September 24, 2010

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Question:

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Ken-

    I have been trying to educate myself about the Security America RRG program since we joined the ESA.  Since I’m “just a tech” I rely on my staff to keep us steered in the right direction. The latest exchange between Chuck, Bart and Cheryl was interesting to the point that I forwarded it to my head bean-counter for comment.  She responded with what sounds like very valid concerns which I’ve pasted below:

    FYI – SARRG is strictly a business General Liability insurer – they have a B+  A.M. Best rating which would have disqualified us from jobs such as the ****** Fire Station – ***** Bank –***** @ Snoqualmie & *****’s all of which required an A or A+ rated company. It would also disqualify us from doing any work with government entities such as the (federally funded) job, or the (another fed) job that we are bidding on. They also provide only blanket certificate holder coverage they do not provide blanket additional insured certificates, which all General contractors require. Each certificate is an extra $25 to $75 depending on the verbiage required by the contractor.

    They are great if you are just slapping in Security systems like ADT, or installing structured cabling / Audio / Video & Access Control. Not quite so with Fire & CCTV.

    SARRG being strictly a G/L company also does not cover Fleet Auto / Property / Inland Marine & Completed Operations. This now means getting a separate quote from a different company, Fleet Auto would be easy, but trying to wrap Property / Inland Marine & Completed Operations without the General Liability Portion would be costly, so what you will save in G/L premiums will be lost in the cost of the other coverages.

    Thanks again for your very informative newsletter. You’ve convinced me that it’s time to update our contracts, and I’ll be calling!

Tom

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Answer:

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Ken,

    To start, SARRG is a B++ Am Best rated insurer (not B+) there is a difference.

    It is true that some entities do require A rated paper in their contracts, and that would include the federal government.  However, often after an explanation of the cost difference in getting A rated paper, and also the explanation of SARRG being backed by Lloyds of London which is A rated, we are able to overcome these contractual requirements. You would be surprised how far a little conversation can go.

    I do not understand the comment about the certificate.  Rather than try to unravel that mess, I will explain it simply:

    SARRG never charges for certificates.  Not $25, Not $75, Not anything.

    SARRG has 24 hour turnaround on certificates and we issue upwards of 10,000 certs a year and most have special language, including additional insured status.

    Our certificate procedures and flexibility are one of the signature benefits of SARRG over other insurers.

    SARRG is limited to writing only GL / E&O by federal statute and that GL includes completed operations.  However, we have access to numerous other A rated insurers who are overjoyed at the thought of not writing the risky and difficult GL / E&O and partnering with us to write the less risky, fairly mainstream package, property, inland marine, auto and workers’ compensation – and often at a substantial discount.

    Finally, I will close with this thought. From SARRG you will always get a competent attorney that has a real practice and not someone from the looser lawyer pool in the basement of your carrier, who only has the interests of the carrier in mind. And you will get a claims manager that knows the difference between a reed switch, prox card reader and riser cable to defend your rights to exercise your contract when you did nothing wrong or grossly negligent. So if you don’t ask the general contractor or the specify’er if you can deviate the slightest from their requests, you will continue to buy insurance and pay more for less.  

Bart A. Didden

Executive Claims Manager

Security America Risk Retention Group – SARRG