“AHERN Insurance Brokerage is an industry leader in the world of lawyers professional liability insurance. That’s our niche. We specialize in law firms and can write any line of coverage that they may need. Our agents bring more than 300 years of combined experience working solely with law firms in brokering services, underwriting, risk management and claims,” says Randy T. Gust, President, AHERN Insurance Brokerage.
The boutique brokerage firm is one of the strongest full-service insurance brokerages in the nation specializing in law firms. Founded by William Brian Ahern in 1997, the brokerage firm has grown to a staff of 40 professionals serving clients throughout the United States. AHERN is endorsed by the San Francisco, Los Angeles and San Diego County Bar Associations; is the designated broker for the Orange County Bar Association; and is an Official Member Benefit Provider of the State Bar of Arizona.
In 2015 AHERN became part of Acrisure, LLC, one of the top 10 insurance brokerages in the world and the fastest growing in industry history. Together they now insure more than 8,000 law firms nationwide, with firms ranging in size from one to 1,100 attorneys.
USING A STRONG INDUSTRY REPUTATION TO LEVERAGE THE MARKET
Due to their specialization and strong industry reputation, Gust says that AHERN has direct access to carriers that a lot of other brokers do not. Many brokerage firms have to go through a wholesaler to access markets, which puts the client one step further from the negotiating table.
“They can’t just pick up the phone and talk to the person who is making the decisions. Because of the personal relationships we have built throughout the years, I can pick up the phone and get underwriters, heads of programs and claims handling online with my client that same day. That goes a long way when you’re negotiating renewal terms on behalf of your client. Our personalized service gives us a big leg up as opposed to a brokerage firm that doesn’t specialize in law firms and doesn’t have direct access to grow these relationships,” he says.
As an example of AHERN’s successful approach, Gust cites the case of a Los Angeles law firm that had been insured with an insurance carrier for many years but was paying above market price for their insurance – more than $120,000 in premium per year.
“Their broker was completely asleep at the wheel. We dug in there, did some shopping and got them a much stronger policy for almost $40,000 less. It’s not that their old carrier was a bad carrier. They just weren’t the right carrier for this client. We run into that situation quite often.”
STATE OF THE MARKET AND THE BENEFITS OF BUILDING CARRIER CONTINUITY
Currently the insurance market is seeing a lot of carriers come in and out of California because of the large amount of premium in the market. Gust notes that oftentimes new insurance carriers coming into the market may try to undercut the market and buy the business. For example, if a policy costs $2,000 in Colorado, chances are that the same policy costs $4,000 in California. Carriers believe they can write such a policy for 25 percent less and make huge profits. These new carriers offer policies that are somewhat competitive, but they don’t have a lot of financial strength and claims handling experience backing them up. Many carriers fail and end up having to leave the market, as they didn’t price their product appropriately to keep up with the claims they ultimately end up paying.
When an attorney or law firm jumps from a blue chip carrier with a lot of experience, to a new insurance carrier lacking in experience and/or financial strength, they can find themselves in the unfortunate situation of trying to get the claim settled as cheaply as possible. Conflict inevitably results.
Although pricing is a significant factor in purchasing liability insurance, many law firms make the mistake of approaching insurance coverage as if they were purchasing a price-driven commodity. Gust says there is true value in working with insurance carriers that have been in the lawyers market for a long time. Their underwriters understand the risk and are less likely to leave the market. Overall, lawyers should seek to establish a long-term relationship with an insurance carrier that understands the risk in the legal industry because the carrier will be less likely to non-renew a policy in the event of a claim, due to the established history and relationship with the insurance carrier.
A firm that jumps around to the cheapest alternative every year can’t build continuity or real personal relationships.
“If you have a claim, the carrier is going to non-renew your policy and you’re stuck right out of the gate trying to find a new home in a hard-to-place market, which could be substantially more expensive than if you were to be renewed by your current carrier.”
PERSONALIZED SERVICE FROM A TRUSTED ADVISOR
Gust says that working well over the long term with insurance carriers and lawyers is like starting, building and maintaining any personal relationship. Getting to work closely with the clients and carrier representatives and knowing them as human beings is an essential element of success. “We have frequent meetings with our carriers, we talk about the markets, and we talk about what we need for our clients to grow that that symbiotic relationship. You build and maintain that trust.”
“We advise our firms that the strength and expertise of a carrier is of utmost importance when selecting a professional liability carrier, as essentially they are purchasing catastrophic insurance. They definitely want a strong partner in the event that something goes wrong. We are also proud to have some of the best relationships with many carriers in the marketplace. Because of our reputation and large business volume, underwriters are willing to go out on a limb for us as opposed to a broker they don’t know. Our level of expertise matched with those strong industry partnerships can be extremely beneficial to our clients,” Gust says.