In spite of softening pricing conditions over much of theproperty-casualty market, specialty market participants continue togrow their top lines through innovation--with new product offeringsand coverage improvements.

Some product enhancements announced in recent monthsinclude:

o Increased Terrorism Capacity:

Earlier this month, Lexington Insurance Company--a membercompany of American International Group Inc.--announced it hadincreased its capacity of commercial domestic property terrorisminsurance to $250 million, more than double the prior $100million.

Lexington's increased capacity is available for commercialproperty with extended business exposures, including centralbusiness districts. The $250 million in capacity will be availablenot only for commercial buildings, but also for municipalities,retail spaces, office buildings and hotels as well. The newcapacity is available for stand-alone and embedded coverages.

For more information, contact George Stratts, division executiveand executive vice president of Lexington Insurance, [email protected].

o Early EPL Claim Reporting Incentive Endorsement:

Early in February, The Chubb Group of Insurance Companies inWarren, N.J., rolled out an optional endorsement for employmentpractices liability policies that provides customers with a 10percent reduction (up to $50,000) in their deductible if theynotify Chubb within 15 business days of an employmentclaim--including administrative charges filed with the EqualEmployment Opportunity Commission.

The reduction is available for each claim reported during thepolicy period.

"Almost 80,000 charges are filed with the EEOC annually [and]some EPL policyholders may not realize that each of these chargesis an employment practices liability claim," Catherine Padalino,worldwide EPL product manager, said in a statement announcing theendorsement.

"If a company fails to report an EEOC charge in a timelymanner..., the insurer may deny the claim due to latenotification," she continued, noting that by encouraging earlyreporting of claims, Chubb not only helps eliminate that problem,"but can save our customers money as well as help them mitigatepotential litigation costs and reputational damage."

o Investment Banking Engagement Insurance:

In January, AIG's National Union Fire Insurance Company ofPittsburgh, Pa., announced the launch of Investment BankingEngagement Insurance--a new type of professional liability policyfor investment banks to insure a specific transaction againsterrors and omissions claims.

National Union said the policy can be used for any type ofinvestment banking engagement, including raising equity and debt inthe capital markets, as well as providing advisory services formergers and acquisitions.

"Currently, market capacity for E&O coverage for theinvestment banking community is very limited, despite strongdemand," said Scott A. Meyer, president of National Union FinancialInstitutions Group.

The transaction-based approach can allow midtier banks, whichmay be very vulnerable to an adverse E&O event, to securecustomized coverage, the company said. Limits of up to $25 millionare available.

o Liability Coverage For Computer-Intensive Businesses:

In late January, Chicago-based CNA announced the launch ofNetProtect Essential--an insurance product providing liabilitycoverage for privacy and identity theft, along with a range ofother network security-related exposures.

Targeted to small- and midsized companies, NetProtect Essentialcovers all network resident information enterprisewide, not justWeb sites, CNA said in a statement.

The policy responds if there is a security breach resulting inidentity theft or disclosure of private information, damageresulting from viruses, inability to access a network or rely oninformation. It also covers unauthorized acquisition of tradesecrets and proprietary or confidential information from theinsured's network.

NetProtect Essential is admitted coverage that applies worldwideand is currently approved in 40 states.

Available with limits up to $2 million, it is designed forU.S.-domiciled businesses that typically generate gross revenues ofless than $100 million in various industries, including financialservices, health care and life sciences, retail, manufacturing,construction, hospitality, telecommunication and technology.

"For more than a year, privacy breaches and identity theft havemade national headlines," said John Wurzler, vice president, CNA'sTechnology Commercial segment, in a statement, noting that coveragefor related exposures has generally been out of reach or tooexpensive for all but the largest companies.

o Revamped Lawyers Professional Coverage:

In mid-January, Deerfield, Ill.-based Shand Morahan &Company Inc., underwriting manager of Evanston Insurance Company,announced the launch of a revamped Lawyers Professional Liabilityprogram.

The program is now called Designed Protection for Law Firms.

Targeting hard-to-place attorneys and law firms, the updatedprogram features a new, more competitive policy form andapplication, as well as the addition of three risk managementenhancements.

The risk management components, which are available at no chargeto policyholders are:

o A confidential telephone hotline that is staffed by a panel ofattorneys with expertise in risk management for the legalprofession, and defense of lawyers' professional liability claimsand ethics-related state bar disciplinary proceedings.

o A lawyers' risk management guide detailing 80 core riskmanagement strategies specifically targeted to law firms andattorneys.

o A professional practices guide that is applicable to a widerange of nonmedical professionals. The guide is comprised of 230strategies across a broad array of 75 different high-impact topicsthat include claims mitigation, client relations, marketing andfirm profitability.

o Network/Privacy Protection For Health Care Organizations:

In mid-December, Farmington, Conn.-based Darwin ProfessionalUnderwriters Inc announced the expansion of Tech//404--a liabilityproduct for health care organizations--in response to increasingexposure to network security and data privacy losses.

Tech//404 for health care organizations addresses the exposuresof both technology and enterprise information risk in a single,comprehensive insurance policy, the company said.

Explaining the need for the coverage, Darwin PRO said that withthe introduction of electronic medical records and software-enabledmedical care, hospitals are becoming their own data warehouses witha much greater sensitivity to network intrusions andinterruptions.

In a statement, Drew Bartkiewicz, assistant vice president andlead underwriter for Darwin's technology and information liabilitygroup, pointed out that the product is designed to protectcompanies from exposures like the Sept. 6, 2006 security breach atAkron Children's Hospital in Ohio during which files of some230,000 patients were accessed and sensitive information, includingSocial Security numbers and bank account records, were stolen.

Liability relating to network outages and regulatory violationsfor data privacy are also contemplated in Darwin's Tech//404program.

The program covers:

o Notification expenses under regulatory requirement to warn ofsecurity breaches.

o Fines, fees or penalties arising from privacy or consumerprotection errors.

o Errors and omissions for delivery of technology professionalservices.

o Network security protection, unauthorized access and rogueemployee coverage.

o Breach of privacy, including third-party liabilities.

o Malicious code, cyber-attacks and inadvertent transmission ofviruses.

o Optional contingent bodily injury, crisis management expenseand cyber extortion.

Businesses eligible for Tech//404 for health care organizationsinclude: ambulatory surgery centers, health care data processors,health care software providers, image delivery systems, long-termcare facilities, physicians groups, hospitals, managed careorganizations, third-party administrators, pharmacy deliverysystems and others.