A premier New York real estate developer was erecting a $1.1 billion, Class A office tower at a prestigious address in midtown Manhattan. Due to the complexity of the risks in the New York City construction arena and the high-profile nature of the project, they needed someone with deep knowledge and expertise in this area to help design the project's insurance program. The ALS Group was brought on board to work with the management team on the monumental task of designing the proper and most effective insurance coverage.
Working with the senior leadership team, it became apparent that the best way forward would be a Controlled Insurance Program ("CIP"). Upon further consideration, we determined that the type of CIP based on value and coverage, which would work best for our client would be a Contractor Controller Insurance Program ("CCIP"). This type of program would ensure that the project's Total Cost of Risk ("TCoR") remained competitive without any gap in coverage.
Based on our experience and the fact that this project is based in NYC, the market for this type of program is very limited as are the brokers who have the necessary expertise. To determine the best broker for a project of this size and scope, we conducted a Broker RFP, which includes our proprietary, customized blueprint and process; vetted the brokers who specialize in CCIP; and narrowed the field down to two finalists for additional discussions and negotiations. The most qualified broker was selected based on the ability to provide maximum coverage, the best transfer of risk, and the highest quality service for our client.
The structure of the risk management assessment and insurance program The ALS Group developed, implemented and continues to manage, is a combination of risk transfer techniques and safety/loss control initiatives. The coverage is being delivered seamlessly and will continue through all phases of construction and continue on to the occupancy phase.
The Situation & Issue: A large global client with expanding worldwide operations maintained a traditional, standalone property insurance policy. The company ships millions of dollars worth of equipment (stock) to its worldwide project sites and maintained a standalone cargo policy in addition to other policies. Policies were placed with different insurers, on different coverage forms with different deductibles. As a result the cost of both policies was increasing and premium savings difficult to achieve.
Situation & Issue: A current client, who is a large manufacturing company in NJ, received a significant invoice from their insurer for a retrospective premium adjustment on their Workers' Compensation program. The adjustment was paid by the client before our involvement and review. Retrospective premium plans are loss sensitive insurance programs in which carriers bill the insured for their losses. The adjustment involved an old policy year and the client much desired to close out the program and not deal with future adjustments and additional premiums.
The ALS Solution: ALS reviewed and analyzed the Retro Adjustment received from the carrier. We determined the additional premium was due a reserve increase for an occupational injury claim. We reviewed the claim file and discussed the details of the loss with the claim adjuster. Based upon the employee's last date of exposure to the hazardous condition, we determined the claim was coded to the wrong policy year. The insurer agreed with our assessment and the claim was moved to the correct policy year which happened to be on a guaranteed cost program (not loss sensitive).
The Result: We got the carrier to return a substantial portion to our client for which they previously charged for the claim and we had them "close out" the policy year due to no open claims.
Situation & Issue: A large Real Estate client of The ALS Group notified us that they were starting an office cleaning business and needed coverage within two weeks. The new company would have close to 200 employees (gained through an arrangement with a competitor).
After determining that the office cleaning exposure did not fit the client's current risk profile and insurance program, The ALS Group went into action to procure a separate insurance plan to ensure all needed coverage was obtained in time for the business to start operations.
The ALS Solution: The ALS Group quickly assessed the client's needs and worked to procure Package (General Liability and Property), Workers' Compensation, Umbrella, and Crime insurance policies. Each step of the placement process needed to be completed within a narrow time frame.
Situation & Issue: A large NYC private club invited The ALS Group to review and analyze its insurance program for coverage and pricing adequacy. The club is located in an historic building and contains a large Fine Arts collection.
The ALS Group performed an assessment of the club's current insurance and held discussions with the client to obtain educated insight into the Fine Arts exposure. The review revealed the current insurance program to be overpriced and that it provided inadequate coverage for the Fine Arts exposure.
The ALS Solution: In order to reduce costs for the club's coverage, The ALS Group worked with the client and broker to successfully produce the following changes:
Situation/Issue: A real estate management company with over 3,800 units was having issues with claims. They were being brought into lawsuits that involved vendors or contractors, as well as experiencing average claims resolution timeframes. This was negatively impacting their claims history and increasing their premiums upon renewal.
The ALS Solution: The ALS Group immediately addressed the indemnification requirements of vendors and contractors so the Company would be indemnified by the vendors going forward. The client's carrier needed to be protected from having to defend against suits arising out of vendor activity, and instead transfer responsibility to the vendor's insurance.
Situation & Issue: The ALS Group is engaged by one of the largest Plumbers in New York City, who has been in business for well over twenty-five years. Our role is to support the client in an out-sourced Risk Manager capacity. As they have grown, so have their exposures and propensity for General Liability claims. We wanted to take pro-active, hands on approach in getting our arms around the Liability.
The ALS Solution: There had been no movement by the adjuster or broker on any of the claims for years. Many of the claims had been open for years with high reserves, most of which there was little or no information on their status or progress thus far. The initial claims review meeting proved to be successful as we were able to identify claims we felt were erroneous, and reserves we felt were too high. However, there was still much more information to be uncovered on each claim.
We scheduled a follow-up claims review meeting, and worked with the broker and adjusters to uncover additional information, reduce reserves and close claims. Upon the arrival of our follow-up meeting we were able to achieve the following:
Situation & Issue: A NJ Real Estate investment firm with over 60 properties and approximately 3000 units engaged The ALS Group to review their current insurance portfolio and to provide strategic direction on their risk management program.
The ALS Group identified inefficiencies in cost and coverage in their current insurance program as well as finding many risks were under insured and there were exclusions within the existing policies. The firm was unaware of these exclusions.
The ALS Solution: The ALS team gathered an extensive amount of risk and underwriting information on the company. The Team became intimately knowledgeable of the Firm's operation and risk profile. The ALS Group put into place an aggressive timetable and expectations. The following results were achieved: