees/Lessors per unit if applicable

TWFG Commercial Business School – Commercial TWFG Commercial Business School Commercial 101 Workers Compensation Specific List of class codes/payroll/number of employees List of all locations Include Experience Mod worksheet FEIN and NCCI number if Mod worksheet is not provided Answer all underwriting questions

TWFG Commercial Business School – Commercial TWFG Commercial Business School Commercial 101 Inland Marine Specific Schedule items over $2500 Lump all items under $2500 to “Unscheduled Equipment” Loose Tools – Indicate max value per item, Usually $250. List sum as separate entry under “Unscheduled Items” Provide type/description/serial #/model/manufacturer/model year per item – becomes important in the event of a claim Most Contractors’ Equipment is insured at ACV- advise insured

TWFG Commercial Business School – Commercial TWFG Commercial Business School Commercial 101 Inland Marine Specific Continued Rented/Leased Equipment Total rent/lease receipts for last 12 months Value of highest value item expected to lease in next 12 months Total value of rented/leased equipment for next 12 months Average value of rented/leased equipment at any one time

TWFG Commercial Business School – Commercial TWFG Commercial Business School Commercial 101 Inland Marine Specific Equipment Security Equipment in locked building Equipment fenced Equipment in locked and lighted yard Etc

TWFG Commercial Business School – Commercial TWFG Commercial Business School Commercial 101 Post Binding Checklist Signed ACORD applications 3 years prior loss runs Signed UM/UIM rejections – Auto Signed Officers/Owners Exclusion – WC Complete any “Subject To” items

TWFG Commercial Business School – Commercial TWFG Commercial Business School Commercial 101

TWFG Commercial Business School – Commercial TWFG Commercial Business School Commercial 101

TWFG Commercial Business School – Commercial TWFG Commercial Business School Commercial 101 QUIZ

TWFG Commercial Business School – Commercial TWFG Commercial Business School Commercial Why is it Important to Fully Complete an ACORD Form?

TWFG Commercial Business School – Commercial TWFG Commercial Business School Commercial Why is it Important to Fully Complete an ACORD Form? Answer: To avoid delays in getting a quote.

TWFG Commercial Business School – Commercial TWFG Commercial Business School Commercial What is the difference between first party and third party coverage? Give an example of each.

TWFG Commercial Business School – Commercial TWFG Commercial Business School Commercial What is the difference between first party and third party coverage? Give an example of each. Answer: First party coverage applies to the insured. Example: Comprehensive coverage on an auto. Third party coverage benefits someone other than the insured, for acts committed by the insured. Example: Auto liability, which pays the other party.

TWFG Commercial Business School – Commercial TWFG Commercial Business School Commercial Name 3 types of commercial insurance polices.

TWFG Commercial Business School – Commercial TWFG Commercial Business School Commercial Name 3 types of commercial insurance polices. Answer: Commercial General liability (CGL), Commercial Property, Business Auto, Inland Marine, Workers Compensation, Professional Liability

TWFG Commercial Business School – Commercial TWFG Commercial Business School Commercial Define Completed Operations as it relates to the CGL. Give an example of a Completed Operations exposure.

TWFG Commercial Business School – Commercial TWFG Commercial Business School Commercial Define Completed Operations as it relates to the CGL. Give an example of a Completed Operations exposure. Answer: Completed operations relates to completed work done by the insured away from his/her premises. Example: Plumbing work done by a contactor at a residence. Once work is complete and the contractor leaves, any resulting loss from work performed would be a completed operations loss.

TWFG Commercial Business School – Commercial TWFG Commercial Business School Commercial 101 Future Classes February 7 th Commercial 102 February 14 th Commercial 103 February 21 st Commercial 104

TWFG Commercial Business School – Commercial TWFG Commercial Business School Commercial 101 Industry Segment Classes Retail & ServiceFarm/Ranch Artisan ContractorExcess & Surplus Commercial AutoProfessional Liability Workers CompensationUmbrella Commercial Real EstateBonds RestaurantFinancial Institutions ManufacturingHotels/Motels AgricultureMedical Technology

TWFG Commercial Business School – Commercial TWFG Commercial Business School Commercial 101 Questions???