News

Does anyone out there really understand how the turmoil in Greece could topple the economies of Europe?  While I love feta cheese and gyros I know very little else about Greece or its problems.  I take that back – I did have the opportunity to hear Michael Lewis speak at NAPSLO last year. You may not be familiar with Lewis, but you do know his work.  He is the author of several best-selling books including Moneyball and The Blind Side which were both made into major motion pictures. After working on Wall Street, he went on to write several exposés on the financial markets.  His latest book is Boomerang: Travels in the New Third World which delves into the European debt crisis.

 

According to Lewis, the Greek government ran up huge debts by over-paying for government jobs and creating an overly generous pension system.  I guess it makes sense that Greek citizens are protesting in the streets if terms of the bail-out include no more retirement at age 55 on the government-backed pension and no more government jobs that pay 3 times what the same private sector job pays.  It is all very complicated - much more so than what I have to say here.  But what I do know is you cannot dig yourself out of a hole – more digging just means a deeper hole.  You have to fill the hole to get out - and it takes more than one shovelful at that. 

 

Thankfully, insurance makes a lot more sense to me. There are times when insurance can appear to be complicated for the average consumer and that is when insurance professionals like you and I can serve our customers.  We make it easier for customers to make important choices for the right reasons - not just the decision that feels good today. 

 

However, even seasoned insurance people are scratching their heads at some of the recent changes in the interpretation of the CGL policy.  Not too long ago, the PA Supreme Court ruled that a subcontractor’s faulty work and the consequential damages of faulty work are not covered.  I am referring to Kvaerner Metals v. Commercial Union and Millers Capital v. Gambone Brothers.  As a result of these 2 court cases, we now have a pretty large gap in the intended coverage of the CGL policy.  All of a sudden, we have a Greek-style crisis – “Whadda ya mean there’s no coverage?”  and you and I may be in a hole of the courts making.  What should you do? You should know if your carriers have added this coverage back to their policies via endorsement and understand exactly what they have attempted to correct (the definition of occurrence and/or the clarification of an insured’s faulty workmanship.) 

At Tuscano, we are working with our carriers to fill this coverage gap as should any of the brokerage markets you deal with.  The IA&B has assembled some excellent analysis of the issue and I would recommend you start there.

It’s what I love about this business - I learn something new every day!