O P I N I O N
Keep tabs on your insurers in a difficult economy by reviewing evaluations by popular ratings agencies. How well is your firm protected?
I n addition to the health, safety, operational, and economic turmoil wrought by the COVID-19 pandemic, commercial property/casualty insurers in the U.S. and around the world have had to navigate large losses from a spate of natural disasters in recent years (i.e., the California fires), deteriorating loss experience in certain lines, and intense competition in others.
Historically, A.M. Best Company has been the most widely used source of ratings for insurers. A.M. Best’s letter rating provides an assessment of an insurer’s security; the Roman numeral refers to the insurer’s financial size. Together, the two “As design firms manage various aspects of their business in these difficult times, they need to be sure they work with financially sound insurers that can be counted on if and when they’re needed.”
With these issues converging to bring nearly unprecedented uncertainty as to the economy and financial stability of a wide swath of business, including insurance companies, AEC firms need to be especially diligent in choosing their insurers and monitoring their financial condition. Accordingly, it may be instructive to review how insurers are evaluated by popular ratings agencies in terms of financial security and claims-paying ability. This is relevant not just for the long-term viability of the AEC firms’ carriers to be “around” to pay for claims, but also for you to remain compliant with any contractual obligations that may require your firm to be insured by carriers with a minimum A. M. Best rating (typically “A-VII” or higher).
See ROB HUGHES, page 4
THE ZWEIG LETTER NOVEMBER 2, 2020, ISSUE 1366
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