Wortham has developed a team of technical specialists with extensive experience in developing insurance strategies and risk management solutions for companies that develop, generate and sell power and associated services. Our client base includes independent power producers, cogeneration plant operators, marketers, and gas and electric utilities. We understand our clients' goals to provide safe, reliable and efficient operations while optimizing their assets amid various challenges, including environmental, regulatory and compliance issues.

coverage & teams

account executive group

For more than 100 years, Wortham has managed its clients' insurance needs with a comprehensive portfolio of services, including insurance brokerage, risk management and employee benefits consulting. As one of the largest privately held insurance firms in Texas, we serve local, regional and global companies as well as individuals.
We understand our clients' goals to provide safe, reliable and efficient operations while optimizing their assets amid various challenges, including environmental, regulatory and compliance issues.
Unique in the insurance industry, Wortham employees are salaried team members and most are not directly compensated by commission. With this compensation structure, we have created a workplace culture that aligns teamwork and collaboration.

property

Capacity remains abundant in the property market for power generation risks with new arrivals and some existing participants expanding their offered capacity.  The capacity phenomenon has generally contributed to an atmosphere of rate reductions, static deductibles and broad wordings.  However, as accounts continue to receive reductions while at the same time delivering losses to the market, profit margins have tightened.  With Insurers focus almost entirely on underwriting profitability, the tipping point between good account and troubled account has moved lower and accounts who once considered themselves top tier are now finding themselves classified as challenges or opportunities by some Insurers.  Such variable interpretations across the various markets is causing churn in insurer participants, leading many buyers to forsake longstanding relationships in order to meet their budget goals.

construction

Wortham's Property Power Gen Team is cross trained to place Construction Related coverage. Power Gen & Utilities as well as contractors need an insurance broker that understands the nature of their work and challenges. You need an insurance broker with comprehensive experience and extensive technical capabilities to develop solutions that provide the broadest coverage possible.  For over a century, Wortham has worked in tandem with owners and contractors to create strategies that protect their businesses.

terrorism

Terrorism Insurance coverage is placed by the Wortham Property Team and has evolved into 2 different products.  Below is a table outlining the differences:

t&d coverage

Wortham Power Gen Property Specialists have negotiated replacement cost coverage sublimits for T&D lines above ground, underground and underwater.  This includes power as well as fiber optics, and other transmission lines.

primary casualty

Wortham’s Casualty Power Generation Team recognizes the unique risks associated with its power generation clients and has strong relationships with all relevant specialty insurance companies.  The market for primary casualty generally remains stable and competitive however, underwriters in this niche are very specific about which area of the utility/power gen world they are willing to touch (i.e. Wildfire).  Regarding Workers Compensation, there have been some introduction of additional markets in recent years, but the number is still small for risks with linemen exposures.  Fortunately,  Wortham has the experience, skill, and market relationships to overcome these obstacles and produce the best results available.

excess casualty/umbrella

There is no standard form in the umbrella and excess market.  This presents both challenges for the unwary and opportunities for the prepared.  Wortham’s umbrella and excess casualty team draws from experts with an array of backgrounds, including underwriting, risk management, and legal, to ensure our clients are prepared.
Unlike other brokerages, which blend primary casualty with umbrella, our team is dedicated to the umbrella and excess market. This strategy keeps a select group of Wortham brokers in the umbrella and excess marketplace daily, allowing Wortham to keep our clients ahead of the trends.
With over 50 carriers currently in the umbrella and excess market space, capacity remains abundant.  AEGIS continues to dominate this space; however, the entrance of new capacity means carriers competing not just on price, but also on coverage.  The umbrella and excess team has the experience and relationships to tap into, and blend, both domestic and international capacity (both admitted and surplus lines) to ensure our clients have the coverage they need at the best price available.

cyber liability

The cyber insurance market continues to evolve rapidly as capacity increases and policy wordings evolve.  With over 50 carriers offering cyber insurance capacity domestically and abroad, the expansion occurring with cyber insurance coverages and related breach service offerings changes monthly.  Policy forms are becoming slightly more consistent across insurance carriers and the application process has become more streamlined with short form applications available for low risk industries.  For smaller organizations, minimum premiums start at $1,500 with minimal underwriting.  For larger and complex risks who handle large volumes of sensitive data, underwriters are drilling deeper into encryption processes and evaluation of the organization’s efforts to continually improve cyber risk management efforts.
For utilities and energy customers, specialized wordings are available to fit the unique risks presented by these organizations and insurance products offering non-cyber covers (such as resulting bodily injury and property damage) and difference in conditions drop down features are available.  Simultaneously, there is a push for insureds to remove cyber related exclusions on non-cyber policies therefore minimizing gaps in the overall corporate insurance program.  Newer policy features such as reputational harm cover, contingent business interruption, social engineering fraud, and full prior acts cover are being offered for select insureds.  An emphasis on pre-breach training within organizations such as incident response plan development and testing has become a critical component of the underwriting process as well as an overall evaluation of cyber security IT measures taken by organizations.  Certain cyber claim denial challenges have arisen in the courts causing brokers to more carefully scrutinize policy language to ensure outdated language does not exist on this rapidly changing coverage.

environmental liability

There are two basic forms of environmental insurance: Site-specific pollution legal liability (PLL) and contractor’s pollution liability (CPL). The pollution product line was developed to fill the gaps created by broad pollution exclusions contain in the commercial general liability policy.
A PLL policy is a claims-made policy designed to address historical exposures and/or new operational exposures. This policy can be crafted to address a number of additional exposures including transportation pollution, civil fines or penalties (where insurable by law), business interruption, mold, asbestos, silica, natural resources damages, or Superfund liability. Additionally, a special type of policy can combine general liability with pollution. Those policies are reserved for certain class of business, but can greatly enhance the overall pollution coverage. PLL has shifted to increasing premiums with additional coverage restrictions. This is driven by increased frequency and severity of pollution claims. Additionally, the exit of AIG out of this line of business has fueled some instability in the market. Carriers are reviewing their portfolio balance and seeking lower exposure risks.
A CPL policy covers contractors for third-party liability resulting from pollution conditions created or exacerbated by contracting activities performed at a third party location. This policy can be written on a claims-made or occurrence form, and also be written to address a single project or the company’s entire practice. Contractor’s pollution liability continues to see improved rates and coverages. There is new capacity entering the market as this line is typically more profitable than other pollution lines.

public officials / professional indemnity

At present the market for commercial D&O, EPL, Fiduciary, Crime and other professional lines is highly competitive with new entrants continuing to expand capacity.  Premium rates for primary layers have flattened, with some decreases still attainable based on the risk.  Excess layer rates continue to decrease.  Coverage terms for publicly traded companies are expanding whereas those for private and nonprofit organizations are tightening.  In particular, some private/nonprofit company insurers are attempting to narrow the defense provisions (duty-to-defend vs. indemnity), breach of contract exclusions and professional services exclusions.

smart meter patent infringement

Smart Meter Patent Litigation Solutions
Entities coined as “Non-Practicing Entities”  (NPE) have cost operating companies billions of dollars by suing them for patent infringement and forcing settlements. There is growing NPE exposure in the Smart Meter space where more than 20 active NPEs are asserting patents from a range of technologies including the wireless, networking and mobile components used in today’s Smart Meters. Such cases are expensive to resolve at an average of $800k in legal and settlement costs. While historically, energy delivery companies may have been indemnified by suppliers, the landscape is changing with the increasing use of the Internet of Things. As a result, this risk will only increase. Wortham Power Gen solutions include access to an unique patent insurance product and a risk mitigation program designed specifically to manage this growing risk.

bonds/surety

Wortham has assisted the Power Gen/Energy industry with surety bond services for decades.  Our Surety department’s professionals currently provide services to more than 400 customers involving over 20,000 bonded obligations. Individual established surety lines of credit range from $25,000 per client to more than $1.5 billion in bonds for our largest customer.
Our core surety service model includes the following services: Representation of every major surety company as well as many specialty markets; Annual review of Financial Results and Reserve Reports to maintain established bonding lines of credit; Review of statutory bonding requirements; Ability to arrange for bond execution on a same day basis in every major U.S. city; Surepath on-line interactive bond processing service.

employee benefits

The old way of doing things is over – and the new priority is on intelligent, informed decisions that will make your Employee Benefits Plan affordable and effective for your company and its workers. Wortham is the perfect resource to help you manage costs and minimize the administrative headaches of your benefits plans. We work with more than 1,000 companies of every size, and we know how to construct benefit plans that precisely meet your financial goals.
Wortham is driven by a single goal: Results! We will thoroughly research your company and its employee data, and we will work with you to establish a successful game plan. Our talented benefits staff includes a medical director, ERISA attorney, wellness coordinator and a Human Resources Consultant.  We are determined to keep you compliant with the fast-changing rules in healthcare. We are highly respected for our knowledge and experience, and we leverage our strengths to gain the best outcomes from carriers, third-party administrators, wellness partners, and outsourcing/enrollment vendors.  Our client benefit strategy focuses on enhancing employee engagement through effective communications.  More importantly we design a Population Health Management approach that fits your company’s goals and budget.

transit/marine

It is the intent of the Property team to include Transit sublimits, within the property policy, of sufficient quantity to cover most transit evolutions.  However, should a shipment come along that requires a separate Marine/Transit placement, our team includes marine expertise to insure the shipment and any associated delay in startup exposure.  We also utilize the marine market to buy down the property deductible on shipments as required by the contract or business unit.

power outage/loss of income

Power Generation Outage Coverage protects electric power producers from the potential exposure to the market price for electricity following a full or partial outage (derate) of a power plant. This exposure could result in the need for the purchase of replacement power to meet firm sales obligations, or could result in a loss of profits at lower cost of production plants.
Coverage is triggered by 1) a NERC defined outage or derate of the generation of power at the covered plant locations, and 2) a market price in excess of a predetermined strike price. The insured is indemnified for the difference between the market price for electric power and the strike price.
This insurance product can be an effective way to manage the financial exposure to volatile energy prices – the double trigger structure may be less costly than other power purchase options.  The coverage can incept immediately after an outage or derate and thus can also be used as a deductible buy-down for a business interruption waiting period.

Wortham L.L.C. , General Partner

John L. Wortham & Son, L.P.