To the insured, simplicity and flexibility is everything
The management liability business has grown unnecessarily complicated, and there is a unique opportunity for simplified offerings.
All businesses are exposed to management liability risks. Whether operating a private or public company, or not-for-profit organization, business owners must have a comprehensive understanding of what is included in their insurance policies to ensure they are covered for an array of challenges.
The management liability business has grown unnecessarily complicated. There is a unique market opportunity for simplified product offerings that use more conversational and easy to understand language.
The insurance industry is increasingly working to keep up with consumers’ on-demand lifestyle. People want to obtain information quickly, in a short format that they can understand. One way the industry is reacting to this problem is by shifting the structure of insurance policies towards a modular approach. This practice is beneficial for buyers as policies are compartmentalized by line of coverage, making terms easier to understand as well as allowing for simple and streamlined updates for agents and brokers.
The benefits of adopting a modular approach to management liability policies are smart. CNA recently updated its modular platform, Epack 3, as a direct result of feedback from agents and brokers. By working together with agent and broker partners, CNA was able to create a simplified product that is not only more user-friendly but also ensures the product change will not disrupt the current workflow.
The major changes that were made to the platform, which have been widely received are:
- Streamlined language to make the policy more conversational and easier to understand by cutting legalese.
- Simplified and condensed the general terms and conditions and compartmentalized each line of coverage (i.e. D&O, EPL) making navigating the policy simple and improving readability.
- Eliminated repetition throughout the policy dramatically reducing the overall word count.
In addition, Epack 3’s updated policy offers six optional coverage parts: directors and officers liability, employment practices liability, fiduciary liability, crime, kidnap, ransom and extortion, and nonprofit directors and officers liability. The policy is now available in 48 states.
Looking into 2020 and beyond, this modular approach could be used for other policies as it makes doing business with carriers easier. When looking at the future of the management liability space specifically, we encourage leaders of small businesses and nonprofit organizations to educate themselves on their risk exposures. From claims data, we know that no business is too small or too philanthropic to be immune to management liability risks.
Paul Larson serves as senior vice president for financial lines underwriting, including financial institutions, management liability, cyber and miscellaneous professional liability lines of business, at CNA.
Views expressed here are the author’s own.
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