When the National Assn. of Professional Insurance Agents (PIA) was formed in 1931, one of its major selling points was that it offered members E&O coverage. Fast forward 80 years, and PIA's latest agency E&O offering seems like the natural evolution of that original idea.
Introduced last September, PIAPRO, the PIA Professional Liability Insurance Co., is a risk retention group for agent E&O—exclusively owned and controlled by and for PIA members.
With up to about 100 policies in force, PIAPRO, an A-rated admitted program offered by Argo Group and underwritten by Argonaut Midwest Insurance Co. and Argonaut Insurance Co., offers agents stability and availability in a rapidly changing market.
"Insurance agents are professionals, like doctors and lawyers," said Andrew C. Harris, PIA National's incoming president. "Doctors and lawyers have RRGs and the ability to control their own destinies. We thought that it would be good for our members to put together a similar program."
Read related: "Parental Advisory."
Currently limited to availability in 10 states and licensed with Argo Group in all others, the program's growth is controlled by PIA to ensure solid pricing and stability, said Fred Thomas, former national PIA president. "Although the agency E&O marketplace is still competitive, we want to make sure we're there and stable, and can supply capacity when the market becomes harder," he said.
The program is also available to new agents, who sometimes have difficulty getting E&O coverage in the standard market. The typical target is the smaller agency with between one to five employees.
Besides the element of ownership, PIAPRO is unique in that the policy terms were designed by PIA members, Thomas said.
Policy highlights include:
- Pay on behalf of contract
- Consent to settle does not include a "hammer clause" and includes a peer review option
- Claims expense allowance is outside of policy limits, subject to cap
- Broad definition of "insured"
- Broad definition of "professional services" that includes activities like consulting, an instructor of insurance related subjects, insurance expert witness, and others insurance activities
- Deductible reduction for the use of mediation
- Pay no more than two deductibles in a policy year
- Offering a Standard and Enhanced policy
- Some reimbursement outside of limits and not subject to the deductible for loss of earnings while attending a trial, hearing, arbitration proceeding or regulatory proceeding concerning a covered claim
- Some expense reimbursement outside of limits and not subject to the deductible for attorney fees and expenses while attending regulatory proceedings.
Although PIAPRO has yet to process a claim, the program promises to be aggressive in that area, Harris said. "Claims won't be handled like a typical E&O," he said. "An allegation against an agent or office that they didn't do something right is a personal affair. In claims handling, we'll jump in with a different attitude, listening to the agency about what happened and investigating more thoroughly."
Ideally, PIAPRO will generate 25 to 50 new policies a month, for a total of 300 to 600 new policies a year, Harris said. "But we want to keep it solid as a rock, to continue its A rating and continuity of program. We don't want to grow too much or too fast."
For more information, go to pia-pro.com.
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