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BOP Pricing Continues Upswing

 New Cell Phone Law

January 24, 2013

BOP Pricing Continues Upswing

Coverage for tech and health care risks are expanding; fracking is an emerging issue.

Insurance price increases might not be welcome news for small business owners who continue to be sour on the economy—88% think the economy is on the wrong track, according to a recent U.S. Chamber of Commerce Small Business Outlook Survey. But a bigger coverage price tag is the news independent agents will have to deliver to small business clients this year.

Industry watchers say they expect 2013 to look a lot like 2012 in terms of businessowners policy pricing increases.

“It’s well documented that BOPs are going up single digit [percentages] to a bit higher,” says Benedikt Sander, senior vice president of Liberty Mutual Commercial Insurance. “It’s a broad trend across the industry, and I don’t think it is going to recede.”

Michael Keane, president of small commercial at The Hanover Insurance Group, agrees and says he expects price increases to continue through the end of the year, driven both by geography and by line of business performance.

“Some companies will take a broad-based approach to price increases not accounting for good performance by class, but there will be some carriers that will take a more reasoned approach,” he says.

Dan Gaynor, head of commercial lines for The Main Street America Group, says for some carriers, there might be reinsurance increases due to the number of catastrophes in 2012.

“It will be interesting to see what effect [Sandy] has on the Jan. 1 reinsurance renewals,” he adds.

Coverage Developments
“BOPs are a fairly stable product,” Sander says. “I think you are going to see coverage experimentation. Companies will continue to play with industry specific bundles and professional services bundles and allow more risks to be served with a BOP.”

BOPs continue to be a product that the agents really like because they have a high degree of automation, enabling agents to handle customer needs quickly, Sander notes.

“That is why the market is trying to serve more risks under BOPs [and] push the automation higher to meet agencies’ business customers’ expectations,” he says.

Keane says Hanover is always looking at emerging classes for BOPs, pointing specifically to the mobile food service industry and independent distributors as two active areas.

“For independent distributors, an example would be a bread manufacturer’s delivery force,” he says. “It used to be that every manufacturer would have its own delivery force. Now a lot of that business is being subcontracted out, and needs to be insured.”

On the Horizon
Gaynor points to technology and the home health care and medical industries as sectors of small business growth, and says agents should expect more product development in those areas.

“And when we talk business owners, one of the emerging issues is fracking,” Gaynor says. “What are the true exposures there? It will be key for the contractors business in the next few years. How can we and other companies successfully capitalize [on this need] and stay within [the] small business framework?”

Katie Butler is IA editor in chief.



New law that prohibits cell phone use for many teen drivers takes effect on November 1

October 15, 2012


A new state law that prohibits drivers with an instruction permit or probationary license—which includes many teenagers–from “using a cellular or other wireless telephone except to report an emergency” while driving takes effect on November 1. A driver violating this restriction on cell phone use is subject to a forfeiture of $20 to $40 for a first offense and $50 to $100 for a subsequent offense within a year.

“We hope that the new law will deter teenagers and other inexperienced drivers from using their cell phone while behind the wheel, which can be a dangerous distraction,” says Wisconsin State Patrol Major Sandra Huxtable, director of the Wisconsin Department of Transportation’s Bureau of Transportation Safety. “In a national study, 43 percent of 16 and 17-year-olds said they have talked on a cell phone while driving, and 40 percent of teens up to age 17 said they have been in a car when the driver used a cell phone in a way that put themselves or others in danger.”

According to Major Huxtable, cell phone use can distract a driver’s attention from traffic and road conditions. “Distracted driving is a problem even for experienced drivers. But it often is even more hazardous for teen drivers who are not experienced,” she says. “Traffic crashes kill more teenagers in Wisconsin and the rest of the nation than any other cause of death. And distracted driving is a factor in many of these crashes.”

The National Highway Traffic Safety Administration reports that 11 percent of all drivers under the age of 20 involved in fatal crashes were distracted at the time of the crash. This age group has the largest proportion of drivers who were distracted.

Although the law will affect many teen drivers, the cell phone restrictions also apply to other drivers with a Wisconsin probationary license, such as:

  • Drivers licensed in other countries.
  • Persons with suspended or revoked instruction permits or probationary licenses.
  • New state residents who have fewer than three years of driving experience.
  • New state residents under the age of 21.
  • New state residents who surrender a license that is expired for more than six months.

Wisconsin law also prohibits texting while driving for all motorists of all ages. To prevent distractions from cell phone use and texting while driving, the State Patrol advises all drivers to:

  • Turn off your phone or switch to a silent mode.
  • Use voice mail to tell callers that you’re driving and will return the call as soon as possible.
  • If you absolutely need to use your cell phone to call or text, pull over to a safe area.
  • Ask a passenger to make a call or text for you.

Cell phone use and texting are just two of many types of distractions that increase a driver’s risk of causing a crash or failing to avoid one, according to Major Huxtable.

“Every time you drive, you are legally and morally responsible for safely operating a potentially destructive—and even deadly—force,” she says. “That’s why driving requires your undivided attention. Any lapse in attention to traffic or road conditions is a grave danger to you, your passengers and everyone else on the road. No attempt to multi-task in your vehicle, no phone call, and no text message is more important than a human life.”

For more information, contact:
State Patrol Major Sandra Huxtable, WisDOT Bureau of Transportation Safety
(608) 266-3048,

Fact Sheet—2011 Wisconsin Act 164:

Effective date: November 1, 2012
Enactment date: March 29, 2012

What is the law? 2011 Wisconsin Act 164 expands the state statute that prohibits inattentive driving by adding a subsection that stipulates: No person who holds a probationary license or an instruction permit  may drive any motor vehicle while using a cellular or other wireless telephone except to report an emergency. Any person violating this law may be required to forfeit not less than $20 nor more than $40 for the first offense and not less than $50 nor more than $100 for the second or subsequent conviction within a year.

As of September 2012, a total of 32 states and the District of Columbia ban all cell phone use by novice drivers, according to the Governors Highway Safety Association.

Who is affected by this law? The prohibition against cell phone use affects drivers with an instruction permit or probationary license—regardless of age. It is not solely a ban on cell phone use by teen drivers.

An instruction permit is often called a learner’s permit or a “temp.” Anyone learning to drive must first obtain an instruction permit. Persons are eligible for an instruction permit at age 15-1/2. After passing a written knowledge test, they use the instruction permit to practice behind the wheel driving skills under the supervision of an adult driver.

A probationary license generally may be issued to persons who are at least 16-years-old and have held an instruction permit for six months. If under age 18, they also need to complete a driver education course, accumulate at least 30 hours of supervised driving experience with an adult sponsor and pass a road skills test. Probationary licenses expire two years from the applicant’s next birthday. For example, drivers who are 16-years-old on the date they obtain a probationary license will be eligible for a regular license on their 19th birthday. In addition to new drivers, probationary licenses are required for the following:

  • Drivers licensed in other countries.
  • Persons with suspended or revoked instruction permits or probationary licenses.
  • New state residents who have fewer than three years of driving experience.
  • New state residents under the age of 21.
  • New state residents who surrender a license that is expired for more than six months.

Where to go for online information?