Understanding Warranty Risk: How Warranties Work – Part 1

Commercial auto, workers' compensation, and general liability insurance receive the lion's share of attention from the captive marketplace. This focus is understandable. Commercial auto and workers' compensation insurance are not only legally mandated but often contractually required. Liability insurance (CGL) indemnifies the insured against the most ubiquitous cause of action – negligence, making it a must-have insurance coverage. The top-down premium calculation method, which does not adequately reward better-in-class risks, adds to the focus. The additional input into the claims process and the ability to receive dividends for superior loss performance round out the reasons for the market's focus on primary, three-line coverages.