Steve Coombs must be no less than nominated for membership into the Insurance coverage Nerds Corridor of Fame. He learn my put up, 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 Ebook with the late Don Malecki, as famous in The Builders Danger Ebook—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 danger insurance coverage for IRMI.com. He additionally coauthored, together with Donald S. Malecki, The Builders Danger Ebook.
Mr. Coombs has 45 years of business expertise, with the final 38 years in a consulting surroundings. He joined Danger Sources as president in 1992. Danger Sources is a danger administration and business insurance coverage consulting agency. Danger Sources doesn’t promote insurance coverage and gives consulting companies on a fee-for-service foundation. Widespread initiatives embody danger administration and insurance coverage audits, insurance coverage requests for proposals/proposal administration, agent/dealer choice, danger financing research, litigation help, and testimony.
Previous to becoming a member of Danger Sources, Mr. Coombs served as a danger administration advisor with a consulting agency. Previous to that, he spent 7 years creating his abilities as a nationwide accounts underwriter for a big worldwide insurance coverage group. He has in depth data and expertise relating to numerous features of building insurance coverage and is an writer 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 danger 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 contemplate the Holy Grail of insurance coverage certifications. Solely an Insurance coverage Nerd or insurance coverage tutorial masochist would return to get the inferior AIC designation 35 years later. Why?
Coombs has this commentary about “different insurance coverage” clauses in builders danger insurance policies, as famous in Chapter 11 of The Builders Danger Ebook:
Eradicate Different Insurance coverage Provisions in Builders Danger Insurance policies. Builders danger insurance policies have modified considerably over time. These insurance policies more and more are undertaking particular in nature and canopy a number of insureds. Having one other insurance coverage situation within the coverage relevant to the supposed beneficiaries of the insurance coverage defeats one of many objectives of builders danger 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 danger insurance coverage necessities contained in building 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 shouldn’t be allowed to be ‘extra insurance coverage.’ The required insurance coverage is to be major for all these events supposed to be protected by the coverage (i.e., the proprietor, basic contractor, and subcontractors). In any other case, why have insurance coverage necessities in any respect? An insurer imposing an ‘different insurance coverage’ clause in opposition to an insured get together below a builders danger coverage would probably put the sponsor of the coverage in breach of its obligations within the building 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 answer requests to remove or modify their respective clause(s). Slowly, the business is starting to acknowledge the conflicts and potential issues. Some insurance coverage brokers are paying consideration and, notably on giant initiatives, are negotiating particular provisions that expressly remove these potential issues.
My view is that Coombs is suggesting that the development insurance coverage business attempt to remove unnecessary 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 brilliant and well-meaning individuals within the insurance coverage claims business making an attempt to scale back disputes and get policyholders paid. The issue is that the variety of them and their tradition or angle appear to be a lot higher previously. There appears to be a brand new tradition that has subtle 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 printed way back by the insurance coverage business. In these, firm executives of yesteryears boasted concerning the swiftness with which they compensated their claimants. They painted footage of drained firm treasuries and the extraordinary efforts of their claims workers, 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. Modern insurance coverage firm cultures lean closely on price containment. Their prime focus? Limiting indemnity {dollars} disbursed to policyholders, managing allotted bills tied to a specific 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 inquisitive about additional treatise analysis relating to “different insurance coverage” and overlapping coverages, Coombs despatched a replica of a dialogue about these types from the first version of Property Loss Adjusting, printed in 1990, which is hooked up 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 change 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 might help you to see the forest and the timber; it’s a crucial step towards regaining some sense of accuracy, company, chance, and management within the scenario.
—Peter T. Coleman