| The Connecticut Insurance Department (CID) has issued Bulletin PC-93-25, which instructs carriers, pursuant to Public Act No, 25-33, to include a flood insurance policy disclosure notice in homeowners and renters policies. Policies must state that flood losses are not covered by such policies and that flood insurance coverage is available via a separate policy. The statement is required for new and renewal policies effective on or after July 1, 2026. The CID encourages carriers to include the notice on the declarations page but allows the notice to be placed elsewhere in policies, if it is prominent and in a larger type size than surrounding text. Big I Connecticut took a leading role in working with policy makers to strategize on ways to better inform consumers about flood insurance availability. Agents and brokers are encouraged to continue engaging customers about flood insurance. The recent tragic flooding in Texas and the approaching 1-year anniversary of serious flooding in Connecticut serve as a stark reminder that flooding can affect a variety of properties, regardless of proximity to water. |
| Personal insurance carriers' ability to take some rating actions without regulator approval will continue for at least another five years, the Connectictut Insurance Department (CID) announced yesterday. The department made the announcement in response to a law enacted by the state General Assembly and signed by Gov. Ned Lamont last month.
Under a law that was due to expire on June 30, carriers had the ability to raise or lower aggregate personal risk insurance rates by up to 6% and increase rates by up to 15% in individual territories without prior approval. The law limited them to taking these actions once per 12-month period.
The newly enacted law pushes the sunset date for the law to June 30, 2025.
The limits apply to individual insurers within carrier groups.
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| The Connecticut Insurance Department Severe Weather Mitigation & Resiliency Advisory Council issued its final report this week with recommendations to mitigate the impact of more frequent and severe weather on homeowners, small businesses, and renters. The report recommends focusing on hardening properties against severe weather events, addressing the affordability of such measures through tax and insurance credits, grants, and other revenue sources, and educating consumers about available resources and the importance of making improvements to their property to protect against severe weather. The report specifically identifies the insurance industry as a key stakeholder group that can help share core messaging about: - The importance of resiliency
- How to participate in existing resiliency programs
- FORTIFIED roof standards
- Flood and tree management awareness
- Insurance education
- Financial assistance (grants and other funding sources)
The Council also recommends that the State General Assembly broaden eligibility for Catastrophic Savings Accounts (CSAs) where property owners can save money on a pre-tax basis for qualified expenses related to severe weather, such as insurance deductibles, repairs, and mitigation improvements. Big I Connecticut remains committed to working with government officials and other to educate property owners about protecting their property from risk.
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| With Governor Lamont's signature of HB6981, effective October 1, 2025 the diligent effort requirement for placing surplus lines coverage with unaffiliated wholesale surplus lines brokers will no longer be required. Connecticut General Statutes Insurance Section 38a-741 requires that, before acquiring coverage outside of the standard market, both the licensee and the insured shall first make a diligent effort, as defined by the commissioner, to procure, from any authorized insurer or insurers, the full amount of insurance required to protect the interest of such insured. The statute is amended to exclude from the diligent effort requirement “any policy of insurance where the broker seeks to procure or place such insurance through an unaffiliated wholesale surplus lines insurance broker." As previously reported, Big I Connecticut actively urged the General Assembly to pass this important modernization effort. Just one day after Chair of the Board Danielle Brown sent a letter of support to House Speaker Matt Ritter, the bill was raised in the House and passed. Advocates then turned their attention toward the Senate, which passed the bill during the final days of session. We will continue to monitor this development and share any additional guidance that may be provided by the Connecticut Insurance Department. Thank you again to those members who participated in grassroots advocacy to help move this important modernization effort over the finish line.
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 It is always possible that your agency – or one of the third-party service providers (TPSPs) the agency works with – will be victimized by cyber criminals. If that happens and your agency holds a New York license, the
New York financial services cybersecurity regulation requires you to notify the state Department of Financial Services (DFS.) The Conneciticut Insurance Data Security Law does not make a similar requirement for you when one of your carriers suffers a breach. While you're attempting to limit and repair the damage, these are some New York questions that might come up:
What is a “cybersecurity incident"? The regulation
defines that term in two parts. The first is “cybersecurity event," which has a very broad meaning. It is “any act or attempt,
successful or unsuccessful, to gain unauthorized access to, disrupt or misuse an information system or information stored on such information system." Any of these could be a cybersecurity event: - Someone enters the wrong password three times while trying to log into your network and gets locked out.
- Someone sends your office a phishing email.
- Someone outside your agency calls an employee and asks for their network password.
The DFS is not interested in hearing about most of that stuff. They want to hear about “cybersecurity incidents." These are cybersecurity events that: - Have occurred at your work location, at any company related to your agency by ownership, or at a TPSP.
and
- Impact your agency and require you to notify a governmental body such as the state police;
or
- Have a reasonable likelihood of materially harming any material part of your normal operations;
or
- Result in the deployment of ransomware within a material part of your computer systems.
If it affects you, one of your affiliates, or one of your TPSPs, and it either requires you to notify the authorities, will likely substantially harm any crucial parts of your operations, or results in extortionists shutting you down, you must report it to DFS.
When do we have to report the incident? “(A)s promptly as possible but in
no event later than 72 hours after determining that a cybersecurity incident has occurred at the covered entity, its affiliates, or a third-party service provider." The clock starts ticking when your office has
determined that an incident occurred. That could be when your technology people confirm that your systems were hacked, or it could be when a TPSP informs you that it has suffered a breach.
How do we report an incident? The regulation requires the covered entity to make the report electronically on the DFS portal (https://myportal.dfs.ny.gov/). It's the same portal where your agency makes the annual compliance filings and where agencies and individuals submit exemption filings when appropriate.
How do we fill out the report? DFS has provided
instructions on how to complete it.
What happens after we submit the report? If DFS decides to investigate the matter, they may contact your office for additional information. Understand that, if the incident occurred to one of your insurance carriers, any agency significantly impacted by the incident is required to report. That means DFS may receive a large volume of notifications. It is possible that they might not contact every agency that notified them.
What happens if we do not report an incident? The regulation states that any “failure to act to satisfy an obligation" is considered a violation. DFS has authority to penalize violators.
Anything else we should do? Create the strongest cybersecurity program you can reasonably afford to reduce the odds that you will ever have to make this report. Your time is better spent serving your clients than repairing the damage a cyber-attack can cause.
Where can I get more information? Three good sources: |
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Question from a Big I New York member: “Does a grocery or supermarket selling beer need Liquor Legal Liability Coverage? In my mind, and I may be very wrong, a bar serving liquor needs it as they have a responsibility not to serve people who look or sound intoxicated. Can you make a cashier working in a supermarket or grocery assessing customers if they are intoxicated before checking out wine or beer liable for an injury?" Answer: In my opinion, yes, it needs Liquor Liability Coverage. Reasons: - They sell alcoholic beverages. If an injury or property damage occurs as a result of a person's intoxication, the person suffering the injury or damage may sue anyone involved in the chain of sale. For example, customer buys a case of beer at a supermarket, drinks a quarter of it in a couple of hours, and opens fire on a cable guy who has come to service the home. Cable guy sues everyone including the supermarket that sold the beer. This is not hard to imagine actually happening.
- Section I—Coverages — Coverage A Bodily Injury and Property Damage Liability in the ISO Commercial General Liability Coverage Form, CG 00 01 04 13 excludes Liquor Liability Coverage for a named insured who is in the business of selling alcoholic beverages. Specifically, it states the insurance does not apply to BI or PD “for which any insured may be held liable by reason of … contributing to the intoxication of any person …"
- The Insuring Agreement under that coverage states, “We will have the right and duty to defend the insured against any 'suit' seeking those damages. However, we will have no duty to defend the insured against any 'suit' seeking damages for 'bodily injury' or 'property damage' to which this insurance does not apply." The insurer is obligated to defend the insured against the lawsuit only if the insurance applies to that BI or PD, and it does not apply to BI or PD for which an insured may be held liable by reason of contributing to a person's intoxication.
- The Insuring Agreement in the ISO Liquor Liability Coverage Form, CG 00 33 04 13, as amended by Connecticut Changes - Liquor Liability, endorsement CG 28 57 09 01, states:
We will pay those sums that the insured becomes legally obligated to pay as damages because of "injury" to which this insurance applies if liability for such "injury" is imposed on the insured by reason of the selling, serving or furnishing of any alcoholic beverage. We will have the right and duty to defend the insured against any "suit" seeking those damages. However, we will have no duty to defend the insured against any "suit" seeking damages for "injury" to which this insurance does not apply. We may, at our discretion, investigate any "injury" and settle any claim or "suit" that may result. …
If the store carries this policy, the insurer must pay for the store's legal defense even if the lawsuit is stupid. That's the real value of the policy for this type of operation. It may be unlikely that a court would hold them liable, but it's highly likely that an enterprising plaintiff's attorney will name them as a defendant in a lawsuit. This policy makes the difference between whether the insured must foot the bill for the lawyers to defend it or an insurance company does. That's why I think the store needs the coverage – to pay for its potential legal defense, not so much because it may be held legally liable. If the store sells beer, it's vulnerable to potential lawsuits. ISO rules say to refer to the individual insurer for the applicable rates, but I note that there is a separate classification for “Package Stores and other retail establishments selling alcoholic beverages for consumption off premises." I would expect the rates to be lower for this classification than for the others.
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|  Question from a Big I Connecticut member: "I was hoping you could provide clarity for me and a client of ours. They’re a general contractor and will be taking on a project which requires an Owners and Contractors Protective Liability (OCP) policy. How would this impact our General Liability and Workers' Compensation policies which are currently in place ? Would we include the sub costs for the project requiring the OCP as part of our GL sub costs for rating purposes? I suspect the WC payroll should include payroll associated with the OCP project, but it would feel like double dipping from a rating standpoint if we also have to include the sub costs on the GL policy. My carrier underwriter is not able to provide an answer, unfortunately. She just doesn’t know and I’ve been going back/forth for a few months trying to obtain clarity for my client."
Answer: With regard to the Workers' Compensation payroll, the OCP coverage form (ISO form CG 00 09 04 13) has a Workers' Comp exclusion (see SECTION I – COVERAGES BODILY INJURY AND PROPERTY DAMAGE LIABILITY, Exclusion 2.e.). Therefore, the existence of an OCP policy has no effect on the rating basis for the WC policy. Regarding the CGL coverage, I disagree that it is double-dipping to charge for the project cost in determining the premiums for both CGL and OCP policies. It's important to keep in mind that that your client will not be the named insured on the OCP policy. Rather, the project owner is the named insured; your client is the contractor charged with furnishing the policy. The OCP coverage form states: Throughout this policy the words "you" and "your" refer to the Named Insured shown in the Declarations. … SECTION I – COVERAGES BODILY INJURY AND PROPERTY DAMAGE LIABILITY 1. Insuring Agreement a. We will pay those sums that the insured becomes legally obligated to pay as damages because of "bodily injury" or "property damage" to which this insurance applies. We will have the right and duty to defend the insured against any "suit" seeking those damages. However, we will have no duty to defend the insured against any "suit" seeking damages for "bodily injury" or "property damage" to which this insurance does not apply. … b. This insurance applies to "bodily injury" and "property damage" only if: (1) The "bodily injury" or "property damage" is caused by an "occurrence" and arises out of: (a) Operations performed for you by the "contractor" at the location specified in the Declarations; or (b) Your acts or omissions in connection with the general supervision of such operations; (2) The "bodily injury" or "property damage" occurs during the policy period … In this situation, coverage applies to BI and PD only if it is caused by an occurrence and arises out of operations performed for the project owner by your client. Nowhere in the form does it say that the “contractor" (defined as “the contractor designated in the Declarations") is an insured. In this situation, the project owner is an insured and your client is not. The insurer has the “right and duty" to defend the project owner (but not your client) against a lawsuit seeking damages because of covered BI and/or PD. If your client is named as a defendant in the lawsuit, they must seek coverage and defense under the CGL policy. The project owner has coverage under your client's CGL policy only if the policy grants additional insured coverage to the owner. Assuming the owner is not an additional insured, this is how the coverage looks:
Since both the CGL and OCP policies will conceivably provide coverage, the insurer is justified in using the same premium basis for both.
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| The Connecticut General Assembly 2025 legislative session ended just before midnight on June 4 after passing the state's two-year spending plan. Big I Connecticut was highly visible throughout the session, engaging on several issues important to independent agents, consumers, and the insurance marketplace. The most substantial victories centered on flood insurance and excess and surplus lines modernization. In late January, Big I CT Board Vice-Chair Jason Guerrera and AVP of Government Relations Travis Wattie participated in a General Assembly Flood Insurance Forum. During the event, they cautioned lawmakers against a proposal from Governor Lamont requiring that agents obtain signed declinations of flood insurance offers from customers. A strong grassroots advocacy showing by Big I CT members and multiple rounds of conversations with legislative leaders, Insurance Commissioner Andrew Mais, and top Lamont aides, led to a compromise striking the burdensome language and replacing it with a statement on homeowner and tenant insurance policies that flood is not a covered peril. In the excess and surplus lines space, Big I Connecticut was a vocal supporter of legislation to remove, in most instances, the requirement to secure and document three declinations from admitted carriers before placing excess and surplus lines policies. Members participated in a Call to Action via the new VoterVoice tool to urge support from their lawmakers and made compelling arguments to Insurance & Real Estate Committee Co-Chair Kerry Wood during the Big I CT Morning at the Capitol. In both cases, the bills passed the House and Senate and are expected to be signed by the Governor. Other victories included stopping legislation that would ban the use of noncompete agreements and prohibit the use of dog breed in underwriting. The team also engaged on legislation to address a Connecticut Supreme Court decision that would have resulted in large workers' comp rate increases. Also noteworthy is the approval of an additional $100 million to the Connecticut Foundations Solutions Indemnity Fund Co. (CFSIC) to support repair of crumbling foundations. It has been reported that there are an estimated 3,500 to 3,700 affected homes, significantly less than initial estimates of more than 25,000. Although the scheduled session has adjourned, the need for continued legislative engagement and grassroots relationship building continues. The second half of the year affords an opportunity to build rapport with lawmakers and help them become better informed about the insurance marketplace. Thank you to those members who made their voices heard on key legislative topics. Your advocacy played a key role in securing important legislative victories. |
|  One question that comes in from time to time is whether a liability insurance policy (either personal, commercial general, or auto) must cover the loss in value of damaged property in addition to the cost of repairs. This comes up a lot with high-end cars, such as the Ferraris, Corvettes, and Maseratis of the world. The car gets hit by an at-fault driver. The car's owner sees the resale value of the car plummeting and wants the other driver to pay for that. So, does the at-fault driver (and therefore the driver's insurance company) have to cover that loss of value? No. The courts in New York and Connecticut have arrived at similar answers to this question, and they won't make sports car owners happy. The New York State Court of Appeals (the state's highest court) addressed the issue in 2002 in Fisher v. Qualico Contracting Corp.: “As recognized in our case law, however, replacement cost and diminution in market value are simply two sides of the same coin. Each is a proper way to measure lost property value, the lower of the two figures affording full compensation to the owner." Similarly, the Connecticut Supreme Court ruled held in a 1951 decision, Whitman Hotel Corporation v. Elliott & Watrous Engineering Co.: “The ultimate measure of damages in a case such as this is the diminution in the value of the plaintiff's property caused by the defendant's tort. It is, however, well established that such diminution in value may be determined by the cost of repairing the damage, provided, of course, that that cost does not exceed the former value of the property and provided also that the repairs do not enhance the value of the property over what it was before it was damaged." Therefore, in both states the owner of the damaged property is entitled to the cost of repair or the reduction in the property's value, whichever is less. This is obviously not good news for owners of damaged luxury cars, but the courts have been clear. Don't expect liability insurers to pay for diminished value.
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| Big I Connecticut's grassroots advocacy and government relations efforts have secured a practical and agent-friendly approach to raising flood insurance awareness with consumers. Members of Big I CT successfully opposed a proposal that would have required applicants to provide written acknowledgment on a flood insurance disclosure and declination form. After several rounds of negotiation with Governor Ned Lamont's office, Insurance Commissioner Andrew Mais, and senior officials at the Connecticut Insurance Department (CID), a more practical solution was reached. The revised language replaces the written acknowledgment mandate with a requirement for insurers to notify policyholders that: - their policy does not cover losses caused by flood,
- flood insurance is available through separate policies, and
- information is available on where and how to obtain flood insurance.
This common-sense compromise mirrors current practices already in use by many carriers and provides agents with a helpful resource for educating clients on homeowners and renters policy coverages. At the request of Governor Lamont, the State Senate amended SB 9 to remove the original written acknowledgment provision and incorporate the revised language. The bill has since passed both chambers and awaits action by the Governor. Big I Connecticut extends its thanks to members who acted by emailing their legislators through the Grassroots Action Center and participated in meetings with lawmakers and the CID. We are also grateful to Governor Lamont, Commissioner Mais, and their teams for engaging in open dialogue and working collaboratively to promote flood insurance awareness without adding unnecessary burdens on consumers and agents. |
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