Consumer Specialties Insurance: Assuring Stability for Policyholders in all Kinds of Economic Weather 

The 2009 insurance market remains most challenging.  Yet, in this soft and extremely competitive insurance market, CSPA’s affiliate, the Consumer Specialties Insurance Company (CSI) (Risk Retention Group), has retained the vast majority of its policyholders and has written coverage for several new accounts.  Thus, during an economic downturn that has shown few signs of a turnaround, CSI can report it is in sound financial health – an achievement worth noting in these tough times. 

As with any business, the insurance marketplace is characterized by up or down cycles, also known as “hard” or “soft” markets.  In a hard market, it is difficult for certain accounts to obtain coverage, and premiums rise – as was the case in the aftermath of the Sept. 11, 2001, attacks.  In this current soft market, premiums are competitive, and it is not uncommon to see fledgling companies enter the market and vie for a piece of insurance business for certain industries, with unsatisfactory results.  Such entities flee the market as quickly as they sought entry into it.

By contrast, policyholders of CSI are served by a well-established company that assures their protection from marketplace fluctuations.  Since CSI specializes in providing liability insurance to the consumer specialty industry and chemical distributors, it is generally unaffected by shifts as is the conventional insurance marketplace.  Moreover, CSI has the support of a strong reinsurance company that is assigned a rating of A+ by AM Best and is highly committed to maintaining its relationship with CSI.

New Broadening Endorsement – This year, CSI expanded coverage for its liability policy by introducing a new Broadening Endorsement, which incorporates five important coverage enhancements: vendors as additional insureds written on a blanket basis; blanket waiver of subrogation; product withdrawal expense with a limit of $100,000; employee benefits liability coverage; and limited pollution liability with a limit of $100,000. 

“Knowledge of the chemical specialty industry and insurance industry is crucial to providing a good insurance product,” said Gerri Littleton, vice president, Hanna, Kremer & Tilghman Insurance, Inc., program administrators for CSI.  “We introduced the new Broadening Endorsement in response to contractual demands of policyholders’ customers, and for CSI to maintain its competitive edge.  All existing policyholders have purchased the Broadening Endorsement, which has attracted new business to the CSI program.”

In addition to the new endorsement, the CSI policy can include Non-Owned Automobile Liability, Stop Gap Liability, Additional Insured Status for Specified Relationships and Coverage for Certified Acts of Terrorism.

Enhanced marketing efforts – With many valuable services to offer, CSI has boosted its marketing efforts by advertising in chemical industry publications while continuing to advertise in insurance trade publications. CSI’s magazine advertisement has been revised to showcase the benefits of the CSI program.  Since spring, the new CSI ad has appeared in several issues of American Agent & Broker and Spray Technology, and is scheduled for additional display ads in both publications through the end of the year.

In addition to print advertising, CSI has enhanced its Google presence with web-based advertising and for the first time, in this last quarter of 2009, CSI has sent out an “e-mail blast” to more than 70,000 insurance agents and brokers, presenting the CSI advantage.  The CSI website http://www.csiplus.com/ has been updated and information on CSI can be easily retrieved.

Collateral benefit for CSI insureds – As members of CSPA, CSI companies have access to an important collateral benefit of the program – an opportunity to join Product CareR, CSPA's product stewardship program.  CSI members participating in Product Care receive a 10% discount on their product rates.

An investment of value – Satisfied policyholders and industry experts attest that, no matter what the economic weather, purchasing coverage from CSI is always a sound business decision.  Nonetheless, the current economic climate presents a moment of opportunity for prospective customers of liability insurance to consider investing in CSI.  In a recent letter to policyholders, CSPA and CSI RRG President Chris Cathcart wrote, “CSI is well-positioned to meet your ongoing insurance needs by providing expert insurance advice to make sure you have the right coverage, superior claims handling and strong oversight by a proactive Board of Directors, several who are CSI policyholders.”

Several in the insurance industry offer their perspectives on the value of the CSI program:

From Policyholders

“With minimal experience in the insecticide manufacturing industry, Universal Pest Solutions, LP (UPS) sought out and was referred to CSI for support with risk management.  CSI’s personnel provided the experience and knowledge of the industry that UPS desired in order to secure the necessary insurance coverage for our business.  The personnel are not only very supportive in the area of insurance but also in most aspects of risk management. I have found CSI to be a very valuable resource for our company and a pleasure to work with.  Gerri Littleton and Roxy Barr are very responsive, professional and knowledgeable.”

Jim Mills, Manager of General Partner, Universal Pest Solutions, LP

“As a charter member of CSI, I-K-I has been extremely satisfied with the personal service given to us by the CSI team. Claims handling is a major plus of the program because our service providers know us and our products; we're not just a number. CSI has provided stable insurance through both hard and soft markets, and in liability insurance, stability is good.”

From Insurance Agents

"Coverages provided by the CSI Risk Retention Group are in line with coverages provided by any national carrier.  The major difference is, here we have the expert (CSI) versus the generalist (national carrier).  The insureds have more opportunities to be involved with the Association program and its success than they could ever have with a national carrier.

“And the people I work with make a great difference.  Working with Gerri Littleton and Roxie Barr is a joy.  Their knowledge of the industry has been a great resource to me as a broker.  Gerri's commitment to the program is boundless.  I've learned this first hand having been with her at both the CSPA Annual and Mid-Year meetings.  Jeff Altman is one of the best claims people I have had the privilege to work with.  His input in the handling of claims both in and outside of the retention constantly benefits CSI's clients.”

Bob Picht, Daniel & Henry Agency, agent for PLZ Holdings

“As an agency focused solely on the needs of the chemical industry, Aaxia Chemical Insurance Services values the opportunity to utilize a specialized program such as CSI that is structured around the specific exposures of chemical manufacturers and chemical distributors.  What is unique to CSI is that they have been willing to listen to our ideas and have worked with us at the Board level to allow the policy form to evolve in a way that competitively matches the coverage of much larger insurers, while offering value to even our smallest chemical industry clients.  Most importantly, in difficult claim situations, they have demonstrated a willingness to stand behind our clients and provide an impressive level of claims service and response that is not common to larger insurers.  We look forward to offering the CSI/CSPA partnership to our chemical industry clients for many years into the future.”

Larry Knight, Aaxia Chemical Insurance Services

From Service Providers

“CSI is a policyholder-owned and controlled risk retention group, formed for the sole purpose of providing a stable source of insurance for the consumer specialties industry.  CSI's Board of Directors is composed of people from the industry who understand the insurance needs of CSI's policyholders.  It is a unique and responsive insurance company.”

Kathy Davis, Downs, Rachlin & Martin, PLLC
Director on CSI Board

“CSI is able to provide superior claims handling services because CSPA member companies are insured by CSI and we specialize in handling consumer specialty product claims. We not only care about our insureds’ exposure to liability, but also their important relationships with suppliers and customers who may also be named. We partner with the companies we insure and do everything we can to help achieve the best possible results for each and every claim, from the moment it is first reported until it is finally resolved and closed.”

Jeff Altman, McKenna, Long & Aldridge, LLP