Where capacity is tightening in general liability lines

In general liability lines, where pricing and competition are still healthy, brokers are more likely to notice windows of opportunity that are now starting to close – particularly in the hot tar and hospitality lines.

“Competition is out there, capacity is still out there, and a lot of markets are still quoting on the types of risks we see,” reports Tyson Peel, national property and casualty manager at Burns & Wilcox Canada. “But we are just starting to see the trend of a few specific operations or classes of business turn a little bit hard, which might see companies trend different ways on the premium.”

One specific example is hot tar, or torch work on a roof. The Toronto Star reported an incident in April 2018 in which two eight-year-boys in a Toronto school were sent to hospital after hot tar fell through the school roof and burned them while they were in gym class.

Peel says it has become extremely difficult for brokers to get capacity or pricing on these types of accounts, and the Lloyd’s market is starting to clamp down on writing these types of risks.

“I think it’s a culmination of larger losses that they’ve picked up throughout the past year,” Peel says. “For example, we’ve had renewal premiums on accounts with $10 million limits at $30,000, and the market comes back and says, ‘The max I can give you is $2 million, and now it’s $100,000 [premium].’ It’s a big change and an eye-opener for that class of business.”

Hospitality is another rough one. Capacity is drying up for night clubs, bars, restaurants and lounges. Common claims liability exposures include failure to request ID, activity hazards (bar fights, falling off mechanical bulls or bar stools, etc.), blocked or malfunctioning exits, flammable decorations, or – the big one – over-serving customers.

“I know they are all ‘smart serve,’ and they all like to say they all do that, but I think everyone can attest to going to a bar and seeing over-serving happening all the time,” Peel says. “Clients want to continue the business, but they want to be responsible. It’s a fine balance they have to walk.”

David Gambrill