Running a college is like running a city, with a myriad of potential risks and liabilities. Our PAR insured firm included a group of colleges as a client, which required an incredible breadth of coverage.

During one renewal period, a carrier recommended a significant change to coverage relating to mold. Such additional coverage was a positive addition to the colleges’ overall coverage. However, the policy renewal also included a new exclusion, which the PAR firm said the carrier failed to mention -- underground storage tanks (UST).

This exclusion eventually proved costly when the underground storage tanks leaked, causing pollution. The carrier denied coverage, pointing to the specific, attached exclusion.

Although the carrier claimed they had verbally notified the PAR agency of the UST exclusion, there was no documentation to prove this conversation had indeed occurred. In addition, although the PAR firm had checked the renewal policy itself when it was issued, it did not catch the UST exclusion on its own. Had the PAR firm asked for a specific, written listing of policy modifications, they would have been fully aware of the change during the renewal process rather than being caught off-guard later.

This one leak turned into a major mess that ended up costing over $200,000 -- the bulk of which went for clean up of the leaking tank itself and replacement insurance for any other USTs at the colleges. Legal costs accounted for $17,000 of the total.

Simply stated, don’t rely on your own checking to identify any policy modifications during renewal. Protect yourself and protect your client by asking for a complete, written inventory of any revisions to the original coverage. You may be fine with every one of the changes, but at least you’ll know each change before they have the potential to become an issue.