Watch for exposures in integration

Over the past 2 years, there has been a dramatic increase in the availability of integrated risk solutions for companies wanting to insure a variety of exposures in one product. Notwithstanding the dramatic expansion in capacity, many companies purchase additional excess coverage for at least some lines covered by the integrated risk program. This combination of integrated risk and monoline coverage has the potential to create mischief when the policyholder presents a claim involving sufficient dollars as to warrant a strategic response by the monoline insurer or insurers. It behooves the insurance community to think through some of the issues today, at the point of underwriting, rather than to face the otherwise inevitable battles in court at the point of claim. Those issues include: 1. problems with underlying exhaustion, 2. non-contemporaneous exhaustion, and 3. mismatched triggers. Three approaches to managing the risks concerning exhaustion are highlighted.