Case Study: Securing Professional Liability Coverage for a Real Estate Developer

Background

A real estate developer specializing in residential, commercial, mixed-use, and retail space projects needed professional liability coverage to address their unique exposures.

Challenges

• Comprehensive Coverage Needs: The developer required a policy that not only covered professional liability but also additional risks such as contingent bodily injury, property damage, and pollution, given the scale and diversity of their projects.
• Specialized Features: Other critical features needed included rectification costs, failure to maintain insurance for property management, copyright and trademark coverage, and a deductible credit for voluntary mediation.
• Partnership Structure Consideration: The policy needed to ensure that the Insured vs. Insured exclusion did not apply to investors, which was crucial for the developer’s partnership structure.

Solution

Our brokerage team, leveraging their relationship with a wholesale-only carrier, secured a customized policy that addressed all these exposures. The policy provided a $3 million limit with a $50K retention, offering the developer essential protections and flexibility to manage their risk.

Coverage Highlights:

• Contingent Bodily Injury and Property Damage: Covered potential claims from third-party injuries or property damage linked to their development projects.
• Pollution Coverage: Essential for environmental risks, particularly in mixed-use and commercial developments.
• Rectification Costs: Protected the developer against the additional costs of fixing errors or omissions before third-party claims arose.
• Deductible Credit for Voluntary Mediation: Provided financial incentives to resolve disputes through mediation, reducing potential litigation costs.
• Failure to Maintain Insurance: Covered claims arising from property managers failing to maintain adequate insurance.
• Insured vs. Insured Exclusion Exception: Allowed coverage for claims between the developer and their investors, vital for internal disputes.
• Copyright and Trademark Coverage: Protected against intellectual property disputes arising from branding and marketing activities.

Result

Thanks to our ability to work with a wholesale-only carrier and secure tailored coverage, the retail agent successfully won the business. The $48K premium for the $3M limit was highly competitive. This premium provided the developer with the necessary coverage for their complex projects while allowing the agent to offer a superior product that met all client needs.

This case demonstrates the value of Wholesale 3.0, where enhanced service levels and specialized coverage deliver results that help agents stand out in competitive markets.