Is there an accord form or do you have a letter for client rejection of coverage?

Feb 18, 2019

  1. wornout
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    wornout Expert

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    Hello! I have a client making a big mistake in declining a quote I offered at renewal. Against my strong advice and they are going to take an exclusion for some of their products on their product liability policy. The exclusion will save them substantially in premiums but I don't think it is wise. But, it is something they feel they can't afford. However, a lawsuit regarding the excluded products will definitely run them out of business.

    That being said, she wants to bind the policy today (the other expires tonight and she dragged her feet), but I want her to sign something stating she is rejecting the coverage. Is there a specific form to use when there is a policy specific exclusion?
     
    wornout, Feb 18, 2019
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  2. WolfpackAgent
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    I don't know if there is a specific form, but when I run into cases like this I might have them sign a letter to the effect of "I have been offered XXXX coverage (opt. for XXXX premium) by my agent, who has explained the coverage and encouraged me to take it. I choose to reject said coverage." If there is something standard I'd go for that, but this would be better than nothing.
     
  3. Markthebroker
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    I do the same as WolfpackAgent. I find a letter is sufficient for CYA, at least in my opinion. You now have it in writing which is really what you want. In general, I only use acord forms when I have to.
     
  4. VolAgent
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    If you're going to go the CYA route, you better make sure to cut off the, "I didn't know what I was signing route."

    Make they write out in their own handwriting a statement saying that they were offered this coverage, they understand they are rejecting it, they will have no coverage, and it could mean potential bankruptcy for the company and them personally by rejecting it.
     
    VolAgent, Feb 18, 2019
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  5. wornout
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    Thank you all!
     
    wornout, Feb 18, 2019
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  6. Markthebroker
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    Volagent, I like the idea, but I would be nervous about getting them to ACTUALLY fill that out...
     
  7. VolAgent
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    No signed form, no bound policy. Plain and simple.

    In reality, this is something to walk away from. Since the premium is large, it would suggest the exposure is large. When it goes south, it may well take quite a few people with it.
     
    VolAgent, Feb 18, 2019
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  8. Markthebroker
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    VolAgent, I have, and will continue to have clients sign forms like this. What I was asking about was your suggestion of having them FILL OUT the waiver by hand themselves. Have you ever gotten someone to do that? It seems like a lot to ask and bordering on unreasonable.
     
  9. VolAgent
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    I'm not doing much insurance of late and I never really did commercial. But I have gotten people to send me stuff of this nature before. Generally very little pushback when they want it.

    And I'm not talking something elaborate.

    I, VolAgent, President/Owner/CEO of We Make Stuff, Inc. acknowledge that I was offered product liability coverage for Products X, Y and Z. The quote was 1 MILLION DOLLARS. I am rejecting this coverage. I understand there will be no coverage related to product liability for these products and I understand a claim could lead to both corporate and personal bankruptcy.

    Signed,
    VolAgent

    If they won't write that out and sign it, then you should walk away. That isn't anything special there, but it is them acknowledging and owning the lack of coverage in no uncertain terms.
     
    VolAgent, Feb 18, 2019
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  10. adjusterjack
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    I agree with VolAgent's format. I would also staple a copy of the rejection to the top of the policy when delivered and send a copy to your underwriter for insertion into the company's policy records. If there ever is a claim on one of those products, provide a copy to the claim rep when the claim is filed.
     
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