Steve Coombs must be not less than nominated for membership into the Insurance coverage Nerds Corridor of Fame. He learn my submit, What Is an “Different Insurance coverage” Clause and Why Do They Exist In Property Insurance coverage Insurance policies? and despatched Mara Essick and me quite a few articles about “different insurance coverage” clauses. Steve Coombs co-authored The Builders Danger Guide with the late Don Malecki, as famous in The Builders Danger Guide—A Nice Reference Supply For These Concerned With Builders Danger Insurance coverage and Protection Points. His biography on IRMI notes the next:
Mr. Coombs writes on builders threat insurance coverage for IRMI.com. He additionally coauthored, together with Donald S. Malecki, The Builders Danger Guide.
Mr. Coombs has 45 years of trade expertise, with the final 38 years in a consulting surroundings. He joined Danger Sources as president in 1992. Danger Sources is a threat administration and industrial insurance coverage consulting agency. Danger Sources doesn’t promote insurance coverage and gives consulting companies on a fee-for-service foundation. Frequent tasks embody threat administration and insurance coverage audits, insurance coverage requests for proposals/proposal administration, agent/dealer choice, threat financing research, litigation assist, and testimony.
Previous to becoming a member of Danger Sources, Mr. Coombs served as a threat administration marketing consultant with a consulting agency. Previous to that, he spent 7 years creating his expertise as a nationwide accounts underwriter for a big worldwide insurance coverage group. He has in depth data and expertise concerning varied features of development insurance coverage and is an creator and speaker. He’s additionally a former president of the Society of Danger Administration Consultants.
Mr. Coombs is a graduate of Western Michigan College with a bachelor of enterprise administration diploma. He additionally holds a grasp of arts diploma from DePaul College with a focus in threat administration and insurance coverage. He has earned the Affiliate in Danger Administration (ARM) and Affiliate in Claims (AIC) certificates from the Insurance coverage Institute of America and has acquired the Chartered Property Casualty Underwriter (CPCU) designation.
One quizzical certification of his spectacular CV is an Affiliate of Claims (AIC) designation that he acquired in 2021. He already had a CPCU designation obtained in 1986, which most take into account the Holy Grail of insurance coverage certifications. Solely an Insurance coverage Nerd or insurance coverage educational masochist would return to get the inferior AIC designation 35 years later. Why?
Coombs has this statement about “different insurance coverage” clauses in builders threat insurance policies, as famous in Chapter 11 of The Builders Danger Guide:
Remove Different Insurance coverage Provisions in Builders Danger Insurance policies. Builders threat insurance policies have modified considerably over time. These insurance policies more and more are mission particular in nature and canopy a number of insureds. Having one other insurance coverage situation within the coverage relevant to the meant beneficiaries of the insurance coverage defeats one of many targets of builders threat insurance coverage: a single coverage that reduces litigation between the stakeholders and gives funds to restore the broken property on a well timed foundation.
One other argument for eliminating different insurance coverage clauses is the builders threat insurance coverage necessities contained in development contracts. The standardized contracts from the main suppliers—the American Institute of Architects, ConsensusDocs LLC, Engineers Joint Contract Paperwork Committee, and Design-Construct Institute of America—require both the proprietor or the contractor to supply the insurance coverage. Such insurance coverage isn’t allowed to be ‘extra insurance coverage.’ The required insurance coverage is to be main for all these events meant to be protected by the coverage (i.e., the proprietor, common contractor, and subcontractors). In any other case, why have insurance coverage necessities in any respect? An insurer implementing an ‘different insurance coverage’ clause towards an insured celebration underneath a builders threat coverage would more than likely put the sponsor of the coverage in breach of its obligations within the development contract. The opposite insurance coverage situation is such a longstanding a part of property and inland marine insurance policies that underwriters typically have no idea how to reply to requests to remove or modify their respective clause(s). Slowly, the trade is starting to acknowledge the conflicts and potential issues. Some insurance coverage brokers are paying consideration and, notably on giant tasks, are negotiating particular provisions that expressly remove these potential issues.
My view is that Coombs is suggesting that the development insurance coverage trade attempt to remove useless disputes attributable to “different insurance coverage” clauses. This was the identical function for The Guiding Ideas as famous in Overlapping Insurance coverage and Different Insurance coverage Clauses—The Guiding Ideas.
There are very shiny and well-meaning individuals within the insurance coverage claims trade attempting to cut back disputes and get policyholders paid. The issue is that the variety of them and their tradition or angle appear to be a lot larger prior to now. There appears to be a brand new tradition that has refined management guiding property claims departments, as referenced in Why the Property Insurance coverage Business Is Dominated by Bean Counters —Why Is Your Hurricane Ian Declare Underpaid and Delayed:
Our regulation agency library is brimming with insurance coverage firm chronicles from books revealed way back by the insurance coverage trade. In these, firm executives of yesteryears boasted in regards to the swiftness with which they compensated their claimants. They painted photos of drained firm treasuries and the extraordinary efforts of their claims employees, working extra time to make sure immediate funds. These tales typically shined a light-weight on a enterprise ethic that put the policyholder first.
Quick ahead to right now, and the narrative has shifted dramatically. Up to date insurance coverage firm cultures lean closely on value containment. Their prime focus? Limiting indemnity {dollars} disbursed to policyholders, managing allotted bills tied to a selected declare, and overseeing unallocated bills important for working their claims departments. It is a stark distinction to the customer-focused ethos of the previous.
For these excited about additional treatise analysis concerning “different insurance coverage” and overlapping coverages, Coombs despatched a replica of a dialogue about these types from the first version of Property Loss Adjusting, revealed in 1990, which is connected in your examine.
Thought For The Day
When you end up caught in an oversimplified polarized battle, a helpful first step is to attempt to develop into extra conscious of the system as a complete: to supply extra context to your understanding of the terrain through which the stakeholders are embedded, whether or not they’re disputants, mediators, negotiators, legal professionals, or different third events. This will help you to see the forest and the timber; it’s a essential step towards regaining some sense of accuracy, company, chance, and management within the scenario.
—Peter T. Coleman