Parker, Smith & Feek (PS&F) opened a dialogue with a large West Coast manufacturer whose principal plant is located just outside a high-hazard flood zone. The manufacturer faced several paramount flood issues.
First, the Army Corps of Engineers recommended decertification of the levies near the plant. This would leave it in a high-hazard zone. Second, the Army Corps of Engineers found breeches in the dam above the plant, further increasing the anxiety of many underwriters.
Despite spending several hundred thousand dollars to control the risk, coverage was still fragmented and expensive. The company had two towers of coverage, two different effective dates, placed with five different insurance companies over eight different policies. The fragmented structure led to gaps and overlaps of coverage as well as administrative nightmares. To make matters worse, a careful review of their property exposures revealed that they were woefully underinsured.
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