Fully Integrated Insurance Solutions

Agenda

Identify

Determine

Explain

Gaps in General Liability Coverage

In the definition of property damage, intangible

property is not included. Claims arising out of

damage to and/or loss of use of intangible

property are not covered.

The impaired property exclusion excludes

property damage to property that has not been

physically injured arising out of a defect in

your product or a delay or failure to perform a

Property Damage means:

“… physical injury to tangible property including the

resulting loss of use of that property;…

loss of use of tangible property that is not physically

injured…

Damage to Impaired Property Exclusion

BUT… what constitutes insured “property damage” is modified by the

Impaired Property exclusion:

This insurance does not apply to property damage to:

– impaired property; or

– property that has not been physically injured; arising out of any:

– defect, deficiency, inadequacy, or dangerous condition in your product or

your work; or

– delay or failure by you or anyone acting on your behalf to perform a contract or agreement in accordance with its terms and conditions.

This exclusion does not apply to the loss of use of other

Impaired Property means:

Tangible property, other than your product or your work, that cannot be used or is less useful because:

– it incorporates your product or your work that is known or thought to be defective, deficient, inadequate or dangerous; or

– you have failed to fulfill the terms or conditions of a contract or agreement;

if such property can be restored to use by:

– the repair, replacement, adjustment or removal of your product or

your work; or

Errors & Omissions

• Damage to or loss of use of intangible property

• Breach of contract

• Failure of your product to perform due to a defect, deficiency…

Errors & Omissions Coverage Grant

We will pay loss by reason of liability imposed by law for financial injury caused by a wrongful act.

Coverage applies only to such financial injury resulting from:

A. a defect, deficiency, inadequacy or dangerous condition in:

1. your product; or 2. your service; or

B. the failure:

1. of your product to perform; or 2. to perform your service;

Definition of Loss means:

damages

that the

insured

becomes legally

obligated to pay; and

claim adjustment expenses

related to a

claim

we

investigate or settle, or a suit, to which this

Wrongful Act means:

an error, unintentional omission or negligent

act.

Financial Injury means:

economic injury sustained by a person or

organization because their property, including

software, data and other information that is in

electronic form:

•

cannot be used; or

Your Product means:

Goods or products (other than real property)

manufactured, sold, handled, or distributed by you… Containers (other than vehicles) materials, parts or equipment furnished in connection with such goods or products or your service

Including:

– Reps and warranties made with respect to the fitness, performance, quality or use of your product;

– The providing of or failure to provide instructions or warnings in connection with your product; and

Your Service means:

Services (including related consulting, staffing, training, and other support services) performed by

You or on your behalf; or

A person or organization whose assets or business you have acquired

Includes:

– Reps and warranties made with respect to fitness, performance, quality or use of your service; and

General Liability and E & O

GL

E&O

• Damage to or loss of use of intangible property

• Breach of contract

• Failure of your product to perform due to a defect, deficiency

Target Market

Supports Chubb’s Commercial (CIS) package appetite

Focuses on companies that design, develop, and manufacture products, as well as those that provide services to others

Is well-established & financially stable with revenues greater than $5,000,000

Relies on excellent quality control, inspection and product development processes

Employs strong contract management protocols

Classes Outside Target Market

Outside Chubb Target Market

Accounting & Actuarial services Architecture, engineering or surveying, including design, build or construction mgt. services

Healthcare, medical or veterinary services

Social services & counseling Educational, teaching or child care services

Funeral or mortuary services

Outside CIS Product Target but Within ChubbPro Target

(MPL Policy Form)

Real Estate, property

development & management Advertising Agencies

Management Services Public Relations Services Management & Business Consultants

Travel services Security Guards

Lawyers and Legal Services Appraisal and inspection

Product Summary

Not industry specific -- replaces old E&O forms

Claims made & reported trigger with defense within limits in a single tower

For printers, an occurrence form and printing correction expenses protection are available

Broad definition of “your product” and “your service” Protection for wrongful acts by or on behalf of the

insured

Product Summary

Notice of circumstances condition can preserve insurance for adverse circumstances

Requested incurred expenses and pre- and post- judgment interest are supplementary payments Three-year extended reporting period available $5,000 minimum premium for $1million limit Starting Deductible of $10,000

Why your clients should buy E&O?

Expanded service offerings

Well-written contracts are still subject to legal

attack

Lawsuits must be defended

Contractual requirements

Corporate governance

Who is at risk?

Companies that:

Manufacture, assemble, installation &

maintenance

Provide design work

Select raw material for others

Provide services, advice or instruction to others

for a fee

Subcontract work

Keys to Selling E&O

Develop understanding and knowledge of E&O

Create demand

Demonstrate E&O gap for all companies

Explain and sell need

Process

Complete Chubb E&O Application

Email address:

[email protected]

or

Loss Examples

Loss Example - Manufacturing

The insured manufactured auto parts out

of the wrong metal. The customer used

these parts and discovered the mistake

after three weeks of production. The

Loss Example - Plastics

The insured extrudes plastic parts. A batch

was run for a customer. After delivery, it was

determined that the plastic parts were not

Loss Example - Training Services

The insured is providing training services

and fails to perform the services stipulated

in the contract with

Next Scheduled Presentation

This presentation is for informational purposes only and is necessarily general in content and descriptive only. Actual

coverage is subject to the language of the policies as issued. No liability is assumed by reason of the information this document contains.

Chubb refers to the insurers of the Chubb Group of Insurance Companies. Coverage may not be available in all jurisdictions. This presentation is the property of Chubb. Any use of this