What is Lloyd’s of London?

Lloyd’s of London is an organization that has provided insurance worldwide for more than 300 years. The organization has a reputation for handling either very expensive or exotic types of insurance. Surprisingly, Lloyd’s is neither an insurance company nor, for most of its history, a corporation. It is made up of more than 3,000 active members. There are well over 10,000 inactive members. Memberships consist of the underwriters, the insurance brokers who bring them business, and the investors known as “names.” The underwriters accept insurance business on behalf of syndicates (groups of “names”).

The history of Lloyd’s begins at Edward Lloyd’s coffeehouse in 1688, where he attracted a clientele of merchants, particularly ship owners with vessels and cargoes needing protection. Mr. Lloyd’s establishment quickly evolved into a meeting place where businessmen sought brokers to place insurance with wealthy, reputable men. Character and integrity were important because the persons (called underwriters) who agreed to invest in the ships and cargoes put their personal fortunes at risk in order to pay their share of any claim. If a ship’s voyage was successful, the underwriter would share in the profits.

Note: The term underwriter came from the practice of persons agreeing to insure a ship and/or its cargo by placing his signature under the name of the vessel he was willing to sponsor.

Lloyd’s of London has long been identified with British history and the growth of worldwide commerce. It is an international insurance market, located in London, whose members cooperate with each other, compete with each other and, of course, compete against other insurance organizations. There are four major markets at Lloyd’s: Marine, Non-Marine, Aviation and Motor. Lloyd’s also has a smaller market that handles short and long term life insurance.

Insurance is not placed with the Corporation of Lloyd’s, a society incorporated under Act of Parliament of 1871. The Corporation provides the premises, shipping information services, administrative staff and other facilities that enable the Lloyd’s market to transact insurance business. The actual insurance transactions are handled by thousands of Lloyd’s members. About one-third of the membership is actively engaged in the market. The remaining members provide capital, but do not actively place business in any of Lloyd’s insurance markets. Only the underwriting members may accept insurance business on behalf of a syndicate.

Historically, a policyholder with a valid claim could be certain that the claim would be paid, whatever the cost to the member who accepted the risk. Formerly, every underwriting member was responsible up to the full extent of his personal assets for his share business. If his personal assets were not enough, Lloyd’s would make any deficit out of its reserve funds.

Today, Lloyd’s liability is more conventional, limited in the same manner as traditional insurance companies. The change was necessary due to its long-term problem in handling losses associated with asbestos claims. Lloyd’s created a separate entity to handle that large source of loss and many organization members became inactive (no longer writing new business) in order to meet their payment obligations.

While the number of active memberships have substantially decreased; they are made up of, primarily, corporate entities, so Lloyd’s capacity to write business in the global marketplace is still substantial and makes it likely that Lloyd’s will continue to be an important part of the insurance market.

Work Comp Insurance Guide

“Help Me Understand Workers’ Compensation Insurance Enough to Feel Good About What I Buy!”

That’s the number one request small business owners make when asked what carriers and agents can do to make workers’ compensation insurance buying more understandable. We took their request to heart and developed an interactive website to explain workers’ compensation in plain English.

In addition to demystifying this often confusing line of business, our e-learning site helps small business owners develop a checklist detailing specific work comp questions to discuss with their insurance counselor – you.

.WORK COMP INSURANCE GUIDE

Don’t Assume Your Jewels Are Covered!

Most homeowner policies provide very limited coverage for jewelry. The reason for this is that jewelry is high-valued (especially in relation to its size), is easily lost or destroyed and is vulnerable to theft (as well as fraud). If you only own a modest amount of jewelry (say just a few hundred dollars), perhaps the limited coverage provided by a basic policy is adequate. However, when high values are involved, consider buying special insurance coverage. A few options are available such as buying supplemental insurance that is attached to your homeowners or tenant’s policy or purchasing a separate jewelry policy.

Discussing what is needed and expected from separate coverage is very important. Does the coverage consider jewelry values that increase over time? Does it cover mysterious disappearance (when you know the property is gone, but can’t pinpoint when and how the property was lost) and other causes of loss, or just fire and theft? Discussing the coverage also helps you understand the steps you must take to make sure that you keep the maximum coverage in force and whether the coverage you receive is worth the additional price.

Documenting The Jewelry’s Value

If the jewelry has just been purchased, a store receipt or certificate should establish the insured value. However, as time passes or circumstances change, the insured value must be reevaluated, perhaps by seeking an appraisal (expert opinion). Getting an appraisal that affirms your jewelry’s current value is an excellent way to assure that your property is properly protected. Of course, make sure that you work with a competent appraiser (check their credentials and number of years of experience). It is also helpful to talk to a potential appraiser. Does she seem to have the necessary expertise? How willing and able is she to explain her work? There are several professional jewelry and appraisal associations that can give you information on appraisers and appraising methods. All of these items are important, especially since you have to pay a fee for an appraiser’s services.

Handle With Care

Once you’re certain about the value of your jewelry and the adequacy of its insurance coverage, you need to properly handle your jewelry. After all, who wants to actually file a claim? If you own a significant amount of expensive jewelry you may want to look into other precautions such as:

• Get new appraisals every two or three years, sending a copy to your insurer
• Take photos of your jewelry from several angles; again, share copies with your agent or insurance company
• Consider a quality in-home security system, including a hidden vault or storage area
• Take care on where and when your jewelry is worn to try to avoid becoming a theft target
• Keep original receipts and all appraisals, especially if they demonstrate that the jewelry’s value is appreciating
• Ask your jeweler whether they have access to “Gemprint,” or a similar jewelry identification system that documents a jewel’s distinctive markings much in the manner of fingerprinting.
• Consider storing jewelry that is rarely worn in a bank or saving institution’s vault. (Note that such special storage often qualifies for an insurance premium discount)

Again, your first step is to talk to an insurance professional since he or she shares your concern that you have the protection you need at a price you can afford.