Document Sample
Heffernan_WrapUp_April09 Powered By Docstoc
					  IT’S A
     Heffernan’s dedicated wrap-up
       units support agents with
           contractor clients

By Elisabeth Boone, CPCU                   assemble this puzzle on their own,         thanks to suites of insurance and risk
                                           many agents simply pass on the             management services offered by
                                           opportunity to quote potentially           third-party entities, a growing

                                           lucrative business and by default let      number of less than giant projects are
             you think of insurance as a   it go to the national brokers.             enjoying the benefits of wrap-up
             puzzle, then arranging            Since the 1970s, large construction    programs. For agencies and
             coverage for a construction   projects have been using a                 brokerages that specialize in
             project is the ultimate       mechanism known as a wrap-up, in           construction business, offering wrap-
1,000-piece jigsaw, requiring              which all of the coverages required by     up services can be an effective way to
excruciating attention to detail to        an owner or a contractor and its           broaden their reach in the market
ensure that each tiny piece goes in        subcontractors are coordinated and         while boosting the bottom line.
exactly the right place.                   managed in a single insurance
    Even a modest construction             program. The chief advantages of this
project is a complex undertaking,          approach are that it minimizes the
                                                                                      A natural choice
given the need to address the              possibility of coverage gaps and              As a firm with a strong foothold in
exposures of the owner, the general        overlaps, often reduces insurance          the construction insurance industry,
contractor, and a variety of               costs, and gives the owner or              establishing wrap-up service
subcontractors including excavation        contractor control of its insurance        capabilities was a natural for the
and grading, heating and cooling,          program. Owner-Controlled Insurance        Heffernan Group of San Francisco,
plumbing, electrical, carpentry,           Programs (OCIPs) and Contractor-           which is the parent of Heffernan
roofing, and paving.                        Controlled Insurance Programs              Insurance Brokers.
    For many independent agencies,         (CCIPs) are wrap-up techniques that           The ninth largest independently
an owner or general contractor on a        are used to structure comprehensive        owned insurance brokerage in the
large project is a highly desirable        insurance and risk management              United States, Heffernan for many
client. For agencies that don’t            solutions for contractors in both the      years has specialized in meeting the
specialize in this niche, however,         public and private sectors.                insurance and risk management
identifying risks and coordinating             Although wrap-ups aren’t               needs of construction contractors and
coverage for an owner or general           appropriate for all projects, their use    subcontractors of all kinds. Chosen
contractor’s many exposures is a           is no longer restricted to only the very   as the Rough Notes Agency of the
daunting prospect. Rather than try to      largest construction firms. Today,          Year for 2003, Heffernan was
profiled as the Marketing Agency of           who bring decades of experience to            managers who were using self-
the Month in the April 2003 issue of          the new venture. Managing staff               insurance for their workers
Rough Notes.                                  members are Brian Billhartz, Larry            compensation or benefits programs
   In 2003, Heffernan launched                Jackson, Sarah Vallette, Cindie               carried this concept to the job site.
TREK Insurance Solutions as a full-           Allscheid, and Leah Skelton.                  For the last eight to 10 years there’s
service entity to design, implement,                                                        been increasing use of general
and administer general liability-only                                                       liability-only wraps and project-
wrap-up programs, primarily in the
                                              Wrap concept expands                          specific wraps for apartment and
Western United States. TREK is                    Brian Billhartz, whose background         condominium construction.”
managed by Senior Vice President              encompasses more than 20 years of                 As noted earlier, putting together
Sarah Vallette, who has run the               insurance experience, talks about the         a wrap-up program is a complex
operation since its inception.                origin of the wrap-up concept.                exercise that requires experience,
   In 2008, Heffernan significantly                “Originally, wraps were used for          discipline, and focus—and it’s an
expanded its capabilities to include          large public projects. The concept was        endeavor where agents and brokers
administration for wrap-ups with              based on self-insurance and higher            can benefit greatly from the
workers compensation exposures by             deductibles to give the owner more            assistance of a team that understands
forming Wrap Up Insurance Solutions           control,” he explains. “The concept           the intricacies of the process.
as a division of TREK Insurance               moved to the private side as owners               Wrap Up Insurance Solutions’
Solutions. Based in St. Louis, the new        and general contractors saw the               target business niche is the
unit is staffed by a team of experts          benefits of the approach. Risk                 development of partnerships with

Heffernan Group’s TREK Insurance Solutions created a new division based in St. Louis—Wrap Up Insurance Solutions—to handle
administration for wrap-ups with workers comp exposures. The St. Louis unit is staffed by (from left): Senior Vice President Brian
Billhartz, Senior Vice President Larry Jackson, and Senior Account Executive Cindie Allscheid.

Reprinted from the April 2009 issue of Rough Notes magazine
                                                                                                              progressing through project
                                                                                                              communication, insurance credit
                                                                                                              calculation and processing, payroll
                                                                                                              collection and reporting, and loss
                                                                                                              control and claims management
                                                                                                              services. Wrap-up management
                                                                                                              reports are provided to the
                                                                                                              construction team on a mutually
                                                                                                              agreed schedule.
                                                                                                                  “On projects of over $100 million,
                                                                                                              we recommend hiring an on-site
                                                                                                              safety engineer,” Larry Jackson says.
                                                                                                              “The owner can obtain premium
                                                                                                              credits from the carrier.” To promote
                                                                                                              safety on the site, he says, “We
                                                                                                              develop a relationship among the
                                                                                                              carrier, the general contractor, and
                                                                                                              the subs to make sure that safety
                                                                                                              rules are followed.”
                                                                                                                  Throughout the process, Jackson
                                                                                                              says, “We focus on using best
                                                                                                              practices: ease of enrollment, ease of
                                                                                                              reporting, implementation of safety
                                                                                                              rules, giving the contractor insurance
                                                                                                              information on a timely basis. Our
                                                                                                              goal is to develop a partnership
                                                                                                              among the three main entities: the
                                                                                                              owner or contractor, the
                                                                                                              subcontractors, and the carrier.”

                                                                                                              The devil is in the details
                                                                                                                  Administering a wrap-up program
                                                                               Photograph by Brad Shirakawa

                                                                                                              for a construction contractor and its
                                                                                                              various subcontractors is a complex
                                                                                                              undertaking that requires scrupulous
                                                                                                              attention to detail. Wrap Up
                                                                                                              Insurance Solutions uses a
                                                                                                              proprietary software system called
                                                                                                              TREK Administration with a Web-
                                                                                                              based platform that allows the
                                                                                                              administration team to monitor the
Heffernan Group launched TREK Insurance Solutions specifically for general liability-                         day-to-day workflow requirements of
only wrap-up programs, primarily in the Western United States. Here, the San                                  each wrap-up program.
Francisco-based TREK team—(from left) Senior Vice President Sarah Vallette, Account                               Once a wrap program has been
Executive Marjorie Levy, and Senior Account Executive Leah Skelton—visits Chelsea                             implemented, Vallette says, “We
Park, an administration client in San Francisco.                                                              remove as much of the administrative
                                                                                                              burden as possible from the
                                                                                                              contractors or project sponsors.”
                                                                                                                  Wrap Up Insurance Solutions
agencies, brokerages, and consultants        end by gathering information so we                               senior account executives Cindie
to assist in the placement,                  can explore the feasibility of a wrap                            Allscheid and Leah Skelton are
implementation, and/or                       for a particular risk, by developing                             responsible for wrap program
administration of OCIPs or CCIPs for         contract language, and then by                                   administration. They use the TREK
their clients.                               helping the agent present a proposal                             Administration system to meet the
    “Some agents may have a one-off          to the client and market the program                             specific project’s needs, coordinate
project,” Billhartz says. “Some              to carriers. For most clients, we also                           information technology, implement
regional brokers want to offer a wrap        serve as the administrator once the                              service guidelines, and ensure
capability but prefer not to establish       wrap program is in place.”                                       compliance with workers
their own wrap unit. We can provide              Wrap-up administration comprises                             compensation filings.
assistance in either of these                a sequence of tasks, beginning with                                  “We’re proud of our work on the
situations. We can help on the front         contractor enrollment and                                        administrative side,” Allscheid says.
Brian Billhartz (left) and Larry Jackson (center) consult with a Wrap Up Insurance Solutions client.

“On a day-to-day basis, this is where         the western part of the country,”              Partners, not rivals
we add the most value. Our approach           she explains. “As we started to
is contractor friendly. We collect payroll    expand into other parts of the                     Although Wrap Up Insurance
data from subcontractors on the job           country, we definitely saw a need              Solutions is wholly owned by
site; payroll determines the premium          to add to our capabilities.                    Heffernan, the unit in no way
costs for the wrap-up carrier. The                “Teaming up with the St. Louis             competes with its partner agents for
carriers and subcontractors are happy         group is really working well because           their owners’ or contractors’
because our system is easy to use from        it gives us more access to                     insurance business.
an audit standpoint,” she comments.           independent agents throughout the                  “We understand the sensitivity of
“In the past, communications with             country and allows us to play off each         the agent or broker’s relationship
contractors and subcontractors have           other’s expertise,” she says.                  with the client,” Billhartz says. “Our
been poor on some wrap-ups, and they              “Our background was strongly               true competitors are national
received paperwork with no                    driven by the residential market in            brokers; there’s no conflict of interest
explanation of coverages. Now we hear         the western U.S.,” Vallette explains,          with Heffernan.
compliments from subcontractors like,         “so there were a lot of general                    “For a wrap to succeed,” he says,
‘This is the smoothest wrap I’ve ever         liability-only projects, whereas               “everyone has to win: the insurance
been in,’” he says with pride.                countrywide there are also projects            company, the contractor, and the
                                              that include workers compensation.”            subcontractors. If one of those parties
                                              With the addition of the St. Louis             isn’t happy, it isn’t going to work.”I
Teamwork pays off                             group and their experience working
   Senior Vice President Sarah                with agents on wrap-ups for private
Vallette expresses enthusiasm about           commercial and residential as well as             For more information:
the addition of the St. Louis team to         public projects, the team can now                 Wrap Up Insurance Solutions
Heffernan’s wrap capabilities. “We            arrange workers compensation wrap-                Web site:
had a small team in San Francisco,            ups in all states that do not have a      
and our focus was essentially on              monopolistic system.

Shared By: